27/12/2024. Why Modularisation Is More Than Product Design.

When companies in low-volume/high-mix markets consider modularisation, they frequently focus entirely on product design. However, if it is your starting and stopping point, you are setting yourself up for frustration. To succeed, your procedures and organisation must also adhere to modular principles.

Here’s the twist: modularisation affects how your entire company runs, not simply your product range. Let’s look at two game-changing organisational shifts: the emergence of the Product Manager function and a more efficient method for handling customisation.

The Product Manager is a role created to navigate complexity.

Consider your company as an orchestra. Even the best musicians might sound chaotic as a collective without a conductor. The Product Manager is the conductor in your company, ensuring that every component of your modular plan works in tandem.

What makes this position so transformative?

Unifying diverse voices.

The Product Manager is a primary centre for gathering requirements from markets, product users, and internal departments. They don’t just listen; they synthesise the information into a clear, executable vision. Without this job, opposing agendas might drive your organisation in opposite directions, resulting in wasted opportunities and inefficiencies.

Prioritising what matters most.

Customers have diverse needs. The Product Manager assesses each based on its business impact, technological feasibility, and compatibility with the modular portfolio. They make difficult decisions, deciding which demands require immediate attention, which can wait, and which should be respectfully denied. This laser focus ensures that your modular strategy remains sharp and responsive.

Maintaining stability. Amid Change

Freeze and release cycles may sound like technical terms, but they are the key to managing changes without mayhem. The Product Manager enforces these cycles, ensuring that design and production teams have the consistency they require to function well while also allowing for innovation.

Connecting dots across teams.

The Product Manager ensures that everyone in sales, manufacturing, and engineering is on the same page. They bridge gaps, manage issues, and keep initiatives on track. Without them, modularisation risks becoming a patchwork effort rather than a cohesive plan.

Are you curious about scaling modularisation while maintaining strong organisational alignment? Read our post on Scaling Modular Product Design.

Handling Customisation Requests: From Chaos to Clarity.

Picture this: A customer insists on a customisation. This could result in days of back-and-forth email correspondence, cost overruns, and production delays in a typical structure. In a modular organisation, however, the situation is different.

This is how it works.

1. Does it fit the portfolio?

The first step is to review the request. Does it fit with the modular portfolio? If so, great—this is a configure-to-order case. If not, the team decides if Engineering-to-Order (ETO) is worth the effort. This initial examination saves time by rapidly removing impractical demands.

2. What is the impact?

For requests that proceed, the impact on functionality, timeliness, and cost is assessed. What are the consequences of this change? Does it necessitate new engineering? Will it cause a delay in production? This is more than just responding yes or no; it’s about grasping the full scope of the request.

3. Clear communication with the customer.

After the analysis is completed, the customer receives a thorough commercial offer. This covers the increased cost, the effect on delivery schedules, and any changes to product features. Clients enjoy this transparency because it fosters confidence while safeguarding your margins.

4. Execution without surprises.

Only after the consumer approves can the customising procedure proceed. Work orders are meticulously created, ensuring that the change fits easily into your production cycle. What was the result? Customers are happy, and the factory floor is working smoothly.

Don’t let personalisation derail your profits. Discover how to optimise it in our article, The Impact of Modular Product Design on Porter’s Stuck in the Middle Model.

Streamlining Orders: Three Routes, One Goal

In a modular organisation, each order fits nicely into one of three paths. This is more than just efficiency; it’s about developing a system that works for both standardised items and custom solutions.

1. Standard orders.

These are your bread and butter—products that come directly from the production line and require no further engineering. Consider them the ‘off-the-shelf’ solution. These orders flow seamlessly through your system, with minimal intervention from your engineering team, thanks to the use of preconfigured modules.

2. Configure to Order (CTO)

This is where modularisation really shines. Instead of beginning from scratch, your engineering team builds things from standardised building blocks – modules. It’s similar to customising a pizza: the base is already prepared, and you only need to add the toppings. CTO orders strike a balance between customer personalisation and operational efficiency.

3. Engineering to Order (ETO)

ETO orders are reserved for the most unique and difficult demands and include custom designs. However, standardised parts and materials are used whenever practical. This method manages costs and deadlines while meeting unique demands.

What is the perfect mix? 80% of orders should be standard or CTO, with the remaining 20% falling into the ETO category. If your ratios diverge, your modular portfolio needs improvement.

Creating a Resilient and Profitable Organisation

Adopting modularisation is a cultural transition, not just a technological one. It requires that your organisation rethink how it functions at all levels:

• Sales becomes a strategic function, employing configurators to provide customised solutions without requiring engineers.

• Engineering creates reusable modules, allowing for more innovation.

• Standardised manufacturing procedures ensure consistent quality and speedier turnaround times.

Want to learn how sales plays a critical part in this transformation? Read “The Hidden Power of Sales in Modularisation.“

Final Takeaways

Modularisation is more than just a phrase; it is a tried-and-true method for dealing with the complexities of low-volume, high-mix industries.

To succeed, a strong Product Manager is essential for steering the ship and prioritising important tasks.

A clear method for handling customisation requests that combines flexibility and efficiency.

Streamlined order system separates standard and custom pathways while remaining connected.

Are you ready to take the first step towards a more lucrative and effective organisation?

Let’s chat. Visit our contact page to set up a call with the Modular5 team.