Individual Pathways - a cost management approach for product development in mass customization

Product design holds the largest impact on product cost. Numerous investigations confirm this conclusion. Although there is a considerable amount of literature available on costing methods for product design, only a few approaches consider the specific requirements of mass customized products. By adopting the model of Integrated Patient Pathways, developed for health care costing at a hospital in Switzerland, this paper proposes the method of Individual Pathway Costing for individualized products. The Individual Pathway is a kind of guideline or standard process for product adaptation to customer’s preferences, and contains default expenditure values e.g. for resource assignment. This approach is based on the determination of resource consumption, designed to fulfil the individual customer’s demands, similar to the principle ideas of Activity Based Costing. Furthermore, the presented method contains an approach for the determination of uncertainties of cost estimation by using statistical triangular distribution.     «

Product design holds the largest impact on product cost. Numerous investigations confirm this conclusion. Although there is a considerable amount of literature available on costing methods for product design, only a few approaches consider the specific requirements of mass customized products. By adopting the model of Integrated Patient Pathways, developed for health care costing at a hospital in Switzerland, this paper proposes the method of Individual Pathway Costing for individualized product...     »