Scholarly article on topic 'A New Engineering Design Paradigm – The Quadruple Bottom Line'

A New Engineering Design Paradigm – The Quadruple Bottom Line Academic research paper on "Agriculture, forestry, and fisheries"

CC BY-NC-ND
0
0
Share paper
Academic journal
Procedia CIRP
OECD Field of science
Keywords
{Customization / Personalization / Variety / Design / Innovation / "socio-technical sustainability."}

Abstract of research paper on Agriculture, forestry, and fisheries, author of scientific article — Waguih ElMaraghy, Hoda ElMaraghy

Abstract The number of product variants has increased dramatically in recent years. The increase in variety has a multitude of reasons including customers’ demand for new product functions and features, different regional requirements, and large number of market segments having different needs. The emergence of new materials and technologies make new and different product features possible, and the fierce competition among manufacturers and retailers to distinguish their products, attract more buyers and secure larger markets are important drivers of increased variety. Mass customization (MC) means producing goods and services to meet individual customer's needs with near mass production efficiency without compromising cost, quality or delivery. It aims at achieving economy of scope at a cost approaching that of economy of scale by delaying products differentiation and capitalizing on commonality and similarity between variants within a product family. Personalization means that products are made-to-measure or to customers’ personal specifications. However, to achieve some measures of economy, only few product components are allowed to be manufactured to fit the customer specifications. This paper discusses the evolution of product design for mass customization and personalization as well as product variety and complexity management in the context of engineering design and the changing design paradigms. The main objective of customization and personalization is to be competitive in the market and to maintain a good market share. This significant innovation has been based primarily on achieving the traditional objectives of the best quality product, produced for a competitive cost just in time to meet the market needs in a timely manner. Beyond customization and personalization for companies to sustain in the future, they must also meet the continuous innovation requirements while producing environmentally friendly products and the socio-technical objectives, hence meeting a quadruple bottom line.

Academic research paper on topic "A New Engineering Design Paradigm – The Quadruple Bottom Line"

Available online at www.sciencedirect.com

ScienceDirect

Procedia CIRP 21 (2014) 18 - 26

24th CIRP Design Conference

A New Engineering Design Paradigm - The Quadruple Bottom Line

Waguih ElMaraghya, Hoda ElMaraghya

a Professor, Faculty of Engineering, the University of Windsor, 401 Sunset Avenue, Windsor, Ontario Canada N9B3P4 * Corresponding author. Tel.: +15192533000; fax: +15196427100. E-mail address: wem@uwindsor.ca

Abstract

The number of product variants has increased dramatically in recent years. The increase in variety has a multitude of reasons including customers' demand for new product functions and features, different regional requirements, and large number of market segment s having different needs. The emergence of new materials and technologies make new and different product features possible, and the fierce competition among manufacturers and retailers to distinguish their products, attract more buyers and secure larger markets are important drivers of increased variety. Mass customization (MC) means producing goods and services to meet individual customer's needs with near mass production efficiency without compromising cost, quality or delivery. It aims at achieving economy of scope at a cost approaching that of economy of scale by delaying products differentiation and capitalizing on commonality and similarity between variants within a product family. Personalization means that products are made-to-measure or to customers' personal specifications. However, to achieve some measures of economy, only few product components are allowed to be manufactured to fit the customer specifications.

This paper discusses the evolution of product design for mass customization and personalization as well as product variety and complexity management in the context of engineering design and the changing design paradigms.

The main objective of customization and personalization is to be competitive in the market and to maintain a good market share. This significant innovation has been based primarily on achieving the traditional objectives of the best quality product, produced for a competitive cost just in time to meet the market needs in a timely manner. Beyond customization and personalization for companies to sustain in the future, they must also meet the continuous innovation requirements while producing environmentally friendly products and the socio-technical objectives, hence meeting a quadruple bottom line.

© 2014 ElsevierB.V. Thisisan openaccess article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/).

Selectionandpeer-review under responsibilityof the International Scientific Committee of "24th CIRP Design Conference" in the person of the Conference Chairs Giovanni Moroni and Tullio Tolio

Keywords: Customization; Personalization; Variety; Design; Innovation; socio-technical sustainability.

1. Introduction

1.1. Design Engineering

Design engineering is an enabler of innovation to satisfy human needs. It is the activity that creates the concepts and designs, and develops the new and improved products, processes and technologies that are needed by people, in industry and in other sectors of the economy. Design Engineering integrates creativity, mathematics, basic sciences, engineering sciences and complementary studies in developing elements, systems and processes to meet specific needs. It is a creative, iterative and often open-ended process

subject to constraints which may be governed by standards or legislation to varying degrees depending upon the discipline. These constraints may relate to economic, health, safety, environmental, social or other pertinent factors.

Design is the transformation or mapping process from the functional domain to the physical domain which satisfies the stated functional requirements within identified constraints, as illustrated in Fig. 1. Methodologies and technologies that can help achieve a robust design and eliminate the "Cut-and-try" approach, have significant competitive advantages.

2212-8271 © 2014 Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.Org/licenses/by-nc-nd/3.0/).

Selection and peer-review under responsibility of the International Scientific Committee of "24th CIRP Design Conference" in the person of the Conference Chairs Giovanni Moroni and Tullio Tolio doi: 10.1016/j .procir.2014.06.145

Fig. 1. Engineering design as mapping from functional to physical domains

1.2. Design Tools, Methods, Methodologies and Paradigms

The words method and methodology may sound similar, but there is a big difference between them. The relationship between method and methodology is like the relationship between the words psyche and psychology. Psyche basically means the internal mind, and psychology is the discipline that studies and supports the internal mind (i.e. the research of academics in the faculty of psychology, and the counselling of psychologists). A design Method is a model that employs a series of steps to prescribe the development process. A design Tool is an instrument that enables performing a certain process within the overall development process.

The methodology is the discipline, or body of knowledge, that utilizes these methods, and it is the study of a method or methods. The way in which design methods are used in the context of the organization, the project, the product, all stakeholders, and all other aspects that influence the development cycle.

The field of Design Theory and Methodology (DTM) is a rich collection of findings and understandings resulting from studies on how we design (rather than what we design). In other words, DTM is about design processes and activities, rather than about products It was started with the first American Society of Mechanical Engineering (ASME) first International Conference on Design Theory and Methodology [1]

Paradigms are the theoretical mindsets, or collections of beliefs that underlie our approach, as well as a matrix of methodologies and the specific methods used. The concept of design paradigm derives from the word paradigm used earlier in social science.

While the meaning of design paradigm is used within the design and engineering community to refer to exemplary design solutions that create design trends, the second meaning refers to what a group of people expects from a type of design solutions, or as an approach to design problem solving. Problem solving occurs, with specific objectives and methodologies, now called "functional requirements and engineering design methodologies", through a process of abstraction and characterization of design solutions, with subsequent categorization into problem solving types, and an open ended iterative process involving both synthesis and analysis. Several engineering design paradigms have been presented in the last thirty years, and some are illustrated in Fig. 2.

"In the mid 1980s, I was one of an eclectic group of academics who began looking at design as a formal area of research. Some approached it as an effort to understand and

Fig. 2. Waves of engineering design methods, methodologies, and design paradigms

codify the process of design, others focused on the theory of design, while yet others were interested in grammars, graphics, and philosophy. At the time, "design" was on the back burner at most universities with mechanical engineering classes focused on the analysis of machine components such as nuts, bolts, gears, bearings, and engines. There was very little research on "design" itself. Rather, those interested in the topic focused their research on components, materials, or formal methods like optimization or kinematics". "Later in 1987, the Europeans, seeing a growing US design interest, sponsored their semi-annual conference, ICED (International Conference on Engineering Design) in Boston. This was the fourth ICED. The first was in Italy in 1981 and the other two also in Europe. This outreach by the international community further fueled interest in engineering design methods" [2]. In 1989 a self-appointed group approached the IDETC officers with a proposal that led to the first DTM (Design Theory and Methodology) conference in 1989. It proved rather easy to put on this first conference, as there was strong unanimity on the goals and focus. The first international ASME (Association of Mechanical Engineers) was born [1]. DTM has since maintained flexibility, with many topics of interdisciplinary nature as is evidenced by the mix of papers on methods, education, theory, process, decision making, human behavior, product development, computation, representation, and collaboration.

2. Mass customization

After a 100 years of Mass Production - where one product size fits all - the 21st century marketing is moving to Mass Customization - letting you custom-design everything you buy, from cars, to clothes, to shoes - to your own breakfast cereal. In this chapter, we explore how companies profit from personalized products, how they market those products, how consumers are drawn to companies that offer customization, and how brands use customization to fight competitors.

2.1. Defining mass customization

The concept of mass customization is attributed to Stan Davis in Future Perfect and was defined by Tseng and Jiao [3] as "producing goods and services to meet individual customer's needs with near mass production efficiency". Kaplanand and Haenlein [4] concurred, calling it "a strategy that creates value by some form of company-customer interaction at the fabrication and assembly stage of the operations level to create customized products with production cost and monetary price similar to those of mass-produced products". Similarly, McCarthy [5] highlight that mass customization involves balancing operational drivers by defining it as "the capability to manufacture a relatively high volume of product options for a relatively large market (or collection of niche markets) that demands customization, without tradeoffs in cost, delivery and quality".

Theoretically it is a "Business strategy for profitably providing customers anything they want, in any want, at anytime, anywhere". More realistically mass customization may be defined as: "The use of flexible hard, soft and organizational processes, to produce customized products and services as efficiently and effectively as mass produced ones

The difference between the old and the mass customization paradigms is illustrated in Fig. 3.

Old Paradigm

Mass-Customization Paradigm

• V • •••

Fig. 3. The mass customization paradigm [6].

The seeds of mass customization were planted at the beginning of mass production. As the ability to mass-produce a product started with companies like Oldsmobile and Ford in the early 1900's, it forever changed how big a company could grow and prosper. Suddenly, thousands of identical products could be built at a low cost, and shipped to all corners of the country via railroads, and later overseas via ships.

While Henry Ford didn't invent mass production, he certainly improved on it. For example, early assembly lines were static, with workers moving along it, performing a number of tasks. Ford saw an efficiency opportunity, and decided to make the assembly line move, with workers remaining static. That way, an employee could perform just one function many times a day, resulting in more consistent workmanship.

Keeping the design simple, the parts interchangeable, and by manufacturing a succession of identical products, auto manufacturers like Ford could sell cars for only hundreds of dollars and still make enormous profits. Mr. Henry Ford

eliminated the product variety and complexity, and one of his most quoted lines, saying: "A customer can have a car painted any colour he wants, so long as it's black."

As the 20th century unfolded, mass production was embraced by virtually every major manufacturer. Clothing, food, tools, toys, furniture, kitchen products - nearly every purchasable item distributed nationally came off an assembly line. But mass production eventually ignited the opposite desire - and consumers were soon willing to pay for special options that made their purchase unique or enhanced.

So, in 1919, Ford began offering electric starters as a $75 upgrade, which eliminated the need for hand-cranking. Removable rims and balloon tires were offered as options in

1925. Going against Henry Ford's edict of every car being black, you could now buy Model Ts in several colours by

2.2. Customization in the 13th century

Back in the 13th century, the concept of war was evolving, with a medieval arms race. As weapons improved, the armour designed to protect knights was forced to improve as well. While there was armour long before the 13th century, the penetrating ability of the longbow had changed the rules. Expert marksmen could shoot up to 18 arrows per minute, and thousands of archers in a line could dispose of an entire regiment efficiently and quickly. Especially when those arrows were shot within a short range - piercing plate armour - making men and horses extremely vulnerable.

Once inside the armour, knights experienced a form of sensory deprivation. Vision was impaired, breathing was constricted, hearing was muffled. Worst of all, movement was severely impeded. In other words, a knight not only fought his enemy, he fought his own armour, as well.

So in the mid 1400's, England, while engaged in an historic war with France, hired 2,000 Italian craftsmen equipped in the latest armour technology. What those Italian craftsmen did was game-changing: They created custom-made suits of armour. Measuring each knight's body down to the last millimetre, the metal protection was designed to fit and move to each individual's body type. It didn't come cheap,

Fig. 4. The longbow changed warfare - and armour - for all time, and full plate armour for man and horse, 1500's (Sources: http://www.cbc.ca/undertheinfluence/season-3/2014/03/01/have-it-your-way-how-mass-customization-is-changing-marketing-1 /; http://en.wikipedia.org/wiki/Plate_armour )

Custom-made armour could cost up to one-quarter of a knight's annual income. But custom-made armour gave armies an enormous advantage.

The world of marketing is also a battlefield. Territory, ground and market share are fought for everyday in every category imaginable. And while the advancements in mass production accelerated the climb of most major brands, there is a new and almost inverse trend emerging: Mass Customization.

2.3. A typical case for mass customization creation

Lutron is a technology-centered and people-driven company, that was created in the late 1950's near Pennsylvania, USA, by a young physicist, Joel Spira, fascinated by the aesthetic manipulation of light. He set out to invent a solid-state device that would enable people to vary the intensity of the lights in their homes. The very idea was radical, but gained attention and market share in due time, and upon further innovations and improvements.

Most people would never think of having dimmers in their homes because they were just too difficult to install. That all changed in 1959, when Spira emerged from his lab with a solid-state dimmer that could replace the light switch in a standard residential wallbox. Spira's key technical innovation had been to replace the rheostat with a thyristor. A thyristor is a type of transistor, which had been invented a few years earlier. The substitution was effective because rheostats and thyristors worked in completely different ways. Rheostats dimmed lights by absorbing electrical energy into the rheostat, meaning that electricity was converted to heat in the rheostat rather than to light in the lamp. By comparison, thyristors dimmed the light by interrupting the power flowing to the lamp, therefore generated much less heat than a rheostat and used much less energy.

Lutton designed and produced lighting controls for residential and commercial applications. In the mid 1960's a large competitor entered the market for mass producing similar products at a lower cost. Faced with this threat, Lutron executives, worked with their customers, particularly interior designers and architects, to see how they can remain competitive and provide what their customers wanted, as a competitive price. They discovered something amazing, that their customers wanted more variety then just a single toggle light switch in off-white colour. The interior designers and architects wanted electrical switches and faceplates customized in a wide variety of shapes, sizes, materials and colours. In response to the customer's demand, Lutron developed a mass-customization system, using modular design, collaborative engineering, and flexible manufacturing processes, to economically produce the variety required by the customer, and became the number 1 producer for the lighting control market.

By 1961, when Joel and Ruth Spira incorporated Lutron Electronics, they knew that lighting control could contribute to society in multiple ways. Dimmers were both elegant and useful, and they allowed people to control their lights as never

before. Dimmers were practical too. They saved energy, and the more you used them, the more energy they saved. With energy costs already going up, the Spiras believed that the energy-saving aspects of the new invention would ensure the long-term appeal of lighting controls.

In almost 50 years of innovation, Lutron has invented hundreds of lighting control devices and systems, and expanded their product offering from 2 products to 15,000, under various categories. The RA2 RadioRA 2 is a wireless total home control system. This energy-saving system gives you the ability to adjust the amount of daylight and electric light (using light controls and automated shades) as well as temperature in a single room or throughout your whole home. The system also turns off standby power to small appliances when they're not in use, therefore truly enabling the wireless control of the smart house (Fig. 5).

Fig. 5. One of the light controls from the product portfolios offered by Lutron

Innovations also include the first electronic dimming ballast for fluorescent lights and the first self-contained preset lighting control system. Lutron was also the first to successfully mass-market the dimmer, the first to successfully market systems of linked dimmers, and is still the only company to create systems of dimmers and motorized window shades that control both electric light and daylight. Lutron has also led innovations in window shade technology for the control of daylight, as well as wired and wireless systems, to integrate the control of both daylight and electric light. The company has advanced the technology of lighting control while maintaining top market position by focusing on exceptional quality and design. Lutron continues to lead the market in high-quality lighting controls for fluorescent, halogen incandescent, magnetic low-voltage, electronic low-voltage and LED light sources.

Lutron holds over 2,700 worldwide patents. In addition, over the years, Lutron's business has grown dramatically, both domestically and internationally. Another facet that keeps Lutron successful is the company's commitment to its customers. Since the beginning, the company has maintained exceptional service, offering 24-hour technical support for its products, and a friendly customer service department that sustains close relationships with then clients. Lutron's success is a result of the strong principles and philosophies, by the founder who developed five principles, which guide its growth. These are:

1. Take care of the customer

2. Take care of the company

3. The customer is our number 1 priority and the reason we exists as a company

4. Take care of the people

5. Lutron is dedicated to growth and innovative development.

6. Innovate with high quality products

7. Deliver value to the customer

Lutron continues to innovate and the "Designing for daylight autonomy" is one, which means designing a space so that it maximizes the amount of useful daylight, thereby minimizing the need for supplemental electric light. To quote Louis Kahn - American architect, design critic, and Yale professor of architecture - who believed that light was an architectural element on par with every other element of a structure. Designing for daylight autonomy reintroduces daylight into the mainstream of modern design, and echoes Kahn's definitive statement, "A room is not a room without natural light". Lutron is a winner in the 2014 "Mark of Excellence Awards" presented by the CEA's (Consumer Electronics Association) TechHome Division. The awards recognize the best in custom integration and installed technology. Each year, manufacturers, distributors, and systems integrators enter to compete for this coveted honor.

2.4. The four approaches to mass customization

There are four approaches to Mass Customization as was first described by Gilmore and Pine [7] which revolutionized the understanding of customization in an MC system.

1. Collaborative Customization

This approach means that the customer is involved in deciding the exact features and specifications of the desired product.

2. Adaptive Customization

Adaptive customizers offer one standard, but customizable, product that is designed so that users can alter it themselves.

3. Cosmetic Customization

Cosmetic Customizers present a standard product differently to different consumers

4. Transparent Customization

Transparent customizers provide individual customers with unique goods and services without letting them know explicitly that those products and services have been customized for them.

2.5. The three pillars of mass customization

According to Piller [8], to achieve a working mass customization environment there are three pillars or basic elements that need to be present: First, the differentiation level, where a considerable number of customized products and services can be generated to satisfy the unique demands of the customer. Second, is the cost level, where the processes and product components need to be partially standardized to capture economies of scale. Third, the co-creation level where customer is integrated into the design of his/her unique

demand. Within those three elements lies the solution space in which an mass customization environment can be established (Fig. 6).

The three pillars of mass customization are discussed in more details in the next chapter.

A basic assumption for the creation of any assortment with variety is the definition of a solution space, which is a statement of all the possible permutations of design parameters that are offered to prospective customers (Pine and Davis [9]). This space determines what universe of benefits the manufacturer is willing to offer to its customers. It is represented by the product architecture and family, as introduced before in Section 3 of this paper. For a traditional Engineer-To-Order strategy, such space has blurred borders and manufacturability of admitted solutions is not certain. In the case of mass customization, the solution space is precisely delimited and delivery conditions can be associated to any option without any uncertainty relative to price, quality levels and manufacturability.

Setting an appropriate solution space is a major challenge as it directly affects the customers' perception of the utility of the customized product and determines the efficiency of downstream processes in the fulfillment system (Tsend and Piller [10]). To set its solution space, a supplier must, first of all, identify the idiosyncratic needs of its customers, specifically the product attributes along which customer needs diverge the most. This is in stark contrast to a mass producer which must focus on serving universal needs, ideally shared by all the target customers. Once that information is known and understood, the business can define its solution space, clearly delineating what it will /will not offer.

Differentiation Level

Fig. 6. The three pillars of mass customization [8] 3. Product variety management 3.1. The origins of product variety and consequences

Products are designed and manufactured to fulfil perceived needs. However, such needs vary because of differences among users, usage scenarios, constraints, social values and others. In order to address these differences, variety of products is created to meet diversified requirements.

Variety is not always good, and more product variants may not serve customers well. In fact, experimental evidence (Huffman and Kahn [11]) shows that when asking consumers to choose among items in a wide assortment, customers are often confused about the differentiation among the product

variants. In reality, offering more product variants incurs expenses from product design to production, inventory, selling and service. Thus, defining the right range of variants with the product features combination that precisely targets the needs and resonates with customers' demands becomes an important issue in variety management.

Product variety can offer the potential to expand markets, increase sales volume and revenues. However, this positive outcome is not always guaranteed unless variety is well-managed in all stages of design, planning, manufacturing and distribution, usage, dismantling and recycling. In addition, research showed that increasing variety may not lead to increased demand or sales. This paradox of variety, its drivers and causes, its effects and consequences and methods of managing it merit much attention and study to reap its full benefit.

3.2. Variety enablers and management strategies

Variety management strategies, techniques tools and enablers are classified according to three main activities related to products and their variants; namely design, planning and manufacturing. Their granularity ranges from parts to products and extends to the enterprise and market. Variant management considers the product, process and market views. It includes all measures by which the range of product variants offered by an enterprise is controlled and the resulting effects throughout their life cycle are managed. One of the important objectives is the reduction and management of variety induced complexity and its associated cost. Within a company, the causes of variant multiplicity may be external or internal. The external causes result from factors such as market, competition, and technology upon which the company has little influence. Internal causes can be ascribed mainly to organizational and technical deficiencies leading to an unnecessary number of variants at the product and parts levels. Simultaneous and concurrent engineering is an important method to holistically consider all aspects related to increased variety from design to end of product life. The recent "Engineering as Collaborative Negotiation" (ECN) design paradigm [12] would be of particular value if it were adopted for effective management of product variety. Collaborative engineering is the application of collaboration sciences to the engineering domain to accomplish complex technical tasks, which is a challenge currently faced by the engineering community including industry particularly in dealing with variety.

3.3. Product platforms and product modules

Product platforms and product modules, incorporated into product family architectures, are established to facilitate planning for product variants [13]. A Product Family Architecture represents the whole structure of the functional elements and their mapping into the different modules, and specifies their interfaces. It also embodies the configuration mechanism to define the rules of product variant derivation

[14]. Unified product architecture lends itself to mass production strategies while a modular architecture is more suitable for mass customization using flexible manufacturing systems. Advances in information and communication technologies allow customers to select from list(s) of preplanned and predesigned product features and options using an online product configurator.

More details on the enablers for design for variety, are discussed by ElMaraghy et al. [15].

3.4. Family leverage and re-design

Companies strive to satisfy customers desired products variety effectively and economically by adopting platform thinking to identify and explore commonalities among their products, target market segments and production processes for more efficient resources utilization in offering variety [16, 17]. However, the traditional platform concept may not be able to adapt to future products design [18], hence, it has to be frequently modified and revamped [19].

Fujita [20] classified product variety optimization problems into: 1) Optimizing product modules' attributes with fixed module combinations, 2) Optimizing product modules' combination for pre- defined module candidates, and 3) Simultaneously optimizing both module attributes and modules combinations. Fujita [21] illustrated two types of cost which are sensitive to variety and the platform optimization process. When commonality increases, the production volume related cost increases due to over-specification, while cost related to number of variants and modules decreases due to unification of suppliers and manufacturing systems.

Product platforms should be designed to sustain their technological and architectural stability for relatively long time. Changing common modules frequently increases capital investments, reduces production volume and ultimately platforms become ineffective.

Platform stability is essential for the platform to implement mass customization, but if the stability period is long it will lag behind in innovation [19].

More details on the enablers for design for variety are discussed by ElMaraghy et al. [15].

3.5. An economic model of variety-driven value creation

Ultimately, variety-based offering results from a firm's demand to offer superior customer value. In case of competition among vendors of comparable offerings, customers will buy from the firm that they believe offers the highest net value [22]. To determine this net value (NV), customers compare the gross utility (GU) they receive from it to its associated acquisition costs (AC), and search and evaluation costs (SEC): NV = GU - (AC+SEC) [15].

Acquisitions costs (AC) include the quoted price for a product, less any discounts allowed, plus shipping charges. Customers' main motivation to search for products is to find a

lower price or a product that better fits their needs, but this activity naturally incurs a search and evaluation cost [23]. Search and evaluation costs (SEC) include any monetary costs of acquiring the information, the opportunity cost of the time devoted to searching, and the cognitive costs determined by the customers' ability to undertake the search, depending on their prior knowledge, education and training.

Given that customers are rational decision makers who seek to maximize their gross utility (GU), customers only purchase a product if they can expect a positive surplus. Hence, if the perceived benefits from an assortment with high variety exceed the expected sacrifices of selecting and acquiring a product from this assortment, customers are more likely to prefer this vendor. Variety can increase perceived benefits: customers expect to receive a product with larger fit to their individual requirements, i.e. to reduce the compromise between their "ideal point" of product characteristics compared to a standard, mass produced good [24]. But selecting from a high-variety assortment also may increase their sacrifices in terms of a price premium demanded by the supplier, time and effort spent, and uncertainty.

Applying the previously outlined logic, a high-variety strategy potentially creates additional value by increasing the gross utility (AGU) to the customer but also raises both acquisition costs (AAC) and search and evaluation costs (ASEC) (Fig. 7a).

Consequently, controlling and handling complexity in product development processes has turned into an important issue, as process diversity increases with the quantity of product variants and process steps become ever more intensely interconnected [25].

As shown in Fig. 8, companies organizational structures, market, process and product complexity are interrelated. Market demands, product diversity and flexible business processes require new concepts and strategies in organizational design to meet increasing interdependencies between people acting in the development process. Product adaptations, as they are required by product individualization or mass customization, affect all aspects of product generation and require appropriate complexity management.

Fig. 8. Interrelated complexity [25]

Managing and controlling complexity in product development requires the understanding of the types and sources of complexity and developing appropriate metrics and methodologies for sustainable competitiveness. These include the introduction and application of innovative and scientific systematic engineering design methodologies as well as new collaborative engineering methods, e.g.: using ''Inven-tive Problem Solving - TRIZ'', design for manufacturing, and ''Engineering Collaborative Negotiation - ECN - paradigm'' [12] within the general systematic design approaches. The types of decisions making in ECN is particularly applicable to design for customization and personalization (Fig. 9).

Fig. 7. a) Effect on net value generated for customers by offering high variety, and b) Effect of strategic capabilities of variety-driven business models [15].

4. Collaborative design and complexity management

It is well known that companies that have a substantial edge in product development bring new products to market more quickly, consume fewer resources, and deliver higher quality designs, and therefore give much better returns to their shareholders and the economy at large. Today and into the foreseeable future, companies that can successfully manage the product development and manufacturing of complex engineering products will have a definite competitive edge.

Fig. 9. "ECN" paradigm and participative decision making in collaborative design.

Deloitte completed one of the largest global manufacturing benchmarking initiatives, entitled ''Mastering Complexity in Global Manufacturing'', it shows that what most companies and industry analysts fail to realize is that ''big and complex'' can prove to be more profitable than ''small and simple''. The report states that a small number of global manufacturers that are known as ''Complexity Masters'' have managed complexity and have reaped the benefits of healthy profits and greater market share as well as good returns on capital investments.

5. The quadruple bottom line

The main objective of customization and personalization was to be competitive in the market and to maintain a good market share. This significant innovation has been based primarily on achieving the traditional objectives of the best quality product, produced for a competitive cost just in time to meet in real time. Beyond customization and personalization for companies to sustain in the future, they must also meet the continuous innovation requirements while producing environmentally friendly products and the socio-technical objectives. The fiercely competitive market can be represented by a continuous need to innovate as represented by the disruptive innovation helix, illustrated in Fig. 10. This continuous need to innovate is essential for companies to sustain. This and the socio-technical objectives, results in the is the next design paradigm that has a quadruple bottom line, which is illustrated in Fig. 11.

Variety and Choice

Customisation

Cost Leadership Diversification

Fig. 10. The socio-technical complex design environment [26].

6. Conclusion

The main objective of customization and personalization is to be competitive in the market and to maintain a good market share. This significant innovation has been based primarily on achieving the traditional objectives of the best quality product, produced for a competitive cost just in time to meet the market needs in a timely manner. Beyond customization and personalization for companies to sustain in the future, they must also meet the continuous innovation requirements while producing environmentally friendly products and the socio-technical objectives, hence meeting a quadruple bottom line. This is the next "System of Systems" design paradigm.

Fig. 11. A new engineering design paradigm - "System of Systems" - The

quadruple bottom line.

References

[1] ElMaraghy W, Seering W, Ullman D. Design Theory and Methodology. In: Proceedings of the 1st International Conference on Design Theory and Methodology. Montreal, Quebec, Canada, 1989; .

[2] Ullman DG. 25 Years of Design Theory and Methodology. J Mech Des, 2013; 135(8):080301, doi: 10.1115/1.4024846.

[3] Tseng MM, Jiao J. Mass Customization. In: Handbook of Industrial Engineering, Technology, and Operation Management. 3rd ed. John Wiley & Sons, Inc.; 2007. chapter 25, p. 684-709; doi: 10.1002/9780470172339.ch25.

[4] Kaplan AM, Haenlein M. Toward a Parsimonious Definition of Traditional and Electronic Mass Customization. J Prod Innovat Manag, 2006; 23(2):168-182, doi: 10.1111/j.1540-5885.2006.00190.x.

[5] McCarthy IP. Special issue editorial: the what, why and how of mass customization. Prod Plann Contr, 2004; 15(4):347-351, doi: 10.1080/0953728042000238854.

[6] Hart W. Creating Competitive Advantage through Mass Customization. 2006, http://www.spiregroup.biz/pdfs/06-04-07CreatingCompetitiveAdvantagethroughMassCustomization.pdf, accessed 29 March 2014.

[7] Gilmore J, Pine B. The four faces of mass customization. Harv Bus Rev, 1997; 75(1 ):91 —101.

[8] Piller F. Mass Customization Success factors and challenges to co-create value with your customers. In: International Conference of Mass Customization, 2006.

[9] Pine B, Davis S. Mass Customization: The New Frontier in Business Competition. Boston, MA: Harvard Business School Press; 1999.

[10] Tseng M, Piller F, editors. The Customer Centric Enterprise: Advances in Mass Cusomization and Personalizaton. New York, NY: SpringerVerlag; 2003.

[11] Huffman C, Kahn BE. Variety for sale: Mass customization or mass confusion? J Retailing, 1998; 74(4):491—513.

[12] Lu SY, Elmaraghy W, Schuh G, Wilhelm R. A Scientific Foundation of Collaborative Engineering. CIRP Ann - Manuf Technol, 2007; 56(2):605—634.

[13] AlGeddawy T, ElMaraghy H. Product Variety Management in Design and Manufacturing: Challenges and Strategies. In: ElMaraghy HA, editor, Enabling Manufacturing Competitiveness and Economic Sustainability. Springer Berlin Heidelberg; 2012. p. 518—523 doi: 10.1007/978-3-642-23860-4_85.

[14] Tseng MM, Jiao J, Merchant ME, Design for Mass Customization. CIRP Ann - Manuf Technol, 1996; 45(1):153—156.

[15] ElMaraghy H, Schuh G, ElMaraghy W, Piller F, Schonsleben P, Tseng M, Bernard A. Product variety management. CIRP Ann - Manuf Technol, 2013; 62(2):629—652.

[16] Ramdas K. Using parts sharing to manage product variety: A study in the automobile industry. Master's thesis, University of Pennsylvania, United States; 1995.

[17] Ye X. Product family design and evaluation based on the commonality/variety tradeoff. Ph.D. thesis, Michigan Technological University; 2007.

[18] Halman JIM, Hofer AP, Van Vuuren W. Platform-Driven Development of Product Families: Linking Theory with Practice. J Prod Innovat Manag, 2003; 20(2):149-162, doi: 10.1111/1540-5885.2002007.

[19] Zhang H, Zhao W, Zhang J, Li G, Tan R. An Approach on Optimization, Upgrade, Renewal of Product Platform. In: Proceedings of the 2006 IEEE International Conference on Management of Innovation and Technology, Piscataway, NJ, USA, vol. 2, 2006; p. 1108-1112, doi: 10.1109/ICMIT.2006.262395.

[20] Fujita K, Yoshida H. Product Variety Optimization Simultaneously Designing Module Combination and Module Attributes. Concurrent Eng, 2004; 12(2):105-118, doi: 10.1177/1063293X04044758.

[21] Fujita K. Product variety optimization under modular architecture. Comput Aided Des, 2002; 34(12):953-965.

[22] Day GS, Wensley R. Assessing advantage: a framework for diagnosing competitive superiority. J Marketing, 1988; 52(2):1-20.

[23] Anderson SP, Renault R. Pricing, Product Diversity, and Search Costs: A Bertrand-Chamberlin-Diamond Model. Rand J Econ, 1999; 30(4):719-735.

[24] Franke N, Piller F. Value Creation by Toolkits for User Innovation and Design: The Case of the Watch Market. J Prod Innovat Manag, 2004; 21(6):401-415, doi: 10.1111/j.0737-6782.2004.00094.x.

[25] ElMaraghy W, ElMaraghy H, Tomiyama T, Monostori L. Complexity in engineering design and manufacturing. CIRP Ann - Manuf Technol, 2012; 61(2):793-814.

[26] Holweg M. The Evolution of Competition in the Automotive Industry. In: Parry G, Graves A, editors, Build To Order. London, UK: Springer; 2008. p. 13-34; doi: 10.1007/978-1-84800-225-8_2.