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How a modular system reduces development time and lowers costs

Implement customer requirements with an intelligent modular product structure, reduce costs and drastically reduce product configuration. VDMA reports about an average improvement potential of up to 10% in relation to the overall business result and speaks of potential engineering savings of 15% in plant construction, as well as a drastic reduction in development times.

But how does a modular system that lowers costs and shortens development times work? In our video, you will learn more about the functionality of a modular system and why modular systems can reduce development time and cost.

Competitive dynamics and social change as a driver for product diversity

Ever shorter product life cycles and growing market saturation, as well as societal changes that contribute to an ever-increasing desire for differentiation and individualization, create an increasingly competitive environment. Companies respond to these developments by offering a growing number of product variants.

Product variants can be described by the properties of the product and their corresponding values. One of the features of a fully automatic coffee machine is, for example, the way it is operated - for a premium machine with touch display or, in the simple version, manual operation.

In mechanical and plant engineering, such properties can be the output per hour of a machine, for elevator manufacturers the speed of the elevator car and in the automotive sector the power of the engine.

More product variants lead to more component variants - and increasing complexity

These features and options can be imagined as adjusting screws or control knobs that the customer can turn to configure the desired product. If a customer turns the corresponding control knobs, this has an effect on the required components and often also on the production of these components. In traditional product development in 'copy and paste' mode, in which one product variant after another is developed, the dependencies between the features and the components are very strong.

In the worst case, all components have to be redeveloped when a customer demands a new feature, or even just a new parameter value - and turns the corresponding control knob. The greater the dependencies between the components and the product properties, and the more options the customer has per control knob, the higher the number of component variants required.

without_modularization

It is easy to imagine that the development of such a product is very inflexible, time-consuming and costly. This is especially true when it comes to changes and innovations that you want to offer your customers in the future.

In everyday practice, depending on the industry and product, we often find more than a hundred properties, some of which have a large number of different values.

The modular system - Reduction of component variants by decoupling product properties

The trick in the development of a modular product architecture lies in decoupling the properties and choices available to customers from the components. Regardless of whether you have chosen a function-oriented approach or a product-strategic method for modularization, modular products are characterized by the fact that the components are decoupled by standardized interfaces and the influence of the properties on the components is minimized.

To put it simply: Your customer turns on one control knob and only influences a manageable number of components.

modular-system_with_modularization

What looks so simple actually requires an in-depth analysis of the previous solutions to find the variant drivers of the corresponding components. In addition, the future options for your customers must be determined within the framework of a portfolio analysis and structured into a future portfolio. This prevents a modular concept from being watered down in the future and having to start from scratch again.

Through targeted changes to the design, or even to the technologies used, the components are decoupled and the influence of the product properties on the components is minimized.

The following is an example from a project for a machine and plant manufacturer in the packaging industry, using the component 'Packaging Ejection' as an example. In this case, the 7 choices on the left resulted in a total of 37 variants of the component on the right. The technical reasons for the variants are illustrated in the middle.

Baukastenprinzip_mit_Modularisierung_Beispiel_Maschinenbau

The machine and plant manufacturer has succeeded in reducing the number of component variants from 37 to just 2. At its core, a new technology was chosen and the components decoupled accordingly via standardized interfaces. As a result, there are only 2 variants.

Increase reuse, reduce part variants

component_variant_reductionIt is no secret that you can drastically reduce the number of component variants through a modularization strategy.

The required components can be reduced by 50% on average - despite an increased number of product variants available.

From our experience in modularization projects, we can confirm this rate. The result is an increase in the number of identical parts. The adjacent graphic shows the anonymized results from a project in mechanical and plant engineering.

Another example from the area of cabling/electrics of an aircraft manufacturer impressively demonstrates the potential of a modular product architecture. In aircraft construction, there is traditionally a high proportion of new design solutions for every aircraft variant. This is largely due to the high degree of differentiation desired by the airlines in terms of cabin configuration.

Modular-system_reference_aviation

Before the introduction of a modular product architecture, an average of 55% of the design solutions were newly developed in the area of cabling. After introduction, the share of newly developed design solutions was well below 20%. This is all the more impressive as modularization is particularly challenging in the aviation sector, as it is essential to avoid oversizing to increase weight.

Part variant reduction - A good indicator of cost savings and development time reduction

Calculating the cost-saving effects of modular systems is a great challenge. This applies in particular to companies that are still in their infancy in the area of modularization. A simple indicator of the reduction of direct and indirect costs is the decrease in the total number of component variants required to cover a corresponding product family.

A major factor here is the correlation between of costs and the number of component variants. Both direct and indirect costs increase with the number of components needed to develop a product family.

 

  • Direct costs: These include, for example, lower set-up costs in production, achieved through more identical parts and economies of scale concerning the material costs in purchasing.
  • Indirect costs (complexity costs), such as the entire design and documentation effort or the configuration effort in Sales and Distribution increase proportionally with the number of variant components.

In the table below, you will find 2 examples from our projects.

variant-reduction_modular-system_reference

It is easy to imagine that the reduction in the number of components and the associated increase in the number of identical parts has a positive effect on the development times of new product variants. In our practical example from aviation, the number of new design solutions for new product variants has been reduced to less than 20%.  As a result, the development time was reduced by almost 40%.

Here is another example from the engine specialist MAN. Thanks to a modular system for power generation plants, it was able to reduce its planning times for the construction of the plants by up to 30 percent.

Conclusion: Modular systems - Reduction of development costs and times by reducing the component variants

Modular systems minimize the dependencies between product properties and technical components. Put simply, the effects of individual product configuration on the components is minimized.

This is made possible by decoupling, standardized interfaces and functional independence between components and modules. This procedure leads to a reduction of the required component variants, in practice often to a level of ~50%.

The reduced number of components leads to a reduction of direct and indirect costs that can be achieved across all departments, as well as to a reduction in development times for new product variants.

Find out here how you can develop your own modular system in 5 steps and benefit from the advantages of modularization.

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Product variants are increasing and product life cycles are becoming shorter and shorter. The media is rife with reports on these developments, such as articles published in the Tagesspiegel or PC Magazin, which focus on the increasing pace with which new smartphones and electronic devices are launched. But the speed is also accelerating in mechanical and plant engineering. This is also shown by a study of the Scientific Services of the Bundestag:

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