50% increase in variants, lead-times cut from 8 days to 1
The client
ESAB is a world leader in welding consumables and equipment. With annual sales of more than USD 1 billion, the company has thousands of employees worldwide.
The challenge
Due to a wide range of customer requirments and a multitude of viable technologies, ESAB’s market was highly fragmented. Even though there was a desire to add new customer applications and expand into new regions, the increased complexity was felt to be prohibitive.
The solution
It was decided to use a modular approach to increase variants, while at the same time reduce complexity and lead-times. A pilot project – developing a product platform for inverter-based welding – proved so successful that management decided to implement modularity in all functions from design and development, to sales and marketing.
A business-case model was used to establish a business plan for each platform in order to manage investments, follow-up, control and profitability over time. Platform managers were appointed to run their respective projects and monitor profits.
The results
“The unique tools offered by Modular Management have given us the ability to finally cut through this complexity and take advantage of our size and global presence with modular product platforms,” says Mart Tiismann Vice President. “We are now realizing economies of scale in development, manufacturing and sourcing, while being more responsive to individual customer requirements than ever before.”
The numbers speak for themselves:
- product variants were increased by 50%
- time-to-market was cut by 40%
- production lead-times were decreased from 8 days to 1 day
- assembly time cut by 50%
- part number count decreased by 40%
- the number of suppliers reduced by 50%
To find out more about the benefits ESAB gained from modularity and how Modular Management helped implement a new product architecture, download the ESAB case story (pdf 108 kB)