Telia Sonera IT/IP Business
Competence Development
Programme
Modularization
16th of Feb 2010
Alex von Yxkull
Agenda
Modular architecture basics
How modular architecture improves profitability
How to introduce a modular architecture
Summary
Agenda
Modular architecture basics
How modular architecture improves profitability
How to introduce a modular architecture
Summary
SERVICES: DEVICES: ACCESSES: CORE and TRANSPORT SERVICE ENABLERS Television Voice calls Fax Company services Voice calls E-mail Internet SMS Internet E-mail Data storage Security Voice calls
Modularity in telecommunications
CUSTOMERS:ORDER & CONFIG. SYSTEM CONF RULES
SERVICES CUSTOMERS
BILLING BILL
TARIFFS & DISCOUNTS SERVICES & USAGE CUSTOMERS
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$ $
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§
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Modularity enables faster and cheaper:
•Upgrade with new services and service variants
•Addition of new accesses and variants
•Common resource utilization
Business strategies
Cost reduction
Market share Price premium
Operational Excellence
• by: Efficient processes and commonality + Productive + Even quality + Low cost - Unflexible - Price pressure
Customer Intimacy
• by: Fast, precise customer adaptations + Faithful customers
+ Many product variants + Market share
- Unstable processes
- High customization costs
Product Leadership
• by: Innovation, fast R&D cycle + Price premium
+ Positive brand image - Development costs
The problem is…
Operational Excellence
Customer Intimacy
Product Leadership
The problem is…
Operational Excellence
Customer Intimacy
Product Leadership
…improving in one direction makes the other two suffer
• Standardized solutions conflicts with customer specific solutions
• Using well proven processes and focusing on even quality slows down development and conflicts with Product
The problem is…
Operational Excellence
Customer Intimacy
Product Leadership
…improving in one direction makes the other two suffer
• A high level of customization increases complexity in the company making the OE suffer.
• The product variance created makes it impossible to also maintain product leadership for all those products
The problem is…
Operational Excellence
Customer Intimacy
Product Leadership
…improving in one direction makes the other two suffer
• To be product leader forces you to focus on a small number of products. This makes the variance offered to the customers decrease
• Product leadership requires a constant development of the product. The frequent
changes is making the OE hard to maintain.
Decoupling by modularity
Operational Excellence
Customer Intimacy
Product Leadership
•
Module: A building block with defined interfaces,
driven by Company specific strategic reasons
Modularity depends on interfaces
•
Interfaces isolate the modules in their strategic circle
Operational Excellence
Customer Intimacy
Definitions
Module: A building block with defined interfaces, driven by Company specific
strategic reasons.
Module Variant: A physical realization of a module.
Module System: A set of modules that through different combinations
generates a range of products that can be efficiently developed, marketed,
produced, and delivered.
Agenda
Modular architecture basics
How modular architecture improves profitability
How to introduce a modular architecture
Summary
Scania
”With a minimum of components we have
achieved the difficult task of having a very
flexible variety of finished products.”
Leif Östling, CEO Scania AB
Scania attributes its profitability to its company wide
adoption of Modular Systems
Scania consistently outperforms other
integrated truck manufacturers
Leif Östling, CEO Scania AB
026 en Source: Scania
DaimlerChrysler
...
MAN
Scania
Iveco
3.0
5.3
3.0
10.1
n/a
Volvo
2.8
EBIT margin
Percent
Update
numbers
Front module Wind shield module
Roof module Door module Back panel module Bumper module
Square panel module
Lower panel module
Click here to configure product
The Cab modular system, modules and variants
Modularity terms:
•
Specified interfaces
•
Commonality
•
Configurability
•
Module
•
Module variant
•
Module system
Effects, Scania truck cabs
Scania
4-series
Parts
100%
22%
Variants
<1000
>50.000
Assembly time
100%
50%
Packing volume
bad
bad
Storing (max)
4 months 10 days
Storing (average)
2 months 5 days
Robotic welding
0%
80%
• VW plans for 19 vehicles based on A-platform
• VW estimates development and investment cost savings of $1.5 billion/yr using common platforms
VW Golf IV
(3+5 door, station wagon, convertible, and Minivan)
VW Bora (Bora sedan, coupe, convertible, and station
wagon)
VW Beetle (New Beetle, New Beetle convertible)
Skoda Octavia (Octavia sedan, and
station wagon)
Audi A3 (3+ 5-door)
Audi TT coupe
Audi TT roadster
Seat Toledo Successor (Toledo, coupe, station wagon,
and convertible)
ESAB Welding Equipment
•
Results:
•
40% reduction of part numbers
•
50% shorter assembly time
•
Lead time reduction from 9 to 1 day
•
50% reduction of suppliers
•
Product variant increase by 50%
•
Time to market of new variant was cut
by 40%
How can a company utilize modular
architectures to improve profitability?
Cost reduction
Revenue increase
OH cost reduction
Tied up capital reduction
DM cost reduction
Cost of non-quality reduction
Lead-time reduction
Mass customization
More frequent launches of new functions/features Quality improvements Performance improvements
Modular
architectures
UpgradesModular architecture KPIs
Key Performance Indicators
Typical values with a modular
product architecture compared to
non-modular designs
Part Number Count, PNC
30 – 90% decrease
Part Number Introduction, PNI
50 – 90% decrease
Number of product variants
Dramatic increase even with less PNC
and PNI
Time To Market (TTM) for new
product variant
50 – 90% decrease
Lead-time from Order to Delivery
OTD
60 - 90% decrease
Inventory level
20 - 70% decrease
Agenda
Modular architecture basics
How modular architecture improves profitability
How to introduce a modular architecture
Summary
Implementation project and
governance phase
Pre-study
phase
Business
Case
Project
proposal
Concept
phase
From market
requirements
to defined
modular
system
Implementation
phase
Implementation
of the modular
system
Industrialisation
phase
Put in production,
launch, market
and sell
Governance
phase
Maintain the
Modular
architecture
Risks and pitfalls
•
The organisation is not prepared for major changes.
•
Market input is incomplete or radically changed.
Agenda
Modular architecture basics
How modular architecture improves profitability
How to introduce a modular architecture
Summary
Summary
Modular design benefits:
•
Less complexity
•
More product variants
•
Improved quality
•
Faster Time-to-Market
•
Architecture becomes
part of the company
strategy
•
Higher profitability
Operational Excellence
Customer
Intimacy
Product Leadership
Agenda
Modular architecture basics
How modular architecture improves profitability
How to introduce a modular architecture
Summary
Waste of resources and long lead-times
•
Projects are driven through pipelines
”Every product manager is racing on his own”
”Project Managers is braking new ground parallel to his/her colleges”
•
Unclear specifications
”The value of customer demands and properties are seldom thoroughly worked through ”
”The technology of tomorrow is driving the future customer demands”
•
Dangerously close to an infarct – to many parallel projects (ca 30 official)
”Difficult to get people working in a structural manner. People are used to putting out
fires”
•
Drowning in documentation
”A billion documents needs to presented at the same time”
•
Bottlenecks
”Everything needs to be passing through Jonas and Ola”
•
Lack of communication and walls (working in herring barrels)
Plattformar och komponenter
ATM ADSL-modem m. POTS-splitter ADSL-modem u. POTS-splitter DSLAM m. POTS-splitter DSLAM u. POTS-splitter Catalyst FLS Redback FLS Streaming Proxy/cache DNS Router WWW-hosting E-mail Ollbox NA(2) Användar-utrustningIA500
AM NA(1) Transmission Integrerad lösning ATM ADSL-modem m. POTS-splitter Cu ADSL-modem u. POTS-splitter DSLAM m. POTS-splitter DSLAM u. POTS-splitter Catalyst FLS Redback FLS Streaming Proxy/cache DNS Router WWW-hosting E-mail Ollbox NA(2) Användar-utrustningIA500
AM NA(1) Transmission Integrerad lösning GAP ?Alex von Yxkull
+46 (0) 736 201 101
Modular Management AB
Kungsgatan 37
11145 Stockholm
Phone: +46 (0)8 456 3500
Website:
http://www.modular.se
