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How to implement modular systems in 5 steps

According to a study by the VDMA, modular systems are widely applied in organizations and are already used by 88% of respondents. The goals are to reduce development time and development costs while offering your customers more product options than before. 

In our video, you will learn how to quickly develop a modular system for your organization in 5 steps.

Read here how to quickly develop your modular system in 5 steps.


1. Defining common goals and intentions - easier in theory than in practice

The goals and a common vision of the modularization strategy are decisive to develop a modularization system that is actually put into effect by your organization.  The one right method that will help you and your organization develop a modular system overnight? There is no such thing.

It is therefore all the more important to start by defining your individual targets together with all stakeholders and then consistently align your approach to the defined targets. Since the development of a modular product architecture affects many disciplines and people with different perspectives - making it impossible talk to all stakeholders in the first step - a pilot group is useful.

The pilot group represents a relevant cross-section of your organization and supports you not only in defining your intentions, but also in answering the question of what implications the goals and procedures have for the entire organization. Once the intention, goals and implications have been jointly defined, they can be communicated via e-learning in your organization.

There are many who claim that a large number of projects fail from the very beginning due to a lack of common intention. Although modular systems are already used by a large number of organizations, many companies do not exploit their full potential. The reasons for this are often to be found in employees' stonewalling the new approach, making it difficult to anchor the new system in the organization.

2. No efficient modular design without knowing the future portfolio

A strategic portfolio analysis of your future products is the prerequisite for the efficient development of a modular product architecture. For example, no effort should be wasted in standardizing product components that will no longer be in demand on the market tomorrow.

A success factor for the successful development of modular products is therefore the identification of "exotic species" and special solutions that will not be the focus of subsequent modular development.

When deciding later on how many variants of a certain component must be developed in your modular system, the feedback on anticipated quantities of your future products is extremely important. Alongside the quantities, turnover and margins of the corresponding product variants are later a decisive criterion for the selection of the 'right' components in your modular system.

The crucial challenge is the outlook into the future, which is always fraught with uncertainty. However, taking this uncertainty into account early on can be turned into an advantage.  If there are areas with a particularly high level of uncertainty, you can decouple corresponding components in the module cut by using interfaces.

This ensures that the effects of uncertainty only affect parts of your products and that you do not have to redevelop the entire system in the worst case.

In practice, a detailed portfolio analysis has also proven to be a central communication tool between development and the sales & marketing department.

3. The module cut ensures that you can achieve your goals

In the 3rd step, your product is divided - in the truest sense of the word - into modules by means of the module cut. By analyzing the interdependencies of your components, we define which components can be combined into modules. This step is specifically designed to help you achieve your goals.

For example, components that are particularly affected by the different customer wishes are combined into a module and then decoupled by standardized interfaces. This allows you to reduce development time and react flexibly and quickly to different customer requirements without having to reinvent the wheel each time.

Depending on the target and your intention, different methods are used here. Depending on the method and specific application, we can, for example, consider technical, functional or product-strategic interactions of the components. In practice, it often makes sense to continue to adapt a method, even after selection, to best suit the application in your company.

The module cut also gives us a framework in which we then optimize the component variants for the modular system.

4. Developing the modular system with optimized variants

After you have divided your product into modules, you need to find out how many variants of the individual modules you need in order to fulfill the customer requirements determined in the portfolio analysis as efficiently as possible by using a modular system.

To do this, you analyze the internal technical diversity within the modules in the form of components and understand the dependency of customer requirements, i.e. the product properties that your customer differentiates. Building on this, a concept must be developed to decouple these dependencies and thus enable the development of a modular product family.

In this case, decoupling means that if your customer changes an option of your product, most of the components can still be reused. It is important that components that are perceived as differentiating by your customers are not standardized under any circumstances.

When developing the concept, you should pay particular attention to the sales figures determined in the portfolio analysis, the sales volume and the margin of the individual variants. If you consider future uncertainties or requirements, such as new technologies, right from the start when optimizing variants, your modular product architecture will be resilient against future changes.

To assess how good the concepts are, measure yourself against the goals defined at the outset: How much development costs can actually be saved, how quickly can new product variants be configured and how flexible is your product development in detail? This evaluation allows you to select the right concepts and combine them as required.

5. The challenge - Enabling your organization to develop modular systems in a sustainable fashion

Developing modular systems is one thing. An almost equal challenge is to establish the modular system in your organization in the long term. This is because modular development has a fundamentally different approach compared to conventional product development.

But how can you now determine whether your organization and its current processes are suitable for independently developing modular systems in the future and keeping them alive in the long term? Practical experience shows that it is good practice to observe interactions within the organization during the previous steps of the modularization project and to discuss them with your pilot group.

This is the only way to get a realistic picture and to know where your organization and processes should be meaningfully adapted. It is particularly important that you take into account the specifics of your organization and do not simply adopt procedures that may have been successful in other organizations.

Conclusion: In 5 steps from the common intention to a modular system that is put into practice by your organization.

To ensure that your modular system is developed quickly, allowing you to reap its benefit as soon as possible, you must define a common vision that fits your company and is supported by your employees.

Make deliberate use of the portfolio analysis as a means of communication and roadmap for the product variants of your modular system. Products based on a modular design are particularly efficient when the defined targets are reflected by the module cut.

If you really want to develop your modular system in a variant-optimized way, it is essential to take into account the parameters for quantities, sales and margins you have determined in the portfolio analysis when designing your modules. Components that are differentiated by your customer may under no circumstances be standardized in the variant-optimized development of the modular system.

If you select an approach that is tailored to the needs of your organization and employees during development, you have taken the first steps towards successful development of a modular system.

In the long haul, however, your modular system will only be successful if your organization internalizes the basic principles of modular development while implementing the new system and anchors them into the organization for the long term.

In order to inform the involved employees about the topic and to understand the methods in their entirety, modularization workshops are the right choice. But there are many pitfalls that need to be kept in mind before the wrong people are sent to a workshop that is useless to your business and will not have a lasting effect. Find out more about the pitfalls and what to look for in workshops.

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