Modularization as strategy

Modularization – a brief introduction

Modularization is a companywide strategy: a holistic approach that expands across the entire value chain and is often praised for its potential to increase efficiency and competitiveness.

Modular strategies entail targeted adjustments of product ranges, manufacturing processes, and market approaches, which also impacts customer relations due to increased flexibility and thus increased possibilities of product customizations that meet varying customer needs.

As the term ‘modularization’ suggests, modules play an important role in the approach. A module is a product component that is part of a larger modular system – almost like a building block. Modularization pays special attention to the properties of individual modules, and a core principle in modular product development is that the total number of components and spare parts must remain limited. It is the use of such predefined modules that helps reduce internal complexity because the same modules can be combined crosswise and therefore configure different products.

Modularization can increase a company’s competitiveness due to its inherent potential to reach many customer groups quickly and with precise offerings and to achieve market penetration via highly configurable products – all while reducing value chain complexity and maintaining cost effectiveness.

Strategic modularization

The term ‘strategic modularization’ describes:

  • A value-creating concept that frees resources throughout the company’s value chain and creates increased competitiveness.
  • A model of change, which is the cornerstone of a high and competitive level at Industry 4.0

The objective of strategic modularization is to create new opportunities for efficiency in manufacturing companies. As this strategy requires a high level a flexibility and degree of automation, products are designed with modular structures, while manufacturing processes are organized after modular structures.

Strategic modularization requires optimization of processes that control how a company’s market and customers are served, as modularization holds a great potential for increased customer customization through careful configuration and composition of desired modules in a finished product.

Where previous modularization initiatives have primarily focused on product programs and projects, the scope of strategic modularization is holistic: The entire company is optimized to ensure optimum effects.
In summary, the aim of strategic modularization is to redefine product programs and supply chains in order to meet customer needs.

The trifecta of modularization

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