You create successful products tailormade to what your customers want. This tactic used to be very profitable, but pressure on price, margins, and delivery times make the game increasingly difficult.
Many companies serve their customers by adapting their products to various customer needs with an Engineering-to-Order approach, leading to high costs, long delivery times, and ‘first-time’ quality issues. In this ‘low sale volume – high engineering complexity’ playing field, the engineering effort and related resources are typically in the critical path, limiting sales growth.
The customization is appreciated by customers, although the mentioned drawbacks are not welcomed. To mitigate those drawbacks, companies make their products modular. With a modular product, they can configure the product to meet the customer’s needs. One of the main drivers for going modular and creating modular products is to be able to deal with the requirements variance. Going modular is a brilliant step to meet varying customer needs and simultaneously deliver quality products quickly and efficiently. However, it is not the only step.
Figure 1: 8 The Modular V ModelIPL. The vertical size expresses the relative amount of variance.