Product platform alignment in industrialised house building

ABSTRACT

Vertical integration of supply chains has enabled industrialised house-building companies to develop and use product platforms. Constant changes in the external business environment, such as customer needs, legal requirements and demand fluctuations, continually compel companies to strategically align their product platforms with market position and offering accordingly. Achieving alignment is often hindered by a lack of understanding of the interplay between the external business environment, product platform, offering and market position. The knowledge on product platform alignment in this industry exists in the literature; however, a coherent description of product platform alignment is missing. The aim of this research was, therefore, to expand the knowledge on the strategic aspects of product platforms by describing product platform alignment in industrialised house building. Empirical data were collected in two Swedish companies producing timber-frame single-family houses. The developed model provides a coherent description of product platform alignment via five alignment modes that group interplays between product platform, business model and the external business environment, whereas identified challenges additionally enrich the description. Formalisation of the product platform knowledge and the changeability of manufacturing systems are identified as two main enablers of achieving product platform alignment.

KEYWORDS:

• Prefabrication
• industrialised construction
• off-site
• building information modelling
• design for manufacturing

Introduction

As a subgroup of the architectural, engineering and construction industry, industrialised house building, hereafter referred to as IHB, is used to label the product-oriented strategic approach that the main Swedish producers of timber frame single-family houses have adopted as an alternative to the traditional project-oriented methods and principles (Lessing et al. 2015). Changes in the business environment in the 1960s have caused the companies in many countries to embark on industrialisation and start mass-producing housing. The need for product differentiation has increased and IHB companies had to adapt to this change (Barlow 1999, Thuesen et al. 2013). As with mass production, inspiration for the development was derived from the manufacturing industry (Gann 1996). Manufacturing companies faced a similar set of challenges in the late 1980s. As a response, mass customisation (MC) emerged, i.e. a strategy to meet various customer needs and requirements through configurable and customisable offerings, manufactured with near mass production efficiency (Pine 1993). Developing and using product platforms has proven to be an effective means of achieving MC by the manufacturing companies (Fogliatto et al. 2012, Pirmoradi et al. 2014, Zhang 2015).

Robertson and Ulrich (1998) define product platforms as a collection of four types of assets, namely, components, processes, knowledge and people/relationships, that are shared by a set of products. Developing a product platform requires a multidisciplinary approach (Jiao et al. 2007, Pirmoradi et al. 2014) and many studies on product platforms focused on the underlying technical aspects, such as design optimisation and information technology support systems (Pirmoradi et al. 2014, Zhang 2015). Equally significant are the strategic aspects of product platforms on which very few studies focus on (Zhang 2015). A common strategic aspect studied within the recent research on MC and product platforms in the IHB context is the categorisation of product platform use in different business models regarding the degree of predefinition (Johnsson 2013, Jansson et al. 2014, Bonev et al. 2015, Jensen et al. 2015, Schoenwitz et al. 2017). Leveraging the amount of architectural and engineering design work being predefined, as opposed to the amount done during product variant specification, can yield an order-winning flexibility (Johnsson 2013, Hall et al. 2019). The use of product platform assets is a flexibility vehicle that enables IHB companies to combine components, systems and elements with these varying degrees of predefinition (Schoenwitz et al. 2017) into a right offering that meets the needs on a chosen market (Lessing and Brege 2015, Lessing and Brege 2018).

The highest degree of predefinition in IHB business models is commonly reached in timber frame single-family housing (Johnsson 2013). Most of the product parts are predefined, leaving a customer possibility to select a variant and configure predefined assortment options. According to Jensen et al. (2015), this is the least flexible MC-enabling use of product platforms, which has a high risk of misalignment between an offering and a market (Hall et al. 2019). Correspondingly, Khalili-Araghi and Kolarevic (2020) argue that houses nowadays must be offered with a higher design flexibility, where more parts are specified through configure-to-order and modify-to-order use of product platforms (Jensen et al. 2015). Consequently, considering product platform flexibility in the context of timber frame single-family houses is of high importance, as large investments are made for the development of building systems (Lessing et al. 2015), the acquisition of manufacturing resources (Lidelöw 2017) and the development of building information modelling (BIM) applications (Hall et al. 2019, Piroozfar et al. 2019). For every type of these business models, an important aspect that can give an IHB company competitive advantage is, therefore, a well-aligned product platform (Brege et al. 2014). Schoenwitz et al. (2017) developed a framework for the adoption of mass customisation in IHB, based on the alignment between the product architecture, degree of predefinition and customer preference. Khalili-Araghi and Kolarevic (2018) had the same goal, yet different means to achieve it. They developed a framework based on the fundamentals and technological developments in the design, customisation and manufacturing spaces. However, a coherent description of product platform alignment for the IHB companies is still missing in the literature.

The importance of and the need for more knowledge on the strategic aspects of product platforms is expressed both in the general (Zhang 2015) and in the IHB context (Johnsson 2013, Lessing et al. 2015, Hall et al. 2019). Therefore, the aim of this research is to expand the knowledge on the strategic aspects of product platforms, by describing product platform alignment in the IHB context. To fulfil this aim, two research objectives are formulated:

• Objective 1 is to synthesise a model that provides a coherent description of product platform alignment in the IHB context.

• Objective 2 is to identify the challenges related to the achievement of product platform alignment.

In the present research, the Swedish context has been studied, as the IHB business models are common in companies that operate on the Swedish market. The empirical data were collected in two IHB companies producing timber frame single-family houses with turnkey solutions for the private housing sector but also act as developers in the public housing sector. This must be taken into consideration when generalising for the overall IHB context that also includes multi-family housing.

In the following section, the frame of reference is described. This is done by defining theoretical constructs used as units of analysis and introducing the body of literature upon which knowledge contribution was built. After that, the method is described step by step, including data collection, analysis and the motivation for the choice of the case companies. To set the background for the empirical context which was analysed to achieve the objectives, case company descriptions are presented using business model (Brege et al. 2014) and product platform elements (Robertson and Ulrich 1998) theoretical constructs. The product platform alignment model is then introduced and the challenges are described. Finally, a discussion and conclusions are presented.

Frame of reference

This section is divided into two groups of relevant strategic research fields for this study: (1) mass customisation and product platforms and (2) business models and the external business environment. In each group, theoretical constructs are introduced and used as the units of analysis, as well as references that describe product platform alignment. The section is concluded with a research opportunity, based on the identified knowledge gap.

Mass customisation and product platforms

Mass customisation (MC) emerged as a response to the market conditions that occurred in the late 1980s. An increased variety in customer demands and requirements began to challenge manufacturing companies to deliver customised offerings, however, using efficient and mass production-like processes (Pine 1993). The main enabler of MC is product platform (Pine 1993, Robertson and Ulrich 1998), a concept that is based on balancing a combination of the commonality and distinctiveness embedded into the product and process solutions, which, in turn, enable the concurrent fulfilment of the required variety in offerings and economies of scale (Meyer and Lehnerd 1997). Robertson and Ulrich (1998) define product platform as a collection of four types of assets that are shared by a set of products: component, process, knowledge and people/relationships. Component assets are composed of elements such as product designs and the corresponding tools and fixtures in manufacturing. The design of production and supply chain processes, as well as fabrication and assembly equipment to make or assemble product components, constitute process assets. The examples of elements that knowledge assets are composed of are design know-how, mathematical models and testing methods. Relationships among members of a team, between teams or organisations and with suppliers and people constitute people/relationship assets (ibid.). A solution space (Salvador et al. 2009), i.e. the flexibility of a product platform, is determined by the elements of component and process assets (Johannesson et al. 2017). These elements can enable modular and scalable (parametric) configuration of product variants (ibid.) as a means of customisation.

IHB companies have become industrialised through a shift from a pure traditional project orientation towards product-oriented organisations, where product and process predefinitions have taken the form of platforms that are used during project execution (Lessing et al. 2015). IHB implies, but should not be equalled to, off-site manufacturing, as IHB companies integrate vertically in the supply chain to take control over more product life cycle phases (Lessing et al. 2015, Hall et al. 2019). In the traditional context of the AEC industry, off-site manufacturing can be used in e.g. integrated project delivery process, where a close collaboration is made together with architectural, engineering and construction disciplines (Sacks et al. 2018). These are, however, most often separate organisations. The benefits of product platforms can be best harvested in IHB due to the vertical integration (Johnsson 2013). These benefits include offering customised options, while maintaining or improving product quality and process efficiency, and potentially reducing lead times and costs (Jansson et al. 2014).

IHB companies have a two-dimensional organisation with product and project dimensions (Lessing et al. 2015). Both Jansson et al. (2014) and Bonev et al. (2015) position product platform development in the product dimension and product platform use in the project dimension. They investigate the relation between the two in the multi-family IHB context, characterised by the engineer-to-order specification processes. Jansson et al. (2014) studied customisation support methods, by which companies configure product platform assets to fit the project-specific parameters. The focus of investigation is on the specification stage of projects, i.e. processes of the architectural and engineering design (Olofsson et al. 2016, Sacks et al. 2018) were observed. Bonev et al. (2015) investigated how MC could be achieved in this context and focused on configuration processes. Malmgren et al. (2011) connected the product and project dimensions by investigating how a building system for a single-family housing can be configured to match customer requriements for the customisation without ad hoc solutions. By means of product modelling, they introduced the concept of upstream flow of constraints across the design domains, starting from the on-site assembly that defines building systems and downstream flow of requirements from the customers’ needs and wants in projects. Jensen et al. (2015) studied the relation between the degree of predefinition developed from building systems and MC specification processes. They further connected the different degrees of predefinition with the select-a-variant, configure-to-order and modify-to-order specification processes, introducted by Hvam et al. (2008). To enable configure-to-order and modify-to-order specification processes and a lower degree of predefinition, the flexibility of product platforms must be increased by incorporating object-based parametric modelling with building systems (Johnsson 2013, Jensen et al. 2015, Khalili-Araghi and Kolarevic 2020) in BIM environments (Sacks et al. 2018, Piroozfar et al. 2019). Building systems must be thoroughly structured and documented, that is formalised, where its integration within the structure of IT systems is becoming increasingly important in enabling efficiency and quality in specification processes (Sandberg et al. 2008, Jensen et al. 2015, Piroozfar et al. 2019, Khalili-Araghi and Kolarevic 2020). Finally, this enables digital manufacturing as a way to achieve a fit between building systems, IT systems and automated manufacturing systems (Lessing et al. 2015, Hall et al. 2019).

The reverse connection from the project to product dimension was also addressed in the literature. The input for the continuous and incremental development of platforms is achieved through the experience feedback channels upon the completion of projects (Thuesen and Hvam 2011, Jansson et al. 2015), enabling the longitudinal integration (Hall et al. 2019).

Business models and the external business environment

The theoretical construct of business models can be used to clarify how a company operates to create value in a market and can be described by its constituent building blocks (Casadesus-Masanell and Ricart 2010). The success or failure of a company mostly depends on the alignment between its business model building blocks (Sjödin et al. 2020) and the external business environment (Foss and Saebi 2015). This alignment describes the interplay or fit among elements by detailing the connections between them (Ritter and Lettl 2018). Apart from the alignment among business model elements, a broader strategical perspective embodies the alignment of situational factors, i.e. the external business environment with business models (Mintzberg 1993). The external business environment is a multifaceted concept, consisting of market attributes and legal, political, economic, social, cultural and other context-dependent elements (Sutherland 2004).

Situational contingencies are a part of the external business environment that IHB companies come across with in projects. Specific customer requirements and site conditions (Aitchison 2017) are typical examples. Moreover, Viking and Lidelöw (2015) identify the interpretive local requirement setting as detrimental in the IHB context. An interpretive local requirement setting occurs when local planning authorities, who are in charge of issuing building permits, interpret legal requirements and codes in a different way than an IHB company does.

Brege et al. (2014) coined an IHB business model structure consisting of three main building blocks: offering, market position and operational platform. Offering represents a value proposition of a company, by which the customer needs and requirements of the market are addressed through products and services. Offering intermediates between market position and operational platform. Market position is described through the segments at which an offering is targeted to, a role of a company in the supply chain and the relationships through which an offering is communicated, negotiated and developed. A strategic decision must be made regarding the prefabrication degree that characterises an operational platform. A house can be prefabricated in components (the lowest degree), panelised elements (medium degree) and/or volumetric elements (the highest degree). Operational platform is also composed of companies’ resources, competences, external resources from suppliers and partners, and the process through which these elements are organised and used (Lessing and Brege 2015). In this field, product platforms are regarded as a part of an operational platform together with the production processes. Therefore, the view on product platforms is narrower and component-oriented. On the other hand, the scope of an operational platform, as defined above, is in line with the product platform definition by Robertson and Ulrich (1998). Hence, to simplify the terminology in this study, the term “product platform” will be used together with offering and market position as building blocks of a business model.

Besides introducing the IHB business model construct, Brege et al. (2014) investigated and discussed a fit between three business model building blocks, and between these blocks and the external business environment. The scope of their study was on the IHB companies that had manufacturing resources as a starting point for the definition of business models. Lessing and Brege (2015, 2018) extended the knowledge on business models, by conducting their studies on the IHB companies having offering as a starting point for the development. This scientific discourse focused both on the types of business models and their structures and on the fit among business model elements and the fit between business models and business environments. However, a deeper analysis of product platform assets and elements alignment was missing.

The literature, as presented above, provides knowledge regarding product platform alignment in the IHB context. However, none of the studies shows a stand-alone coherent description. In order to describe product platform alignment, that knowledge should be synthesised into a model. Doing this solely based on the current knowledge is not an assurance that all important aspects will be considered. Therefore, the frame of reference was taken as a point of departure in conducting a case study in two Swedish IHB companies. The analysed empirical data allowed for a synthesis of a comprehensive model that provides a coherent description of product platform alignment and, therefore, to fill this knowledge gap.

Method

To visualise and explain the rationale behind the study and how the presented findings were obtained, the method is divided into eight steps of data collection and analysis, as presented in Figure 1. To ensure the research quality in terms of reliability, each step is explained below. The section is concluded with a motivation for the choice of case companies.

Figure 1. Step by step data collection and analysis.

Data collection and analysis

The initial need for the present study was derived from the contextual pre-understanding about, and the previous research (Popovic and Rösiö 2019, Popovic et al. 2019) done in collaboration with, one of the case companies. This provided insights into their strategies and development directions, as well as the technical aspects of product and production development. The sources of data were recorded interviews and meetings on various occasions related to the development of both building and manufacturing systems. Moreover, documents regarding design processes, product catalogues, building systems and manufacturing systems were studied. Finally, a contextual pre-understanding was built through observations made during visits to the manufacturing facilities. The observations were made on the lack of alignments between customer needs, products and manufacturing systems within the product platform. These were the keywords used in the initial literature review, where articles reporting on similar and closely related industrial needs from other case studies in the IHB context were identified and analysed. The main field of research among identified articles was product platforms. The literature on product platforms in a general industrial context was also reviewed. From this total group of articles, initial knowledge gaps were identified and theoretical constructs to be used as units of analysis were selected (Step 1 in Figure 1).

The theoretical understanding on product platform alignment was complemented by a case study, in which qualitative data were collected in two Swedish timber frame single-family house building companies, using semi-structured in-depth interviews. Therefore, in Step 2, an interview guide was formulated. The goal with the interview guide was to formulate questions with the terminology interviewees could relate to, answer with the freedom to elaborate through examples and allow for follow-up questions. As suggested by Fielding and Fielding (1986), the terminology was derived from the literature, i.e. product platform elements (Robertson and Ulrich 1998). Therefore, the following keywords were used to formulate the questions: alignment, product variation, manufacturing flexibility, product platform, market, development, method and support. The following questions were asked:

• What do you regard as a product platform? Please explain from your perspective, both in general terms and in terms of the company.

• Please elaborate from your own experience what is it in house design that customers see as value and what they do not see as value.

• Which processes in the whole product realisation process do you think add most value and which ones are unnecessary?

• How are products and the corresponding production developed in the company? Please name the methods, tools and/or concepts used for that purpose.

• How much are customer needs, products and production aligned nowadays?

• Which aspects of the development processes are important in terms of the alignment between customer needs, products and production?

• How is alignment currently ensured during development projects? Please name which methods, frameworks, systematic approaches, routines, etc. are used.

• Which challenges exist in regard to the mentioned aspects?

• What do you think is necessary to do and add to development projects so that a good alignment can be reached? Which requirements or conditions are required to be present?

• What is your opinion on the changing levels of flexibility, automation and people in the company now and in the future?

The choice of interviewees in both companies was made to ensure that the marketing, product, design and manufacturing parts of the organisations were included, thereby covering the knowledge on product platforms (Robertson and Ulrich 1998). The respondents’ positions from company 1 were the following: product manager, chief architect, BIM developer, technical manager, structural design manager and production manager. In company 2, individuals from the following positions were interviewed: product manager, production developer, production manager, technical manager, marketing manager and BIM developer. The duration of interviews was about 1.5 h and the same set of questions, as presented above, was posed to all interviewees (Step 3). Depending on their answers, follow-up questions were asked. All interviewees were more comfortable with their native language, Swedish. Hence, the interview guide was translated, and the contextual pre-understanding was used in order to get the terminology right. Documents such as drawings and building system descriptions, factory and on-site visits in the companies provided additional source of empirical data through observations, which was a part of data triangulation.

Initial empirical data analysis and synthesis (step 4) were conducted according to Miles and Huberman (1994) through three steps, namely, condensation, displaying and verification. The interviews were transcribed to English and analytic memos had already been written during this phase, which further helped to generate the categories during the analysis. Hence, the units of analysis were applied on condensed empirical data, in order to categorise it. The synthesis of the initial product platform alignment model was achieved through inductive inferences and several iterations of displaying and verification steps with two interviewees in one of the case companies. Their input, and the empirical data collected, indicated the importance of the external business environment when describing product platform alignment. Therefore, an additional literature review was conducted (Step 5) to broaden the scope of the frame of reference, i.e. revise knowledge gaps and units of analysis. Business models are the field of research that connected product platforms and the external business environment in the IHB context (Brege et al. 2014, Lessing and Brege 2015, Lessing and Brege 2018). The terminology regarding the external business environment in the project dimension of IHB was adopted from Viking and Lidelöw (2015) and Aitchison (2017). The units of analysis were revised to the state as presented in the frame of reference and applied on empirical data in conducting analysis and synthesis iteration (Step 6).

The final verification stage (Miles and Huberman 1994) was conducted by means of triangulation within the cases (Jenner et al. 2004) to work for a high validity of the results and the study (Carter et al. 2014) (Step 7), as well as the positioning of knowledge contributions (Step 8). Triangulation can be crucial for qualitative case studies (Farquhar et al. 2020), as it can increase the understanding and perspectives that otherwise not would have been detected. This step was conducted separately in each company in validation workshops with the individuals who took part in the interviews. The synthesised product platform alignment model was presented and scrutinised for its validity and generalisability, i.e. being common to both companies. The challenges met were partly common; therefore, a particular set of challenges was presented in both companies. All workshop participants were given the possibility to reflect about one’s own answers, but as well about the other interviewees’ answers on the respective question. As a result, minor changes in the interview data and findings were made, as misunderstandings could be uncovered, or more detailed explanations could be given at some points. By proceeding in this way, the demands of triangulation were considered and met.

Choice of case companies

Two Swedish IHB producers of timber-frame single-family houses were selected. The main reason why these companies were regarded as suitable for the case study is that they offer turnkey products and as IHB companies are in control of several life cycle phases. They achieve vertical integration between sales, architectural and engineering design, manufacturing, transportation and surveillance of on-site assembly. Vertically integrated house building companies can best take advantage and benefit from product platforms (Johnsson 2013, Lessing et al. 2015, Hall et al. 2019). Moreover, they are currently working on the alignment between their present products and manufacturing systems (Popovic and Rösiö 2019) but as well on product platform development (Popovic et al. 2019). Finally, the case companies use different predefinition degrees and prefabrication technologies to enable MC at different levels (Jensen et al. 2015).

Description of the case companies

When compared with other companies in the Swedish market, the case companies are considered to be large producers in terms of annually produced houses and the number of employees. Geographically, they supply the markets across the whole country. They act as direct competitors and operate via two business models each, i.e. BM 1a competes with BM 2a and BM 1b competes with BM2b. These competing pairs of business models have the same market position and similar offerings; however, their product platforms differ. Company 1 delivers on average 1300 houses per year with two business models combined, while Company 2 in the same respect delivers 500 houses per year (Table 1).

Table 1. Case study companies.

Company	Houses/year	No. of employees	Business model	Prefabrication of	Degree of predefinition
1	1300	793	BM 1a	Volumetric elements	High
			BM 1b	Panelised elements	Low
2	500	252	BM 2a	Panelised elements	High
			BM 2b	Panelised elements	Low

In the following paragraphs, a description of market positions and offerings (Brege et al. 2014) of four business models is given. Furthermore, product platforms are described through assets and elements, as defined by Robertson and Ulrich (1998).

Market position

Regarding the role in the building process, both companies act as the main contractors for all their business models. The companies guarantee the product delivery and quality; however subcontractors are engaged locally in the processes of foundation preparation and assembly once the prefabricated elements and modules arrive at the building site. With BM 1a and BM 2a, the companies target the same market niche of customers, which are young families with lower-to-medium incomes, while BM 1b and BM 2b are differentiated by being aimed at a broader market, where customers are medium- to high-income middle- and older-age families.

Offering

In the case of BM 1a and BM 2a, the offerings are in the form of catalogues of predefined house models. The offerings also include customisation options, where a customer can make choices regarding a narrow scope of predefined assortment. However, the customisation options do not include any geometrical changes of house designs apart from limited changes in floor plans by adding or removing inner walls. In the case of BM 1b and BM 2b, the offerings are more flexible, which is in accordance with the target markets they address. The offerings also include catalogues; however, they are differentiated from the catalogues in BM 1a and BM 2a. Here, customisation options of broader scopes of high-standard predefined assortment are made available. Furthermore, the offerings include modular and scalable configuration of geometry, where a customer is permitted to take a catalogue model as a starting point and, together with sales personnel and an architect, make design changes. In the case of business model 2b, customers are even permitted to choose from outside the predefined assortment.

Product platform

The building systems in both companies are based on timber-frame structural components, from which panelised elements are assembled. Company 1 even combines panelised elements into volumetric elements (BM 1a). The building systems within each company, for example exterior wall elements in BM 1a and BM 1b, share commonalities to a large degree, as they address the same legal requirements and codes, similar customer needs and shared BIM tools, and various IT and manufacturing systems. The current manufacturing systems in Company 1 were bought at the end of the 1980s and were optimised according to a building system that was used for the design of standard-type houses at that time. The regulations, codes, customer needs and requirements changed over time, influencing the development of the building systems and the choice of suppliers. However, the development of manufacturing systems did not follow to the same extent and is now being utilised with lowered efficiency as a shared resource between BM 1a and BM 1b. Company 2 has, alternatively, not invested in any manufacturing automation apart from one CNC machine for the kit-of-parts operation, relying exclusively on assembly lines and working benches combined with skilled carpenters.

In Company 1, there are very few process commonalities between BM 1a and BM 1b due to differences in both the degree of predefinition and prefabrication approaches. In Company 2, two business models share many process commonalities in manufacturing and downstream processes, due to the same prefabrication approach with panelised elements assembly in both BM 2a and BM 2b. Company 1 has over time digitalised parts of its processes through various IT systems, which are common for both BM 1a and BM 1b. For example, building information modelling (BIM) tools and ERP systems are shared. BIM is managed by a combination of two types of software, Autodesk Revit® and hsbcad®, where the former is used for the architectural 3D object-based modelling in the customer view and the latter for the quantity take-offs and specifications for manufacturing and on-site work processes in the engineering view. A web-based configuration tool is used for the offering of BM 1a; however, information exchange with other IT systems is handled manually. In contrast, the company developed means of automatic unidirectional interoperability for the exchange between Autodesk Revit® and hsbcad® as well as quantity take-offs between hsbcad® and the ERP system via digital bill-of-material (BOM) link. Company 2 currently uses only Autodesk Revit®, as the need for digital manufacturing is relatively low. However, the company utilises object-based parametric modelling to a higher degree within this BIM tool. BIM models are enriched with the engineering design information, i.e. mechanical, electrical and plumbing (MEP) systems and structural systems. Moreover, the company is working on integrating energy performance analysis within this BIM tool.

Knowledge regarding the described product platform assets is, to a certain degree, formalised in IT systems in both companies and can, therefore, be incorporated and efficiently reused in processes. However, it is mostly individuals from the research and development (R&D) group and operational staff who have the necessary know-how and experience to manage the processes. Stable and long-term relationships with chosen suppliers are of great importance for the company, as this can affect the quality, lead time and price of the products. Suppliers are divided into those who deliver assortment options, material and components and different types of services, such as engineering design for MEP systems and different performance and functional analyses.

Product platform alignment model

In this section, the analysis of empirical data that addresses the first objective, that is to synthesise a model that provides a coherent description of product platform alignment in the IHB context, is presented. The model (Figure 2) consists of product platform elements (Robertson and Ulrich 1998), market position, offering (Brege et al. 2014) and the external business environment (Sutherland 2004, Viking and Lidelöw 2015, Aitchison 2017) and the connections and interplay (Ritter and Lettl 2018) between them. It is a general description common to all four business models investigated. The model is divided vertically into dimensions of the external business environment and the business model (Brege et al. 2014) and horizontally into product and project dimensions (Lessing and Brege 2015).

Figure 2. Product platform alignment model.

The analysis of the empirical data shows that product platform alignment can be divided into five modes, which are achieved by means of the product platform development and use processes. Product platform use processes are further divided into offering development and product variant realisation (Table 2).

Table 2. Modes of product platform alignment and processes by which they are achieved.

Alignment mode no.	Alignment between	Process
1	External business environment in product dimension, market position and building system	Product platform development
2	Product platform elements	Product platform development
3	Product platform elements, offering, market position and external business environment in the product dimension	Offering development
4	External business environment in the project dimension, offering, product platform elements and product variant realisation	Product variant realisation
5	Product variant realisation and product platform elements	Product platform development

Alignment mode 1

A strategic choice of market position (4) regarding the target market/s (1), the role in the building process and legal responsibility (2) is made by the top management (5). A market analysis, i.e. the information on the needed flexibility concerning both current and future customer needs regarding house functionalities, assortment and layout design (1) but also market risks/opportunities (3), is performed by the marketing department (5). Marketing manager in Company 2: “When we sit and discuss the development we usually need to choose what currently is the most important for the market and how we can make it profitable by producing it efficiently and focus on that in our development effort.” Altogether, this information acts as a set of requirements and constraints used by cross-functional teams in the research and development (R&D) department (6), which is responsible for developing and maintaining building system(s) (8). Structural design manager from Company 1: “There is an upcoming legal requirement regarding wind loads for which we need to redesign our building system, so the beams go along the house height. This change will consequently require another way of manufacturing.”

Alignment mode 2

An interplay between a building system (8), manufacturing systems (9), chosen supplierś offering and relationships (10), IT systems (11) and R&D (6) represent alignment mode 2. Based on building systems, processes are developed, improved and partly formalised in IT systems; investments are made into manufacturing and IT systems; long-term relationships with suppliers are created; and knowledge among R&D personnel increases. Technical manager in Company 1: “The big question is about the next trend when it comes to house design. We need an answer to this question in order to make right decisions for the investments into our manufacturing, IT systems and methods.” On the other hand, the development input for building systems derived from the external business environment (alignment mode 1) must be complemented with the constraints imposed by these elements. Product manager in Company 2: “Our building system is developed according to our almost completely manual assembly. In the near future we will need to redesign it for more automated and efficient manufacturing.”

Alignment mode 3

The processes of developing offerings (12) are central to the product platform use in the product dimension. The R&D department, together with consultancy firms, uses knowledge on a product platform and the external business environment in product dimension to develop and document offerings in IT systems. The goal is to develop offerings that concurrently enable efficient product variant realisation processes and are flexible to match the chosen market position and the external business environment in the product dimension. Marketing manager in Company 2: “Every house model in the BM2a offering has an over-dimensioned structural solution for the wall around main entrance door, which allows us to make an entry roof a customisation option. These reinforcements cost a bit more, but in the long run we save money as it is more expensive to change all the time between the solution with and the solution without the reinforcements. We also earn nice money selling this customisation option.” An offering can consist of a catalogue of predefined products and customisation options. Customisation can be in form of modular configuration of predefined assortment options and layout changes, which are developed according to a forecast. On the other hand, modular and scalable configuration of geometry is a customisation option included in highly flexible offerings. Clear communication of product platform solution space to sales offices is a critical aspect for this type of offering. Technical manager in Company 1: “A platform is about the solution space. Then there can be a great number of possibilities for flexible design and customisation but it has to be predefined and the strategical decision should come from the highest management and leadership. That the entire chain, in every step of the process, is communicated well when it comes to this platform and that everybody follow the same rules.”

Alignment mode 4

Product platform use in the project dimension is related to the product variant realisation processes (15), realised by operational staff (14). Inputs are based on situational contingencies, i.e. the external business environment in the project dimension (13), and the offering (12). Situational contingencies can be a result of the local requirement setting, site conditions and specific customer requirements. Additional architectural and engineering design processes can take place during the specification stage of product variant realisation. It is a consequence, when (a) the modular and scalable configuration of geometry is offered and/or when (b) the parameters of situational contingencies do not match the parameters of catalogue designs and the total set of customisation options. Chief architect in Company 1: “Some people buy catalogue houses as they are, but most of the customers want to change the design. When I start designing a specific house model, I need to consider the plot where the house will be built. Moreover, the municipality can influence the design and the technical solution which we need to address.” These are additional architectural and engineering design processes that require cooperation between operational staff, R&D department and consultancy firms in finding an optimal product platform-based solution. Marketing manager in Company 2: “To develop a unique house we work cross-functionally and follow our building system which is mainly based on general regulations and then the development requires a lot of additional work.”

Alignment mode 5

The operational staff must document their experiences and knowledge regarding potential improvements. Production manager in Company 2: “What we measure in terms of cycle and takt times is an important input for the building system design. For example, if we can show that one way of producing an edge/corner is six minutes slower, compared to the other way, then we have clear facts that support a decision.” Some parameters of the situational contingencies and their effect on the product variant realisation processes provide input for the R&D department for a continuous and incremental product platform development. This input is in the form of experience feedback. Technical manager in Company 2: “There is a lot of existing knowledge about how it worked in earlier projects. The entire chain needs to give feedback: from the architect that tells you what the customer really wants, to the technology department what we need to know about the legal requirements or from the contractors what works and what does not.” The formalisation of processes in the IT systems can provide a digital documentation of project outcomes and, as such, can be made available and efficiently accessed by the R&D department during product platform and offering development processes. Product manager in Company 1: “The documentation regarding past projects and earlier decisions is very important. The availability of this information can enable us to make sound decisions and avoid repeating mistakes.”

Challenges

Achieving product platform alignment is hindered by several challenges that are a combination between the product platform, the business model and the external business environment elements. In this section, an analysis of empirical data that addresses the second objective, that is to identify the challenges related to the achievement of product platform alignment, is presented.

Continuously achieving the alignment between the changes in legal requirements and customer needs over time, and the product platform flexibility (alignment modes 1 and 2) is a challenge. Product manager in Company 1: “It is a challenge to follow the trends. In former times it was much easier as the demand was simpler. Every decade in the past had a very narrow specific set of customer requirements. Now it is a mix of everything on the market.” The challenge is present in Company 1 and to some extent in Company 2, due to a relatively low level of manufacturing automation. The product platform might lack the flexibility to efficiently adjust to new requirements, which extend outside the product platform solution space. Production manager in Company 1: “The key point with the platform thinking is to have the flexibility in manufacturing investments to never delimit future product variation.” A redesign of the building system, without a concurrent investment in the manufacturing system, is possible to fulfil performance requirements. Production manager in Company 1: “Fastening of the sheet material like we do today is possible but is an inefficient and unergonomic process to be performed manually. So instead of introducing the new material for sheeting that meets structural requirements and enable process improvements, the problem is likely to be solved in a sub-optimised way by investing in very expensive nailing machine. Then perhaps in three years the design team might decide to change the sheeting material.”

However, product platform development caused by changes in customer needs and legal requirements and codes often leads to changes only at the building system level. Therefore, these are “over-the-wall” designs that are pushed to manufacturing, as making investments is often avoided due to the financial risk involved. Production manager in Company 2: “Production, more or less just, has to accept design solutions. There we have a ‘push’ and it needs to be managed somehow.” This over-the-wall design leads to a lower efficiency in the manufacturing processes, as dedicated systems cannot be adjusted for optimal use (alignment mode 4). Technical manager in Company 1: “In 2006 horizontal siding panels became popular. Therefore, we pushed this solution through our exterior wall assembly line even though it was not made for it. Then after some years the company invested in this Randek nailing machine. Now 75% of the houses we sell are with horizontal siding panels.”

Specified in the legal requirements and codes, different climate zones across the country are characterised by different snowfall, wind strength/direction, air temperature and humidity. These are high-variation functional and performance requirements that have implications on building system development (alignment mode 1), alignment mode 2 and offering development (alignment mode 3). Both companies approach achieving this combined alignment by developing optimised standard solutions for certain climate zone(s), e.g. where the sales are highest. However, this leads to a suboptimised alignment mode 2, as these building system solutions and developed offerings might be over-dimensioned/under-dimensioned for other markets (not achieving alignment modes 1 and 3). Product manager in Company 1: “Applying the principle of over-dimensioning is not always possible because if we for example, ‘solve’ a house model according to the requirements in Luleå it would be way too expensive to sell it in Malmö.” Similarly, site conditions and specific customer requirements can be miss-aligned with standardised solutions (alignment mode 4), Product manager in Company 1: “Landscapes vary and can influence to that extent that we need to adjust every house to it, especially the houses on steep terrain with basements.”

Developing optimised solutions for offering is challenging from the perspective of efficiency of these development processes (alignment mode 3), specifically in BM 1a and BM 2a. Development requires the R&D department to cooperate with consultancy firms and, therefore, combine knowledge on both legal requirements (different performance and functional requirements) and constraints stemming from product platform solution space. Several iterations between architectural and engineering design disciplines are carried out in processes that lack structure. Ultimately, offerings are prepared and documented in IT systems, but as the knowledge on product platform solution space is not formalised to a high extent in IT systems, e.g. object-based parametric models, it cannot be efficiently reused. Structural design manager in Company 1: “The support, in my opinion, should be developed for architects when they are designing new houses so they can understand the limits of our building system.” Thus, processes are time-consuming, costly and lack structure. Marketing manager in Company 2: “We have a closed building system and often it happens that our architects lack knowledge about it so they design something we cannot produce efficiently.” For example, a consultancy firm is employed for dimensioning the MEP systems and coordinating its design with the structural systems design. The offering development process is, therefore, vertically fragmented, as a part of the BIM process and engineering knowledge are outsourced. Technical manager in Company 1: “To specify structural design of a BM1b house model is much simpler than for a BM1a due to the volumetric element prefabrication. Installations are the problematic part here.”

A niched offering with a high degree of predefinition, such as in BM 1a, can significantly drop in sales when demand fluctuations, political decisions and changes in competition with other companies occur (alignment mode 3). However, it is a challenge even in other investigated business models, when these changes in the external business environment occur. These market risks and opportunities are considered when developing product platform (alignment modes 1 and 2) and offering (alignment mode 3); however, when the changes occur, the consequences are experienced in projects (alignment mode 4). When the demand drops, both companies struggle to get orders, which gives customers more negotiating power regarding specific requirements. Structural design manager in Company 1: “We have no choice other than to deliver these, for us difficult houses, if we want to survive as a company now when the market is ‘low’. There are only the customers with a lot of money out there now that want to buy a house and they want unique solutions and possibilities for customisation.” Often miss-aligned customisation options that do not match these specific customer requirements and interpretative local requirement setting require additional architectural and engineering design during the specification stage. The time and cost estimates of additional architectural design iterations with a customer before an order is confirmed are hard to make. Product manager in Company 2: “We can spend many hours in the sketch phase without knowing whether or not we will get paid for those, since the order is not yet confirmed.” Here, the effort is made to keep the solutions as much as possible within the border of the building system, i.e. the manufacturing system capabilities and chosen suppliers. However, most often, additional engineering design activities are needed for unique solutions, resulting in an inability to use the manufacturing systems efficiently or not being able to use them at all, therefore performing these activities in a traditional manner at the building site. Structural design manager in Company 1: “A bad example of alignment is when we need to manufacture our special elements on the side bench as they cannot be fed through the assembly line.” Moreover, sending unique solutions to the building site further increases the costs and the possibility of errors to occur. Finally, costs might increase due to the purchasing of small volumes from another supplier. Marketing manager in Company 2: “The problem is that we often cannot get paid high enough for the time it takes to check if these proposed solutions and materials fulfil all the regulations, find the supplier and negotiate the price.” Some customers are prepared to pay a very high price to cover all these costs. However, the very long lead time and complexity of these projects might fully occupy both the R&D and operational staff to get the work done, while in the meantime, the market can recover, and the company must quickly employ more staff to be able to keep up. Production manager in Company 1: “We often don’t have the means to get new people as soon as the market goes up. It costs a lot.”

Both companies in all four business models currently face a challenge related to the people/relationship assets in terms of internal organisation and culture. Product manager in Company 2: “The biggest issue for the design processes is to convert the people’s mindset.” The most significant example that reflects the challenge is a resistance to change towards digital development and IT system integration. In both companies there are many IT systems in use that have been developed over time but without a long-term vision, as every IT system addresses various operational issues in a suboptimised way. As a result, the information flow in the processes of product platform development and use is inhibited. Operational staff is engaged to mediate the information flow between the IT systems, resulting in poor efficiency and an error-prone process. Chief architect in Company 1: “The people employed here are doing the best they can with the IT systems resources given.” The development of IT system structures can result in changed workflows that improve the overall process efficiency and quality but require an employee to adopt to a new routine or even shift to other tasks. Product manager in Company 1: “The implementation of changes is a very long process due to our organisation. People need to get used to the new ways of working.”

Discussion

At the outset of the discussion, the issue with describing four assets (Robertson and Ulrich 1998) in the product platform alignment models is outlined. Instead of assets, the elements that are aggregated into assets were used to model product platforms. The reason is that the abstraction level of product platform assets could not provide a comprehensive elaboration of interplay taking place in each alignment mode. For example, building system, manufacturing systems, suppliers and IT systems are product platform elements that are grouped in the product dimension to highlight product platform development processes, which take place outside projects (Jansson et al. 2014). This group is a combination of all four types of assets. Product variant realisation processes represent the use of these elements when a customer enters the supply chain. Hence, they are placed in the project dimension. However, at the same time, knowledge about product variant realisation processes can be formalised in IT systems, which can aid the offering development processes. Another example is with the R&D department and operational staff that partly represent knowledge and people/relationships assets. Therefore, product platform assets are intertwined and distributed across elements in both product and project dimensions of the model.

Applying the chosen theoretical constructs on the empirical data led to a synthesis of a model that provides a coherent description of product platform alignment in the IHB context. The model is in line with the frame of reference, i.e. the description that could have been conceptually synthesised from the literature. However, having a comprehensive empirical evidence collected in two IHB companies adds validity and reliability to the findings. The model expands the current knowledge as five alignment modes are introduced, based on the processes of product platform development and use. Moreover, alignment modes aid grouping of identified interplays that take place between product platform, business model and the external business environment elements. The influence of the external business environment in achieving product platform alignment is in line with the findings of Schoenwitz et al. (2017). However, the introduced alignment modes describe the interplay in greater detail. Finally, the model integrates product and project dimensions (Lessing et al. 2015) as an important characteristic of IHB and positions the elements in each dimension. The identified challenges hindering product platform alignment in the case companies additionally enrich the description as they point to the associations among the alignment modes.

The results of this research indicate that, from a business model perspective, one central aspect of product platform alignment is offerings, which is in line with the findings of Lessing and Brege (2015, 2018). A strategic decision according to the forecast must be made regarding an offering flexibility, which later enables or hinders its effectiveness on the market (Brege et al. 2014). The offering flexibility can be lower or equal to product platform flexibility, i.e. its solution space. Given that changes in the external business environment do not require expansion of the solution space, it all boils down to the capability of a company to efficiently explore and exploit this solution space in the offering development processes, thus enabling the achievement of alignment mode 3. Furthermore, the same capability enables the achievement of alignment mode 4 during the product variant realisation. This capability is dependent on the integration between product platform elements such as building systems, IT systems and manufacturing systems (Sandberg et al. 2008, Jensen et al. 2015, Lessing et al. 2015, Hall et al. 2019, Piroozfar et al. 2019, Khalili-Araghi and Kolarevic 2020), as a means of product platform knowledge formalisation (alignment mode 2). This is a common finding between this research and the framework developed by Khalili-Araghi and Kolarevic (2018). The development of BIM applications and product lifecycle management systems that together enable seamless information exchanges within an IT system structure and digital manufacturing are suggested technological enablers (Sacks et al. 2018). However, if the product platform solution space must be expanded due to the changes in the external business environment in the product dimension (alignment modes 1 and 2), manufacturing systems become critical product platform elements, which is in line with the findings of Johnsson (2013). The flexibility of manufacturing systems and the ability for reconfiguration to adjust the solution space without the need to replace the whole system become crucial. This is researched in the area of changeable manufacturing systems (ElMaraghy et al. 2013), which is firmly associated with the areas of mass customisation and product platforms. Yet, this is an unexplored aspect in the IHB context (Popovic and Rösiö 2019).

Increasing the flexibility of product platforms can enable IHB companies offer modular and scalable configuration of geometry with efficient product variant realisation (Bonev et al. 2015, Jensen et al. 2015, Piroozfar et al. 2019, Khalili-Araghi and Kolarevic 2020), which is regarded as an MC-enabling use of product platforms currently needed in this industry. Hence, changes in the external business environment can act as incentives for the further development and implementation of MC (Larsen et al. 2019), which, in turn, can aid companies in overcoming the challenges with product platform alignment.

Conclusions

Achieving the alignment between product platform, offering, market position and the external business environment in IHB companies is often hindered by a lack of understanding of the interplay that takes place between these elements. Moreover, a coherent description of product platform alignment is missing in the literature. The conducted case study and the empirical data analysis using the identified theoretical constructs aimed at filling this knowledge gap. A comprehensive model is synthesised to describe product platform alignment and the challenges for its achievement were identified. Theoretical contributions are made to scarcely researched strategic aspects of product platforms and to the field of IHB business models.

Regarding the industrial implications of this study, the upper management of an IHB company can benefit by using the product platform alignment model to conduct a holistic analysis of business models and identify development opportunities. Moreover, the model can be used as a means for companies to communicate and increase the understanding of business models and product platforms across the organisation, leading to a cultural change, which poses a challenge to the product platform alignment from the internal business environment perspective.

Future work can include empirical data collection and analysis in the context of multi-family housing to expand the knowledge on product platform alignment in IHB. Although there is currently an abundance of research done on BIM development, the contributions made are in the context of traditional construction and fragmented supply chains. Studying how these technical advances could aid the formalisation of product platform knowledge in the IHB context, where companies vertically integrate across the supply chain, would be a valuable contribution to both theory and practice. Furthermore, significant potential for knowledge contributions lies within the research on the changeability of manufacturing systems in connection with digital manufacturing in the IHB context.

Acknowledgements

This research project is part of the graduate school ProWOOD which is a collaboration between the School of Engineering at Jönköping University, Linnaeus University, Nässjö Träcentrum, several companies, and two research institutes. The graduate school is financially supported by The Knowledge Foundation (KK-stiftelsen).

Disclosure statement

No potential conflict of interest was reported by the author(s).