"Is your engineering holding your company's growth back?"
Do you recognize these pain points?
Your company cannot set a product standard
Projects consistently exceed their budget
Your warehouse is filled with obsolete parts
You cannot find the engineers that you need
Service engineers frequently lack the correct part during service calls
If you recognise these challenges, you are most likely operating in a market with a low production volume and high product variation and complexity. Your clients discuss their product’s configuration directly with the engineering team.
In such circumstances, it’s hard to organise the business processes to allow for variation and last-minute changes while maintaining your profit margin.
If you want to allow your customers to configure their product without these adverse side effects, Modular5® can help. We developed a framework to help companies like yours conquer the hurdles when modularising their product range.
Who are we:
Modular5®, founded by industry experts, is a global consultancy & engineering firm supporting your company’s transformation to a modular enterprise. The founders each have expertise in a different field. Merged, we cover & manage the Modular5 methodology. Together with our local champions, we guide you step-by-step through this transformation.
“Experts in enabling ambitious organisations to transform complex products to configurable modular solutions”
Product variety management is key for modular design
Imagine, invent, and inspire
Operational excellence is a way of life
Thinking in markets boosts your sales
1. Standardizing product varieties and options leads to higher client satisfaction
A common misconception is that clients will be happy if all their requests are honoured.
In reality, customers care most about on-time delivery and product quality, provided that their minimum requirements are fulfilled.
The effect of accepting most wishes is that each product delivered by your organisation is unique, which has an adverse effect on quality, lead time and cost. Last-minute change requests magnify these adverse effects.
By implementing a modular product design that addresses product options in a smart way, your clients can configure their products to fit their needs while your organisation delivers standard products. Most important, delivery is faster, the quality is higher and the price is lower.
2. Modularity in product design will keep your best engineers challenged and engaged
Modular design is challenging. After the portfolio is fully developed, your best engineers have time available to develop the bespoke options that remain.
Secondly, your turnover increases, so more challenges enter the department. The department moves from doing mundane work under high pressure to quietly delivering excellence for complex customer requests.
3. If you focus on costs, your costs will increase
It seems sensible to focus on profit or cost if you strive to increase profitability. We have found this to be one of the gravest mistakes you can make!
The effect of focusing on cost is that departments locally decrease the expenses, ignoring the impact on the entire chain.
Secondly, materials and parts are often substituted by those with lower prices. Short term, the effect is lower cost. Over time, the result is increased cost due to decreased quality or fit with the product.
Departments start arguing about who should bear expenses. If spending is unavoidable, it does not matter who in the company pays; the effect on the bottom line is the same. The time and energy wasted on these discussions and the strain on the relationships diminish the company’s power.
Why many initiatives fails:
Typical pitfalls in the transition to a modular enterprise are:
1. Agreement about the level of modularity
By creating too large and complex modules or too small modules, the benefits do not materialise for the company.
Often, the technical challenges of modular design are not recognised. Management focuses on the functional requirements to push the product to the market.
2. Roadmap or action plan
Two key ingredients are needed for the roadmap: Vision and measurable progress (KPIs).
Without a clear action plan, the vision is not embraced by the staff.
Without measurable progress, employees fall back into their daily routines, and the transition loses momentum.
3. Systematic approach
Lack of knowledge and experience in the transition to a modular enterprise often leads to a trial and error approach. The trials are not aligned and in some cases contradicting. The effect is that employees get confused about the goal and how to get there.
4. Insufficient resources
Your organisation is fully occupied with fulfilling the client orders. There is no capacity to develop a modular product portfolio; modularising your products is a large project!
Hiring extra people is a gamble that most management teams don’t take because of the uncertainty, risk, and cost involved.
In these cases, modularisation of the product becomes the project for the down hours, resulting in limited progress and an inconsistent product design.
Companies in the low product volume, high product complexity markets that make a healthy profit and deliver on time use intelligent design methods combined with operational excellence.
Their product designs are structured to allow customers to choose options late in the build process while standardising the largest part of the design. They combine smart customisation with modular design; your customers feel they can choose what they want while your factory makes standard products.
We call this total, all-encompassing approach ‘Modular 5’. Transforming your business into a modular enterprise with the Modular 5 methodology lays the foundation for a healthy business.
Your organisation is attractive to talented people who push you to the next level,
New business models emerge when you reach higher maturity levels.