Experiment with platform thinking

Researchers from the Transforming Construction Network Plus invite project professionals to step up and explore the world of product platforms.

What are platforms all about? Today, we live in a platform economy. Every day we use increasingly ubiquitous digital platforms, such as Amazon, Facebook, Google and Uber, to meet our very specific needs for searching, entertainment and travel. But platforms don’t have to be digital. Firms providing physical products can also use product platforms to balance variety of offer with productive efficiency by creating product families, or by enabling mass customisable products to meet customers’ specific needs.

With product platforms, products are designed around a core, such as the chassis for a car, to which a variety of peripheral components can be added. Usually, the common core remains relatively unchanged and is produced in large volumes, so that firms can benefit from production efficiencies. The peripheral components can then be switched around to provide customer or client choice and variety.

The key thing that makes product platforms so powerful, however, is the interface between the core and the peripheral components: this stays the same. This means that both the core and peripherals can be changed and developed independently, enabling innovation to happen independently in the core and peripheral assets.

Many manufacturing firms are already using product platforms to create value for customers. For example, Tesla has developed a platform approach to its battery production by introducing Powerwall. This is a product family line of batteries that means that the core asset of the battery used in Tesla’s cars can also be used for energy storage in homes and businesses. Here, the peripheral has changed from a car to a building.

We can think of product platforms as supporting a design configuration that enables a known set of components to be configured in multiple ways to develop a wide set of designs from a pre‑existing set of products. At the Transforming Construction Network Plus, which brings together experts from a range of disciplines to tackle the most pressing problems across digital, energy, construction and manufacturing, we’ve been exploring how project‑based firms in construction have been adopting ideas around product platforms, and how they are using product platforms to deliver buildings.

What platforms mean for project‑based firms

It is well known that project‑based firms, such as engineering consultancies, and construction firms deliver highly customised products and services to clients through projects. Focusing on the construction sector, we noted that, traditionally, every time, a design team starts with a blank sheet of paper and designs the building to be delivered. Supply chains and technical solutions are developed to deliver this unique project, with detailed design often deferred until the site supplier is appointed. The use of product platforms changes some of the unique characteristics of bespoke project‑based delivery by encouraging the re‑use of core aspects of building solutions.

Examples that kept cropping up in our research highlighted the time that could be saved by having a standard (parametric and detailed) design for an escape stair or toilet layout, or a standard specification for wall types, and a pre‑approved supply chain ready to compete to meet these requirements. The interface challenge is already solved for a large proportion of the project, and there’s a clearly defined process for creating the building. To meet the client’s demand for variety, these core elements and specifications can be supplemented, with the work of integrating a limited number of unique components being value‑add. In doing so, construction firms, and more generally project‑based firms, can benefit from economies of both scale and scope.

Our research has found that early and detailed pre‑definition of core solutions means that firms can procure components directly from well‑established third‑party manufacturers, rather than an extended supply chain. Project‑based firms can also use their platforms to develop stronger relationships with supply chains, supporting and guiding innovation in the core assets and, as required, the peripheral components.

To fully benefit from product platforms, project‑based firms should identify, create and re‑use a set of core digital assets (designs, specifications) within and across projects. Not only will this make their design workflows more efficient, but these core digital assets can also be linked to other firms’ digital workflows, enabling the efficient transfer of information between project participants. The use of a digital library also means that there can be an efficient recombination of digital components, and the physical components that they represent.

How to take advantage of platforms?

While the use of product platforms leads to greater delivery efficiency and product differentiation, it can introduce challenges for project managers. First, the use and recombination of the design aspects of product platforms challenges project managers to shift attention to portfolios and programmes of projects, rather than individual projects in using a product platform strategy. In turn, this leads towards a re‑orientation of the production system to deliver flow and reduce waste.

The second challenge is related to procurement and the competition between product platforms. Construction firms, for example, investing in their own product platforms with coordinated core and peripheral components will be keen to sell their version of the building, but often projects are procured by stages. This shift in the supply of buildings means that clients can now procure buildings differently, choosing between platforms. Given the enhanced certainty over time and cost that platform‑based delivery provides, project managers also need to be ready to adapt their advice and procurement approaches to incorporate platform‑based solutions as an option to deliver best overall value for their project.

In our Transforming Construction Network Plus project, we have seen construction firms that are already successfully addressing some of these issues, delivering building projects quickly and cost‑effectively. We have also seen the traditional role of the project manager being redefined to one of manufacturing and assembly management, ensuring the efficient and effective delivery of the final product.

While we don’t know how platforms will transform project‑based industries, as product platforms become digitally enabled, there are signs that they are becoming more widespread and our research finds many project managers experimenting with new strategies to gain value in the platform world.

What are platforms?

The word ‘platform’ has been applied at a variety of scales, including products, product systems, industry supply chains, markets, industries and even across groups consisting of multiple industries. Irrespective of scale and context, platforms share some common features:

A set of low-variety core assets (ie components, processes, knowledge, people and relationships). The core assets are replicated multiple times, enabling platform owners and participants to gain a competitive advantage by enhancing production or delivery efficiency.
A complementary set of peripheral components that exhibit high variety. The use of interchangeable peripheral components results in a diversity that creates distinctive offerings to the market.
A stable interface that acts as a bridge between the stable core and variable peripherals, permitting innovation in both core and peripherals. Thinking about organisations, their structure, products, parts and processes as platforms permits a new perspective on each as platform, peripheral or interface. This enables organisations to act as a platform owner, generating opportunities to create and capture additional value.

Approaches to designing a platform

A top‑down approach

A top‑down approach is quite common. Here, platforms are conceived and designed from scratch before implementation. Yet, in practice, organisations already have an existing and complex product portfolio, organisational structure and route(s) to market(s).

Top‑down may only work for newly formed organisations or operating units, oriented entirely to work via a platform model.

A bottom‑up approach

In a bottom‑up approach, existing structures are analysed with a view to understanding what is – or might be – common or core to the organisation’s structure or offer, what needs to be varied (in order to deliver on the market’s expectations of variety) and how the interfaces operate.

Bottom‑up platform development may only work for existing organisations that are willing to change, perhaps radically, to adopt a platform model.

For more information, check out:

Luigi Mosca and Alexander Zhou are at the Centre for Systems Engineering and Innovation, Imperial College London. Kell Jones and Jacqueline Glass are at the Bartlett School of Sustainable Construction, UCL. Jennifer Whyte is at the John Grill Institute for Project Leadership and School of Project Management, University of Sydney. Andrew Davies is at the Science Policy Research Unit, University of Sussex Business School.

Experiment with platform thinking