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Last week, I have been participating in the biannual NEM network meeting, this time hosted by Vestas in Ringkøbing (Denmark).

NEM (North European Modularization) is a network for industrial companies with a shared passion and drive for modular products and solutions.

NEM’s primary goal is to advance modular strategies by fostering collaboration, motivation, and mutual support among its diverse members.

During this two-day conference, there were approximately 80 attendees from around 15 companies, all with a serious interest and experience in modularity. The conference reminded me of the CIMdata Roadmap/PDT conferences, where most of the time a core group of experts meet to share their experiences and struggles.

The discussions are so much different compared to a generic PLM or software vendor conference where you only hear (marketing) success stories.

 

Modularity

When talking about modularity, many people will have Lego in mind, as with the Lego bricks, you can build all kinds of products without the need for special building blocks. In general, this is the concept of modularity.

With modularity, a company tries to reduce the amount of custom-made designs by dividing a product into modules with strict interfaces. Modularity aims to offer a wider variety of products to the customer – but configure these from a narrower assortment of modules to streamline manufacturing, sourcing and service. Modularity allows managing changes and new functionality within the modules without managing a new product.

From ETO (Engineering To Order) to BTO (Build To Order) or even CTO (Configure to Order) is a statement often heard when companies are investing in a new PLM system. The idea is that with the CTO model, you reduce the engineering costs and risks for new orders.

With modularity, you can address more variants and options without investing in additional engineering efforts.

How the PLM system supports modularity is an often-heard question. How do you manage in the best way options and variants? The main issue here is that modularity is often considered an R&D effort – R&D must build the modular architecture. An R&D-only focus is a common mistake in the field similar to PLM. Both

PLM and Modularity suffer from the framing that it is about R&D and their tools, whereas in reality, PLM and Modularity are strategies concerning all departments in an enterprise, from sales & marketing, engineering, and manufacturing to customer service.

 

PLM and Modularity

In 2021, I discussed the topic of Modularity with Björn Eriksson & Daniel Strandhammar, who had written during the COVID-19 pandemic their easy-to-read book: The Modular Way. In a blog post, PLM and Modularity, I discussed with Daniel the touchpoints with PLM. A little later, we had a Zoom discussion with Bjorn and Daniel, together with some of the readers of the book. You can find the info still here: The Modular Way – a follow-up discussion.

What was clear to me at that time is that, in particular, Sweden is a leading country when it comes to Modularity. Companies like Scania, Electrolux are known for their product modularity.

For me it was great to learn the Vestas modularization journey. For sure the Scandinavian region sets the tone. And in addition, there are LEGO and IKEA, also famous Scandinavian companies, but with other modularity concepts.

The exciting part of the conference was that all the significant modularity players were present. Hosted by Vestas and with a keynote speech from Leif Östling, a former CEO of Scania, all the ingredients were there for an excellent conference.

 

The NEM network

The conference started with Christian Eskildsen, CEO of the NEM organization, who has a long history of leading modularity at Electrolux. The NEM is not only a facilitator for modularity. They also conduct training, certification sessions, and coaching on various levels, as shown below.

Christian mentioned that there are around 400 followers on the NEM LinkedIn group. I can recommend this LinkedIn group as the group shares their activities here.

At this moment, you can find here the results of Workstream 7 –  The Cost of Complexity.

Peter Greiner, NEM member, presented the details of this result during the conference on day 2. The conclusion of the workstream team was a preliminary estimate suggesting a minimum cost reduction of 2-5% in terms of the Cost Of Goods Sold (COGS) on top of traditional modularization savings. These estimates are based on real-world cases.

Understanding that the benefits are related to the COGS with a high contribution of the actual material costs, a 2 – 5 % range is significant. There is the intention to dig deeper into this topic.

Besides these workstreams, there are also other workstreams running or finished. The ones that interest me in the sustainability context are Workstream 1 Modular & Circular and Workstream 10 Modular PLM (Digital Thread).

The NEM network has an active group of members, making it an exciting network to follow and contribute as modularity is part of a sustainable future. More on this statement later.

Vestas

The main part of day one was organized by our host, Vestas. Jens Demtröder, Chief Engineer at Vestas for the Modular Turbine Architecture and NEM board member, first introduced the business scope, complexity, and later the future challenges that Vestas is dealing with.

First, wind energy is the best cost-competitive source for a green energy system, as the image shows when taking the full environmental impact into the equation. As the image below shows

From the outside, wind turbines all look the same; perhaps a difference between on-shore and off-shore? No way! There is a substantial evolution in the size and control of the wind turbine, and even more importantly, as the image shows, each country has its own regulations to certify a wind turbine. Vestas has to comply with 80+ different local regulations, and for that reason, modularity is vital to manage all the different demands efficiently.

A big challenge for the future will be the transport and installation of wind turbines.

The components become so big that they need to be assembled on-site, requiring new constraints on the structure to be solved.

As the image to the left, rotor sizes up to 250 m are expected and what about the transport of the nacelle itself?

Click on this link to get an impression.

The audience also participated in a (windy) walk through the manufacturing site to get an impression of the processes & components – an impression below.

Processes, organization and governance

Karl Axel Petursson, Senior Specialist in Architecture and Roadmap, gave insights into the processes, organization and governance needed for the modularity approach at Vestas.

The modularization efforts are always a balance between strategy and execution, where often execution wins. The focus on execution is a claim that I recognize when discussing modularity with the companies I am coaching.

Vestas also created an organization related to the functions it provides, being a follower of Conway’s law, as the image below shows:

With modularity, you will also realize that the modular architecture must rely on stable interfaces between the modules based on clear market needs.

Besides an organizational structure, often more and more a matrix organization, there are also additional roles to set up and maintain a modular approach. As the image below indicates, to integrate all the functions, there are various roles in Vestas, some specialized and some more holistic:

These roles are crucial when implementing and maintaining modularity in your organization. It is not just the job of a clever R&D team.

Just a clever R&D is a misconception I have often discovered in the field. Buying one or more tools that support modularity and then let brilliant engineers do the work. And this is a challenge. Engineers often do not like to be constrained by modular constraints when designing a new capability or feature.

For this reason Vestas has established an Organization Change Management initiative called Modular Minds to make engineers flourish in the organization.

Modular Minds

Madhuri Srinivasan Systems Engineering specialist and  Hanh Le  Business Transformation leader both at Vestas, presented their approach to the 2020 must-win battle for Modularisation, aiming with various means, like blogs, podcasts, etc., to educate the organization and create Modular Minds for all Vestas employees.

 

The team is applying the ADKAR model from Prosci to support this change. As you can see from the (clickable) image to the left, ADKAR is the abbreviation of Awareness, Desire, Knowledge, Ability and Reinforcement.

The ADKAR model focuses on driving change at the individual level and achieving organizational results. It is great to see such an approach applied to Modularity, and it would also be valuable in the domain of PLM, as I discussed with Share PLM in my network.

Scania

The 1 ½ hour keynote speech from Leif Östling supported by Karl-Johan Linghede was more of an interactive discussion with the audience than a speech. Leif took us to the origins of Scania, their collaboration in the beginning with learning the Toyota Way. – customer first, respect for people and focus on quality. And initial research and development together with Modular Management resulting in the MFD-methodology.

It led to the understanding that:

• The #1 cost driver is the amount of parts you need to manage,
• The #2 crucial point is to have standardized interfaces and keep the flexibility inside the module

With Ericsson, Scania yearly on partnered to work on the connected vehicle. If you are my age, you will remember connectivity at that time was not easy. The connected vehicle was the first step of what we now would call a digital twin

An interesting topic discussed was that Scania has approximately 25 interfaces at Change Level 1. This is a C-level/Executive discussion to approve potential interface changes. This level shows the commitment of the organization to keep modularity operational.

Another benefit mentioned was that the move to electrification of the vehicle was not such a significant change as in many automotive companies. Thanks to the modular structure and the well-defined interfaces, creating an electric truck was not a complete change of the truck design.

The session with Leif and Karl-Johan could have easily taken longer, giving the interesting question-and-answer dialogue with the curious audience. It was a great learning moment.

 

Digitization, Sustainability & Modularization

As a PLM person from the PLM Green Global Alliance, I was allowed to give a speech about the winning combination of Digitization, Sustainability and Modularization. You might have seen my PLM and Sustainability blog post recently; now, a zoom-in on the circular economy and modularity is included.

In this conference, I also focused on Modularity, when implemented based on model-based and data-driven approaches, which is a crucial component of the circular economy (image below) and the lifecycle analysis per module when defined as model-based (Digital Twin).

My entire presentation on SlideShare: Digitization, Sustainability & Modularization.

Conclusion

It was the first time I attended a conference focused on modularity purely, and I realized we are all fighting the same battle. Like the fact that PLM is a strategy and not an engineering system, modularity faces the same challenge. It is a strategy and not an R&D mission. It would be great to see modularity becoming a part of PLM conferences or Circular Economy events as there is so much to learn from each other – and we need them all.

 

Are you interested in the future of PLM and the meaning of Digital Threads.?

Click on the image to see the agenda and join us for 2 days of discussion & learning.