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Husqvarna String Trimmers

Reduces cost of goods sold and time to market to achieve lower price points and maintain market share

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Company Description

The Husqvarna Group is the world's largest producer of outdoor power products including chainsaws, trimmers, lawnmowers and garden tractors. The Group is also the European leader in consumer watering products and one of the world leaders in cutting equipment and diamond tools for the construction and stone industries. The product offering includes products for both consumers and professional users. The Group's products are sold via dealers and retailers in more than 100 countries.

Business Situation

  • Many acquired brands with separate product development and manufacturing facilities
  • Expensive range of components sourced regionally and in high cost countries
  • Wide variation of product volume due to regional weather conditions and seasonal demand

Modularity Results

  • Developed profitable entry-level price point product
  • Freed-up resources to develop more new products
  • Entered new markets with unique product variants
  • Drastically reduced amount of inbound inventory
  • Maintained low Service Call Rate with less effort

Measurable Improvements

  • 25% reduction in manufacturing cost
  • 50% reduction in time to develop new products
  • 50% fewer resources to develop new products
  • Significant increase in EBIT margin
Wärtsilä Medium Speed Engines

Increases Commonality of Components and Offers the World’s Most Efficient of Family of Engines

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Company Description

Wärtsilä is a global leader of power solutions and services to the marine and energy generation markets with net sales of around 5 billion EUR in 2014. Wärtsilä is a publicly traded company with 17 700 employees who operate in nearly 70 countries, with headquarters in Helsinki, Finland. Caterpillar and MAN Diesel are important medium speed engine competitors within the core marine market segments, while Hyundai Heavy Industries competes within the smaller output electricity generating segment.

Business Situation

  • Large family of engines that spans broad range of marine and power generation applications
  • An entire new family was needed to raise the overall fuel efficiency to the new competitive level
  • Concluded that bottom-up component commonality could not support a broad product family

Modularity Results

  • Developed a whole product family simultaneously
  • Drastically reduced overall development time
  • Prototype testing of modules instead of full engines
  • Production readiness achieved drastically sooner
  • Greater number of parallel production activities

Measurable Improvements

  • 45% reduction in development cost
  • 44% reduction in product maintenance cost
  • 43% fewer unique components
  • 40% fewer purchased articles
  • 50% reduction in assembly time
Bosch TT Heat Pumps

Generates Efficiency and Profitability within a Broad Product Portfolio

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Company Description

Bosch Thermotechnology (TT) is a division of the Bosch Group. Together with its subsidiaries, it is a leading supplier of building heating products and hot water solutions with annual revenue of 100M Euros. Bosch TT has strong international and regional brands, and it manufactures a diversified product range in European, American and Asian countries.

Bosch TT Heat Pumps

Business Situation

  • Multiple product technologies and local brands were delivered from a mix of insourced and outsourced product families. A shift in the market to the less profitable, outsourced product family was reducing profitability.
  • Bosch TT developed a new generation of an outsourced product family with a Modular Product Architecture using many fewer components and unique part numbers.

Modularity Results

  • New, performance leading product family introduced
  • 60% fewer part numbers to deliver the family
  • Strategically sourcing modules instead of products
  • Extreme late-point differentiation at installation
  • Modularity of all product lines now 19% - goal is 100%

Measurable Improvements

  • Double digit market share growth
  • 44% lower planned product cost
  • 75% fewer assembly operators
  • 90% reduction in throughput time
  • 55% reduction in production floor space
Whirlpool Microwave Ovens

Saves Factory in High-cost-country by Transforming Their Business Approach

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Company Description

Whirlpool Corporation is the world’s leading manufacturer and marketer of major home appliances, with annual sales of more than 19 billion USD, more than 68 000 employees and 65 manufacturing and technology research centers around the world. Competitors include Sweden-based Electrolux, US-based GE Consumer & Industrial and LG Electronics based in South Korea.

Whirlpool Microwave Ovens

Business Situation

  • Evolved into a high volume, low variation, low price model yielding low profitability
  • Exhausted all cost cutting channels besides moving operations to a low-cost-country
  • Transformed into a mass customization model with high variation, high value, lower volume and higher profitability.

Modularity Results

  • Enabled new approach to the market
  • 200 active product variants
  • Rapid refreshing of models
  • Small production runs per individual order
  • Maintained control of average unit costs

Measurable Improvements

  • One year saved in initial development time
  • Product architecture has lasted 10 years and counting
  • Achieved goals for reduction of total cost
  • Significant reduction in inventory levels
  • Leaner overhead structure
Dynapac Construction Equipment

Boosts Market Share in Emerging Regions with Global Product Platforms.

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Company Description

Part of the Atlas Copco Corporation and one of the world’s foremost manufacturers of compaction and paving equipment for road construction. These complex vehicle systems that are assembled from components from multiple suppliers. Competitors include Bomag (Germany), Ingersoll Rand (Ireland) and Caterpillar (USA).

Dynapac Construction Equipment

Business Situation

  • Single most significant growth opportunity was in developing countries like China and India
  • Equipment needed to be adapted to local construction techniques and practices
  • Struggling to meet price points via independent local divisions and ownership of products

Modularity Results

  • Established central product ownership
  • Increased standard features and options
  • Reduced time to market for local variants
  • Company-wide implementation of technology

Measurable Improvements

  • 6% reduction in direct material cost
  • 30% reduction in total part numbers
  • 15% fewer parts per product
  • 30% reduction in assembly time
Trane Commercial Air Handlers

Regains Product Leadership while Reducing Product costs.

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Company Description

Trane has 8 billion USD annual revenue within the commercial, industrial and residential heating, ventilation and cooling (HVAC) markets. They supply HVAC systems, dehumidifying, air cleaning and building control products along with parts, service and financing.

Trane Commercial Systems

Business Situation

  • Long-term product leader no longer commanded a price premium and was losing market share
  • Current product did not meet market requirements for energy efficiency and overall cost
  • Operational improvements through Lean and process automation alone were not sufficient

Modularity Results

  • Expanded range of product offering
  • Refocused on true customer value
  • Combined two product families
  • Reinvigorated Lean activities
  • Increased impact of automation

Measurable Improvements

  • 58% reduction of part numbers
  • 15% reduction in overall product cost
  • 10% reduction in the cost of operations
  • 7% reduction in direct material costs
  • 50% reduction in development time
Peab Building Construction

Establishes New Standard in the Pre-fab Market with Broad Product Assortment

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Company Description

Peab is one of the largest contractors in Europe’s Nordic region for building and home construction. With annual revenue over 7 billion USD, the company provides construction services, civil engineering services, industrial products and property development.

Peab Construction Company

Business Situation

  • Traditional construction company following design-build process with declining productivity
  • Strong market demand for multiple-occupancy new residential buildings at affordable prices
  • Previous attempts at prefabricated buildings fell short with few features and levels of customization

Modularity Results

  • Designing assortment instead of individual buildings
  • Including enough options and variety for the market
  • More accurate and detailed plans for assembly
  • Implementing industrial process improvements
  • Using industry workers instead of tradespeople

Measurable Improvements

  • 16% overall cost reduction
  • 50% reduction in construction time
  • 50% reduction in onsite indirect costs
  • 50% reduction in building design costs
  • 75% reduction in rework
MTS Test Systems

Finds Capacity Among Current Resources to Address an Evolving Market.

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Company Description

Since 1966, MTS Systems Corporation has produced scientific and technical instruments that support the development of new technologies and products within the automotive, aerospace, construction and biomedical industries. It is a publicly traded company with annual revenue around 450 million USD and 2000 employees.

MTS Systems Corporation

Business Situation

  • Added necessary capacity and efficiency
  • Avoided increase of resources levels
  • Single product family across many applications
  • Improved sales and marketing efficiency
  • Implemented first manufacturing line

Modularity Results

  • Added necessary capacity and efficiency
  • Avoided increase of resources levels
  • Single product family across many applications
  • Improved sales and marketing efficiency
  • Implemented first manufacturing line

Measurable Improvements

  • 90% reduction in total number of parts
  • 35% reduction in customer project costs
  • 70% reduction in lead time
  • 75% reduction of work-in-progress
Guldmann People Lifting Systems

Establishes a Product Foundation for 20 Years of Sustainable Growth.

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Company Description

Guldmann was founded in 1980 with the primary aim of improving the working environment of the social services sector where people need to be moved and handled. It is privately owned and currently employs about 300 people with annual revenue over $70M USD.

Guldmann People Lifting Systems

Business Situation

  • Improving the efficiency of healthcare professionals with engineered system solutions
  • Market leader for ceiling and mobile lifts taking action to ensure long-term viability of the company
  • Large growth opportunity connected with the ability to offer an expanded product assortment

Modularity Results

  • Leveraging a 20-year flexible product platform
  • Developing new product variants each year
  • Applying a new product development process
  • Following clear customer value directives
  • Manufacturing with module production cells

Measurable Improvements

  • Twofold increase in annual revenue
  • Factor of ten reduction in part numbers per product
  • Corresponding reduction in inventory levels
  • Large decrease in overall product lead time
  • Significant cost reduction with volume sourcing