Product platform replacement: Impact of performance objectives, innovation speed, and competition

Product platforms are assets shared by multiple products. Their primary purpose is to offer product variety while keeping time-to-market and operational costs down. As new products are developed over time, the question arises when to replace a platform. The repetitive use of the same platform for multiple product generations keeps platform development time and costs low. As the platform gets obsolete, however, the time and efforts to adapt the platform to the newest product will go up. With these dynamics in mind, we develop a simulation model to gain insight into the desired platform replacement planning. We examine how platform replacements are impacted by a firm’s performance objectives, the speed of innovation, and the competitive landscape.