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This time in the series of complementary practices to PLM, I am happy to discuss product modularity. In my previous post related to Virtual Events, I mentioned I had finished reading the book “The Modular Way”, written by Björn Eriksson & Daniel Strandhammar, founders of the consulting company Brick Strategy.

The first time I got aware of Brick Strategy was precisely a year ago during the Technia Innovation Forum, the first virtual event I attended since COVID-19. Daniel’s presentation at that event was one of the four highlights that I shared about the conference. See My four picks from PLMIF.

As I wrote in my last post:

Modularity is a popular topic in many board meetings. How often have you heard: “We want to move from Engineering To Order (ETO) to more Configure To Order (CTO)”? Or another related incentive: “We need to be cleverer with our product offering and reduced the number of different parts”.

Next, the company buys a product that supports modularity, and management believes the work has been done. Of course, not. Modularity requires a thoughtful strategy.

I am now happy to have a dialogue with Daniel to learn and understand Brick Strategy’s view on PLM and Modularization. Are these topics connected? Can one live without the other? Stay tuned till the end if you still have questions for a pleasant surprise.

The Modular Way


Daniel, first of all, can you give us some background and intentions of the book “The Modular Way”?

 

Let me start by putting the book in perspective. In today’s globalized business, competition among industrial companies has become increasingly challenging with rapidly evolving technology, quickly changing customer behavior, and accelerated product lifecycles. Many companies struggle with low profitability.

To survive, companies need to master product customizations, launch great products quickly, and be cost-efficient – all at the same time. Modularization is a good solution for industrial companies with ambitions to improve their competitiveness significantly.

The aim of modularization is to create a module system. It is a collection of pre-defined modules with standardized interfaces. From this, you can build products to cater to individual customer needs while keeping costs low. The main difference from traditional product development is that you develop a set of building blocks or modules rather than specific products.

The Modular Way explains the concept of modularization and the ”how-to.” It is a comprehensive and practical guidebook, providing you with inspiration, a framework, and essential details to succeed with your journey. The book is based on our experience and insights from some of the world’s leading companies.

Björn and I have long thought about writing a book to share our combined modularization experience and learnings. Until recently, we have been fully busy supporting our client companies, but the halted activities during the peak of the COVID-19 pandemic gave us the perfect opportunity.

PLM and Modularity


Did you have PLM in mind when writing the book?

 

Yes, definitely. We believe that modularization and a modular way of working make product lifecycle management more efficient. Then we talk foremost about the processes, roles, product structure, decision making etc. Companies often need minor adjustments to their IT systems to support and sustain the new way of working.

Companies benefit the most from modularization when the contents, or foremost the products, are well structured for configuration in streamlined processes.

Many times, this means “thinking ahead” and preparing your products for more configuration and less engineering in the sales process, i.e., go from ETO to CTO.

Modularity for Everybody?

It seems like the modularity concept is prevalent in the Scandinavian countries, with famous examples of Scania, LEGO, IKEA, and Electrolux mentioned in your book. These examples come from different industries. Does it mean that all companies could pursue modularity, or are there some constraints?

We believe that companies designing and manufacturing products fulfilling different customer needs within a defined scope could benefit from modularization. Off-the-shelf content, commonality and reuse increase efficiency. However, the focus, approach and benefits are different among different types of companies.

We have, for example, seen low-volume companies expecting the same benefits as high-volume consumer companies. This is unfortunately not the case.

Companies can improve their ability and reduce the efforts to configure products to individual needs, i.e., customization. And when it comes to cost and efficiency improvements, high-volume companies can reduce product and operational costs.

Image:

Low-volume companies can shorten lead time and increase efficiency in R&D and product maintenance. Project solution companies can shorten the delivery time through reduced engineering efforts.

 

As an example, Electrolux managed to reduce part costs by 20 percent. Half of the reduction came from volume effects and the rest from design for manufacturing and assembly.

All in all, Electrolux has estimated its operating cost savings at approximately SEK 4bn per year with full effect, or around 3.5 percentage points of total costs, compared to doing nothing from 2010–2017. Note: SEK 4 bn is approximate Euro 400 Mio

 

Where to start?

Thanks to your answer, I understand my company will benefit from modularity. To whom should I talk in my company to get started? And if you would recommend an executive sponsor in my company, who would recommend leading this initiative.

Defining a modular system, and implementing a modular way of working, is a business-strategic undertaking. It is complex and has enterprise-wide implications that will affect most parts of the organization. Therefore, your management team needs to be aligned, engaged, and prioritize the initiative.

The implementation requires a cross-functional team to ensure that you do it from a market and value chain perspective. Modularization is not something that your engineering or IT organization can solve on its own.

We recommend that the CTO or CEO owns the initiative as it requires horizontal coordination and agreement.

Modularity and Digital Transformation

 The experiences you are sharing started before digital transformation became a buzzword and practice in many companies. In particular, in the PLM domain, companies are still implementing past practices. Is modularization applicable for the current (coordinated) and for the (connected) future? And if yes, is there a difference?

Modularization means that your products have a uniform design based on common concepts and standardized interfaces. To the market, the end products are unique, and your processes are consistent. Thus, modularization plays a role independently of where you are on the digital transformation journey.

Digital transformation will continue for quite some time. Costs can be driven down even further through digitalization, enabling companies to address the connection of all value chain elements to streamline processes and accelerate speed to market. Digitalization will enhance the customer experience by connecting all relevant parts of the value chain and provide seamless interactions.

Industry 4.0 is an essential part of digitalization, and many companies are planning further investments. However, before considering investing in robotics and digital equipment for the production system, your products need to be well prepared.

image

The more complex products you have, the less efficient and costlier the production is, even with advanced production lines. Applying modularization means that your products have a uniform design based on common concepts and standardized interfaces. To the market, the end products are unique, and your production process is consistent. Thus, modularization increases the value of Industry 4.0. 

Want to learn more?

First of all, I recommend people who are new to modularity to read the book as a starting point as it is written for a broad audience. Now I want to learn more. What can you recommend?

As you say,  we also encourage you to read the book, reflect on it, and adapt the knowledge to your unique situation. We know that it could be challenging to take the next steps, so you are welcome to contact us for advice.

Please visit our website www.brickstrategy.com for more.

For readers of the book, we plan to organize a virtual meeting in May 2021 -the date and time to be confirmed with the audience. Duration approx. 1 hour.
Björn Eriksson and Daniel Strandhammar will answer questions from participants in the meeting. Also, we are curious about your comments/feedback.

To allow time for a proper discussion, we will invite a maximum of 4 guests. Therefore be fast to apply for this virtual meeting by sending an email to tacit@planet.nl or info@brickstrategy.com with your contact details
before May 7th.

I will moderate and record the meeting. We will publish the recording in a short post, allowing everyone to benefit from the discussion. Stay tuned if you are interested, and be fast to apply if you have a question to ask.

What I learned

  • Modularization is a strategy that applies to almost every business and increases the competitiveness of a company.
  • Modularization is not a technical decision to be executed by R&D and Engineering. It requires an effort from all stakeholders in the company. Therefore, it should be led by a CEO or CTO.
  • For future products, modularization is even more important to fulfill one of the promises of Industry 4.0: batch-size 1 (manufacturing a unique product for a single customer with the cost and effort as if it were done in a serial production mode)
  • Although we talk a lot about modularization in PLM implementations, it is a people and processes first activity. Then the PLM infrastructure has to support modularization. Do not buy a PLM system to start modularization. Think first!

Conclusion

Modularization is a popular topic at board meetings as it is easy to explain the business benefits. People in engineering and marketing often miss the time and skills to translate modularization into a framework that aligns all stakeholders. After reading the book “The Modular Way,” you will not have solved this issue. There are many, more academic books related to modularization. With this book, you will be better aware of where to start and how to focus.

There is another interesting virtual event in May: the CIMdata PLM Road Map & PDT Spring 2021conference. The theme:

DISRUPTION—the PLM Professionals’ Exploration of Emerging Technologies that Will Reshape the PLM Value Equation.

I look forward to seeing you at this conference and discuss and learn together the changes we have to make – DISRUPTION or EXTINCTION or EVOLUTION. More on this topic soon.

This Friday, February 26th, we had a PLM Green Global Alliance (PGGA) core team meeting to discuss our current status and next steps for 2021. If you are a PGGA member, you joined us because of the PLM Green Global Alliance LinkedIn group. The LinkedIn group is currently our primary channel for social interaction with the outside world.

Meanwhile, in the background, Rich McFall has been working on structuring the PLM Green Alliance website, which you can find here.

The PLM Green Alliance website is the place where we consolidate information and will experiment with forum discussions. LinkedIn is not the place to serve as an archive for information. Neither is LinkedIn a place for discussion on sensitive topics. Viewpoints on LinkedIn might even damage your current or future career if you have a controversial opinion. More about the forum discussions soon.

The PLM Green Alliance website

Therefore, the PLM Green Alliance website will be the place where interested parties can obtain information and active members can participate in forum discussions.
As a reminder, all our actions are related to PLM and PLM-related technologies – a niche environment bringing PLM-related skills and a Green and Sustainable society together.

Our actions are driven by a personal interest to contribute. With the limited time and means, we are aware of the differences with more prominent and professional organizations addressing a much broader scope and audience.

What makes us unique is the focus on PLM and PLM-related practices/technologies.

The PLM Green Themes

Although the website is still under development, our intentions become visible through the home page header.  I want to zoom in on the area where we are currently focusing, the PLM Green Themes.

We decided on five PLM Green Themes, with each of them having their dedicated moderation and focus. Although the themes can overlap, they will help us to specialize and dive deeper into specific topics.

PLM and Climate Change

You might argue PLM and its related technologies do not directly impact activities related to climate change. However, as the moderators of this theme group, Klaus Brettschneider, and Richard McFall state:

The goal of this PLM Green discussion forum and working group on Climate Change is to promote activities to understand, analyze and reduce human-generated greenhouse gas (GHG) emissions through PLM-enabling technologies. We hope to help to answer the question of what the role and value of PLM technologies is in addressing the most critical challenge facing humankind this century, climate change.

And although there are still individuals with other opinions, the group will focus on the targeted outcome: reducing greenhouse gasses in the atmosphere. What are the types of innovations that make this possible? Find interesting posts here and start contributing.

PLM and Sustainability

This theme will be moderated by me, Jos Voskuil. We are still looking for one or more volunteers to extend our capabilities here.

The topic of sustainability is again broad, as you can read on the Sustainability theme page.
To be more precise, the page states:

Specific topics we wish to discuss further in this forum include how PLM can be used to:

  • Make products and processes more efficient and greener.
  • Understand and measure the impact on the carbon footprint of design decisions and production processes, along with changes to them.
  • Develop, distribute, and use new sources of renewable green energy.
  • Design products and their lifecycles to be sustainable.
  • Recycle, reuse, or repurpose assets, materials, and natural resources.
  • Enhance the resiliency and Sustainability of infrastructures, communities, and economies.

In my early 2021 survey asked participants their viewpoint on PLM and Sustainability. As you can see from the scores, the majority of us are currently observing what is happening.

One of the interesting “other” responses I highlighted here: “I am not sure if you mean real sustainability or just greenwashing.”

Good point. Greenwashing is needed when you know you have something to fix/hide. We are not fixing or hiding; we will discuss and share information and probably dismantle greenwashing attempts.

PLM and Green Energy

Green energy is an important topic on its own as many of the issues related to a green and sustainable society are dealing with the transition from limited fossil energy sources to a sustainable energy model. The moderator of this theme group, Bjorn Fidjeland, is well known for his skills and coaching on PLM in the context of Plant Lifecycle Management through his PLMpartner website.

Of course, we are looking for an additional moderator to support Bjorn, so feel free to contact Bjorn through the website if you can and want to contribute. The theme group objectives are:

…. to share experiences, examples, and best practices in a collaborative mode to promote discussion, learning, and understanding with respect to the mentioned focus areas. We also plan to publish our own “industry heads up” news, articles and case studies illustrating all that is happening in the global race towards “going green” and a low-carbon economy.

PLM and a Circular Economy

As the Circular Economy is itself an innovation, it provides an opportunity to innovate business models and reimagine how we consider something to be a product, a service, or a product as a service. Similarly, a more circular way of thinking requires different expectations when it comes to Information Technology systems, including PLM, that support the enablement of these new business models and the execution of their commercial strategies.

This theme group is currently moderated by a real passionate follower of the Circular Economy, Hannes Lindfred, and also here we are looking to another volunteer.

A year ago, I saw Hannes Lindfred presentation at the TECHNIA PLM Innovation Forum and wrote about his lecture as one of the highlights from the first day.

See my blog post: The Weekend after the PLM Innovation Forum, where I mention his session in the Business drivers for Sustainable Manufacturing paragraph.

The circular economy framework nicely aligns with concepts like “Product as a Service” or Outcome-based services. The original manufacturer becomes responsible for the full lifecycle of their products. A theme group, I expect we can make a lot of progress through sharing.

Accordingly, the main objective within our theme discussion group is to provide a support network for PLM professionals who seek to overcome the legacy linear economy mindset that may be systemic in their jobs, products, employers, or industries. We hope to incite the development and use of road maps for employing both existing and new PLM technologies to implement Circular Economy principles and best practices.

 

PLM and Industry 4.0

A topic that is closely related to PLM is Industry 4.0. At first glance, Industry 4.0 is an initiative to manufacture products smarter, more flexible, more automated, more modular by using new technologies and practices, all with the goal for (initially German) companies to become more competitive.

We are pleased that the PLM and Industry 4.0 theme group’s moderator is Lionel Grealou, quite active in the area of knowledge sharing related to PLM. A second moderator would be more than welcome too for this theme.

Recently Lionel published this interesting article on engineering.com: Exploring the Intersection of PLM and Industry 4.0. In this article, Lionel touches briefly on the potential contribution of Industry 4.0 towards a circular economy, new business models, and waste reduction, thanks to the interaction of PLM and Industry 4.0.  There is a lot to explore, as Lionel states on the theme group introduction page:

This PLM Green theme group’s plan will explore the “intersection” of how PLM strategies and technologies enable the vision of Industry 4.0 for a more sustainable circular economy. In doing so, we plan to investigate the following questions concerning their green value:

  • How do data and product connectivity contribute to feeding smart factories and enhancing the product lifecycle practice?
  • How to improve feedback loops and data integration upstream-downstream of new product development to contribute positively to the circular economy?
  • How to drive downstream waste reduction by improving data traceability and accessibility with better product analytics throughout its lifecycle?
  • How to link more tightly manufacturing planning and execution?
  • How to more robustly connect and integrate engineering, manufacturing, and service/maintenance process operations?
  • How to reduce time to market, with both product development and production cost optimization, integrating co-creation from the design office to the shop floor?
  • How to align the digital and the physical worlds, delivering more customer-centric products enabled by fully horizontally-integrated PLM strategies, taking an ecosystem approach to collaboration, leveraging more agile and continual release processes?
  • How to reduce pre-launch costs and generate downstream manufacturing improvements?

Much more to do.

As you can see, the PLM Green Global Alliance is transforming slowly, as we are not marketing people, web designers, or a sponsored organization. We rely on our networks and your inputs to reach the next level of interaction. The majority of the PLM Themes need a second moderator to keep the workload balanced.

Do you want to contribute?

In the core team meeting, we also discussed improving ways to make the PLM Green Alliance more interactive, shifting and balancing the LinkedIn group’s activities and the persistent PLM Green Alliance website.

Conclusion

As a person, I cannot do big things for our future society; however, I can do small things. And if we all make sure our “small things” are directed to the same outcome, we achieve big things without a revolution. Be part of the active PLM Global Green Alliance with your small things.

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