29/11/2024. How modular product design changes after-sales

Think about this: You are the CEO of a successful OEM that makes complicated systems combining structural elements with moving parts, electrical, pneumatic, and maybe even hydraulic systems, and sensors and control systems – a mechatronic system.

Even though your order books are full, you can’t sleep because service costs are increasing, there aren’t enough engineers, and people are putting more pressure on you to reduce your environmental impact. The customers are clearly unhappy, and it’s starting to hurt your sales pipeline because

Sound familiar? 🤔

Your service team has trouble keeping up with all the different designs ‘in the field’ to meet customers’ needs. Each malfunctioning product must first be diagnosed before a fix is determined.

It’s not easy to predict when parts will be available; they often need to be made from scratch. Your expert engineers are overstretched. At the same time, your users want better uptime and faster response times.

The catch is that forward-thinking OEMs are changing their after-sales operations by using modular product design. This is bringing in up to 50% more money from service operations. Let’s look at how this changes the market for after-sales services.

How to Get Out of the Custom Design Trap

“But my customers demand unique solutions!”

You’re not the only one who has had this thought. But think about this: customers always choose the smart option when given a solution that fits their needs, is more reliable, is delivered faster, and costs less.

Custom design is only appealing when it offers all these benefits at the same price. For the right price, clients choose a fit-for-purpose solution over a bespoke product design.

Developing the hardware, systems, and software parallel is advantageous, especially for standardised solutions. After releasing the order configuration of the standard building blocks, technicians and engineers diligently work on the required customisations and product development.

Standardised modules offer many benefits:

• Lower reliability risks.
• Faster delivery.
• Guaranteed functionality and productivity.
• Cheaper maintenance and repairs.
• High uptime gives the customer a higher earning capacity, see the next sections.

The benefits of modularisation compound with each design optimisation iteration and with each cycle, you pull away from your competitors, leaving them guessing how you achieve so much with your resources.

How Standardisation Can Help You in Secret

After-sales service is changed in three main ways by modular design:

First, customer reliability goes through the roof. When you standardise modules, your design team doesn’t have to keep developing new ways to solve problems. Instead, they can focus on making things more reliable. Real-world feedback helps designers make better designs, and service engineers learn how to stop common problems before they happen. As a result the products’ up time increases, and that is what matters to customers; they invest in your system to make money with it.

Second, repairs can be planned and done quickly. No more site visits that take a lot of time to figure out how machines are set up. Your service team maintains modules they are familiar with, standard operating methods, and parts that are on stock. This can save you up to 20% on upkeep costs.

Third, the business case for your customer gets a lot better. Standardised machines keep their higher residual values, and modular updates stretch their useful life for a lot less money than buying a new machine. It’s the same as giving your users’ money back.

New sources of income open the door to accelerate growth

This uniform method makes room for new business models, for example:

• Equipment as a service with reliable performance measurements.
• Mid-life upgrades that add the newest technology Programs for certified used equipment
• A variety of leasing and financing choices
• Trade in of older machines, where the most advanced clients invest in state-of-the-art systems and the old machine is resold to clients with a tighter budget and less demanding needs.
• Fixed-price service subscription yields OEMs a stable and fixed income and clients flat operational expenditures and a high uptime of their assets.
• Performance-based bonus clauses in the purchase and service agreements.

For instance, upgrading a machine by replacing one or a few mechatronic modules gives users better features without buying a new machine. This method works exceptionally well in places like the Netherlands and Singapore, where efficient solutions are needed because of rising costs and a shortage of technical staff in all departments.

The Hidden Bonus for the Environment

Growing environmental laws and corporate responsibility are great for modular design:

• Longer product lives thanks to easy upgrades
• Less waste thanks to standardised repair methods
• Better service operations that lowers carbon footprint
• Easier reusing and refurbishing of modules
• Better recycling thanks to standardised materials

This could be you

Remember how our CEO was having a hard time with service issues?

Using flexible product design changed how they did business after the sale. Service sales increased by 40%, engineer productivity increased by 35%, and customer happiness hit all-time highs.

The best thing is that they sleep better at night now. 😃

Are You Ready to Change How You Do Business After the Sale?

Moving from engineering to order to modular design needs a lot of thought and skill. Set up a discovery call to talk about how your company can:

• Look at how your product line could be modularised.
• Make a practical plan for execution
• Figure out the expected return on investment (ROI) for your situation

Learn more about the benefits of modularisation for your business by reading the other articles.

If you’re ready to take this further, get in touch with us right away to set up your discovery call on our contact page.

Making services one of your cash-generating activities starts with Modular5.