Modularization can surge market flexibility through increased market variance, because the entire approach is built around identifying and understanding both market and customer needs.
Such insights are valuable, as they help determine which features and functionalities a company should provide to create market and customer value, as well as how these are provided through certain product combinations and configurations.
Consequently, modularization is a highly competitive approach due to the inherent ability to swiftly reach various customers with precise offerings, and at the same time reduce value chain complexity.
Modularization is a structured approach to carefully translate market and customer needs into modular product architectures.
These product architectures are characterized by logical structures and standardized interfaces, which limit the total number of product components and allow both streamlined designs and substitution of component variations within product families.
This manner of combining and configuring products and modules subsequently facilitate more commercial variants within a product family, which in turn increases a company’s potential to serve the largest possible part of a market while keeping costs low.
One of the major benefits companies gain from modularization is reduced internal complexity. This reduction is made possible through strategic changes in the supply chain. Due to the use of pre-defined modules and standardized interfaces, modular product architectures enable simplicity in manufacturing setups and production, which can lead to greater levels of automation. Accordingly, the modular approach considers the optimum across the entire value chain.