Operational excellence delivers cost reduction and value leadership by automating manufacturing processes and streamlining work procedures.
This strategy relies on high volume and standardization – ideal for markets where customers value price over choice. Leaders in operational excellence include Wal-Mart, IKEA, FedEx and McDonald’s. They’re strongly centralized and have a standardized, rule-based operation.
But what if your organization doesn’t fall into this category? How can your product development strategy deliver operational excellence while still meeting customer demands?
Modular Management supports you
Uncover hidden costs
In the product design and manufacturing process, the focus is usually on reducing material cost. Very little attention is paid to the price of creating and maintaining the parts used to build the product. We refer to this as the cost of complexity.
The same goes for service-producing operations. Huge complexity costs are incurred when there’s a quick increase of unique services to meet the needs of each user. In both scenarios, the organization will often not have the tools to put a price tag on that complexity.
Modular Management’s ValueMap™ process helps your company understand these costs. We incorporate the information into your product or service development process so it will be geared towards reducing total costs rather than material costs.
Step up your supply chain
Once you have a modular product design, a number of opportunities in design and manufacturing arise. For example, you could achieve flexibility and efficiency by producing certain modules close to market and others in centers of excellence. Or increase throughput and achieve higher assembly efficiency by specializing assembly operations in module production cells. You could also reduce takt time on the assembly line as assembly steps become coherent.
Modular Management’s Supply Chain Study process can help you unlock these opportunities. We’ll help you identify how to redesign your supply chain to get a, flexible manufacturing system. Modular product design is also a platform for supply chain optimization.