Shared Product Architectures for Engineering-to-Order Buyers and Suppliers: Insights from a Case Study

This paper explores the potential for engineer-to-order (ETO) companies to capitalise financially on their modular product architectures by sharing them with their suppliers. Few scholars have studied product architectures being shared across buyers (ETO companies) and suppliers. While the topic’s relevance has previously been demonstrated, scholars tend to leave out details on how the shared elements of architectures, respectively, benefit the company and with what financial effect. The study aims to develop a framework for describing a shared architecture and to test it in a case study of an ETO company and two of its tier-one suppliers. The framework is built on existing research and the case work of this paper. The study identifies three key aspects of a shared product architecture: a common system decomposition, modules and interfaces that are financially driven by interorganisational alignment of key design characteristics, and a series of coordinated activities that are consistent and mutually beneficial for both organisations. The results show that the ETO company saw 10–35% cost saving on supplier scope after developing the shared architecture. The study contributes to the literature on product architectures and provides insights for ETO companies aiming to enhance financial performance through modular architectures.