NDLI: Costing commonality: Investigating the impact of platform divergence

Content Provider	IEEE Xplore Digital Library
Author	Cameron, B.G. Crawley, E.F.
Copyright Year	2012
Description	Author affiliation: Department of Aeronautics and Astronautics, Massachusetts Institute of Technology, 77 Massachusetts Ave., Cambridge, MA, USA (Cameron, B.G.; Crawley, E.F.)
Abstract	Commonality strategies have become an important means of cost-sharing across systems, particularly in long lifecycle aerospace applications such as the Joint Strike Fighter. However, decreases in realized commonality (divergence) have important implications for the cost-sharing effects of commonality. We review the results of a recent study at the Massachusetts Institute of Technology (MIT) of 16 firms and 8 Government organization, which was chartered to evaluate the costing of commonality benefits. We conclude that the size of commonality investments has been underestimated — our data reveal the cost of developing common systems is 12%–50% above the unique design cost. We find evidence to suggest that divergence has cost consequences, notability creating higher quality expenses and requiring additional manufacturing coordination. We examine in detail the potential use of development cost allocation as a management practice for incentivizing commonality. We show that lead variants bearing platform costs achieved weaker investment returns and re-captured few benefits from later variants. We propose a framework for evaluating the consequences of each cost allocation, which explicitly captures the impact of individual variant decisions on the platform's cost structure, building on existing work used in decision-making in the Joint Strike Fighter program. We conclude with management guidance gathered from the case studies for reinforcing commonality incentives.
Starting Page	1
Ending Page	9
File Size	681992
Page Count	9
File Format	PDF
ISBN	9781457705564
ISSN	1095323X
e-ISBN	9781457705571
DOI	10.1109/AERO.2012.6187414
Language	English
Publisher	Institute of Electrical and Electronics Engineers, Inc. (IEEE)
Publisher Date	2012-03-03
Publisher Place	USA
Access Restriction	Subscribed
Rights Holder	Institute of Electrical and Electronics Engineers, Inc. (IEEE)
Subject Keyword	Lead Resource management Investments Profitability Vehicles Organizations Rails
Content Type	Text
Resource Type	Article
Subject	Aerospace Engineering Space and Planetary Science

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1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
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4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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