How Modularity Reduces Cost and Increases Quality in Electronics Production

By Charlotte Erlandson

If I say modular product development, what kind of product comes first to your mind? It's probably a car or a machine of some sort. Our own first examples to explain modularity to beginners often include Lego since it is well known across the globe, and most people understand the great benefits of the standardized interface that each bit adheres to.

The MFD (Modular Function Deployment) method can be applied to electronic products, with its corresponding benefits of defining modules, interfaces, and module strategies. In this blog post, I will explain some benefits of implementing modulization with electronics production.

In general, the products we use daily tend to contain more and more electronics. The development pace of this technology area is fast, which puts requirements on companies to reduce time-to-market. The more complex the products become, the more advanced the verification and testing needs to be. Combined with varying customer requirements, this provides a challenge not only for the R&D department but also for the Operations organization.

An electronics supply chain can benefit significantly from modularization, even if not all modules are physically separated. Reducing complexity, reusing components, and implementing module strategies have an advantageous impact on your supply chain strategy. For electronics, just as for other technologies, it is fundamentally true that product complexity leads to increased process complexity. But, by understanding some key fundamental mechanisms, the process complexity can be reduced.

Four Benefits of Modularity in Electronics Production

Many organizations are hyper-focusing on the direct costs of electronics while not paying enough attention to the indirect production costs for equipment and rework. These costs can be significantly reduced by considering requirements from production, and by applying a platform approach rather than a product-by-product approach.

Typical indirect costs in electronics production

Typical indirect costs in electronics production


Assembly Equipment Cost

At first glance, surface-mount technology (SMT) seems adept at handling complexity. Adding an additional component is a minor change to the program and an extra component feeder. But when this happens multiply times, feeders and other hardware may increase rapidly. Depending on your volumes, a small change of the assembly program might be significant in relation to the actual assembly time of your batch. If we also need to change the setup, then rather large volumes are necessary for the preparation and assembly time to match.

A typical outcome of a modularization program is a 40-60% reduction of part numbers.

Test Equipment Cost

Another challenge for electronics production is complex testing. As products and systems of products increasingly become more complex, so does their testing. In an earlier article, you can read about the importance of correctly defined and governed interfaces in electronics and PCB modularization. This importance applies to the product’s interfaces and production and test equipment interfaces. If each product development project is free to define its testing interfaces, you quickly end up with one test fixture per product. Not because that connector needs to be placed in a slightly different place on each PCBA but because different teams created the designs at different times.

With the increased importance of testing, it is expected that the value of the test equipment corresponds to a large part of your equipment investment. 

If you run a low volume-high mix type of production, with short to medium product life cycles, the test equipment is also expected to be scrapped when the product reaches end-of-life. Even if the test equipment is still functioning, it can’t be repurposed for the next generation of products.

Companies with long-time spare parts commitments can even end up with issues storing all legacy test equipment, that may be needed one day. Spending precious floor space on rarely used machines is usually not efficient or safe for business.


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Production Equipment Cost

A similar reasoning used for test equipment can be applied to production equipment. The number of production lines can often be reduced with well-defined interfaces and a cross-functional, holistic approach to product development. This optimization will significantly improve the automation and digitalization efforts that most organizations prioritize today, not to mention that modularity enables Well-defined interfaces and generic production setups allow significantly increased production flexibility in the factory. And it may even be possible to implement these improvements across production sites.

Rework reduction through yield improvements 

Yield of new products.pngWhen a newly designed, complex electronics product is introduced in production, the yield is often low, requiring skilled resources and time for fixes. With frequent new introductions, you may even need to invest in additional test equipment to meet the demands of repeated retesting.

With more commonality and reuse in the design, developments are isolated within interfaces. Companies benefit from an already stable design and debugged equipment across parts of the product, even when releasing new products. The result is a reduced yield drop with new introductions. This approach is familiar, but many companies still have a ways to go in successfully maintaining their modular platforms over time. Implementing modularity is not only a product development project but a change journey for the entire organization.

Yield drop reduction with stable modular platforms

Yield drop reduction with stable modular platforms. The benefits accumulate the longer the platform lives.


How to Implement Production-friendly PCB and Electronics Modularity

More than a “box of Legos,” modularity has many applications, including electronics products. Different layers of modularity can be identified within electronics, from logical modules with benefits across product development and engineering to physical modules with benefits throughout the value chain. To enable stable modular electronics platforms over time, the modules must be defined based on functions, defined interfaces, and company strategy.

A cross-functional approach is of great importance. It is key to understanding the complexity drivers throughout the value chain to design a production-friendly modular platform.


As mentioned above, modular electronics can provide significant production benefits. Even if all modules are never manufactured as physical objects, reusing logical modules, designs, and components and preserving defined interfaces is a huge benefit for production.

Want to Know More? 

If you want to know more about the specific topics mentioned in the article? We would love to discuss with you how to implement modularity for your electronics production. Please reach out via email to take the first steps to reducing cost and increasing quality for your organization.


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Charlotte Erlandson

Senior Consultant