The Modular Management team of consultants bring to their roles not only expertise but often unique perspectives as a user of modularization in their previous positions. Thomas Enocsson, a recent addition to the Modular Management team, brings with him unique development program expertise and experience from one of the telecom industry giants. In this blog post, Thomas will share some of the key benefits he saw when developing a new modular system supported by the Modular Function Deployment method.
Why We Needed Modularization
If you are managing the development program of a complex product portfolio, you might be faced with some of the same key questions that I grappled with weekly in my former role managing one of the largest development programs in Europe. Such as:
How can I motivate myself and others to continue investing in our key portfolio?
Which products will we phase out, and which products could we continue to grow?
How can we maintain our development speed when staff reductions are imminent?
Why do my team members struggle to reach a consensus on one path forward?
Decisions were often based on assumptions and calculated estimates from key individuals regarding market needs and their technical know-how rather than based on actual data. Faced with the reality of our competition and technology moving at an increasing speed and leaving my organization behind, I knew we had to innovate to remain competitive. But improving this cross-functional process in a large international enterprise is easier said than done. I had to unite thousands of my colleagues in one common voice before we could make the necessary changes to position us as a market leader again.
In 2018 I started a transformation program with Modular Management to improve our organization and how we worked. One of our top priorities with this program was to enhance our ability to make fact-based decisions regarding our portfolio and platform governance. Initially, I believed modularization was a tool to reduce the number of platforms with the benefit of a shorter time to market, but to my surprise, our modularization journey provided much more.
Benefit #1: The Modularization Program Facilitated Communication Between Key Stakeholders in the Business
The modularization transformation program included multiple workstreams. Some core to developing the modular system included market segmentation, module definition, and supply chain study. While others improved our capabilities as a company, such as Governance Model and IT readiness.
Of course, we had many existing assumptions on market needs and how those could be fulfilled with technology. But right from the start, it was clear that these assumptions could be challenged with a structured approach to capturing knowledge and experience from various market units.
However, the real eye-opener was that our partnership with Modular Management helped us communicate in ways that were not our reality previously. In the past, various internal organizations, R&D and Product Management, for example, struggled to come to a consensus on what were the needs of our customer. Now our ability to communicate constructively led to a mutual agreement upon which to base our targets and development roadmaps. We had suddenly found a common language with which to speak and connect. Modular Function Deployment helped us succeed internally by connecting the market needs with the product properties and facilitating a discussion separating the customer needs and the performance parameters.
It sounds obvious as I reflect upon that period in our organization, but the positive change required many stakeholders’ hard work. And once we had a shared and aligned view of who our customers were and what they needed structured in a needs-based segmentation model, we could analyze how to improve and complete our portfolio to fulfill all of these needs with our products. This segmentation model was a great starting point for our product portfolio’s initial modular concept design. To create successful modular systems, it is critical to understand who the customers are and their needs. These are the fundamental drivers of successful modular systems that reduce complexity and embrace varying customer needs and technology developments.
Benefit #2: Structured Product Architecture Data Enabled Us to Make Portfolio Decisions Based on Facts
Connecting stakeholders didn’t stop at the interface between R&D and Product Management but also improved the entire product development flow spanning across R&D, Supply, and Sourcing. By the end of our modulization engagement, we were well on our way to connecting the different stakeholders’ data. The result included the module aggregated into a modular system with product properties configurable to meet market needs. And when we started adding market plans and the corresponding volume, the resulting projections were extremely valuable for the Supply and Sourcing functions. Being able to forecast volumes and the phase-in/phase-out enabled by connecting the different data points across the modular system gave new insights and strategic planning possibilities.
Historically our previous attempts at portfolio and investments analysis throughout the year sometimes became a “rush job” due to our busy schedules. This analysis required a lot of data to be collected and updated and revisiting previous assumptions. Due to the rush, previous decisions were not fully documented, and we lost precious time attempting to remember and recreate previous assumptions only to create new, updated scenarios.
In hindsight, the process delivered accurate enough results, but there was always a feeling that we could make better decisions if we just had some more time. But then reality happened, and other competing priorities demanded our resources.
With the work we did in the modularization program, we could simulate the future product portfolio for several years ahead, including over one hundred different products. We performed cost simulation on different architectural scenarios’ effects on the entire organization from design, sourcing, and production to the aftermarket with quantified complexity cost in relation to dM cost and product performance differences. This simulation facilitated deeper cross-functional understanding and involved individuals from both sourcing and supply much earlier in the platform development process, where typically only product line and design were involved previously.
The data model connected the future product, defined with key performance properties, to all existing and future module variants by system design rules defined in the model itself. This structure gave us immediate estimates on volume forecast per module variant supported with variance optimization, balancing optimization with oversizing to cover the gamut. The dataset used for decisions was comprehensive and easy to maintain when making investment evaluations for the portfolio without reengineering previous datasets like we used to.
Benefit #3: An Organized Modular System
To effectively govern and continuously refine the system while still allowing for delegated responsibilities, the Governance Model workstream established new roles and new ways of working centered around the modules. Module owners were appointed with responsibilities beyond design. For example, Module owners were fully responsible for aligning technology plans with future roadmaps and optimizing the assortment of module variants. As well as to set up and maintain a module variant plan with cross-functional commitment, significantly improving the modular system’s profitability and resilience.
When working with Modular Function Deployment, the data gathered enabled us to connect the many module owners’ data into a structured data set associated with KPIs and market needs. Also, by having a common language, we could rally towards a standard module system where we had the means to translate the various dialects into one decision point.
Summarizing the Difference that Modular Function Deployment Made
The ability to simulate future scenarios based on data from many sources enabled myself and others within my organization to make critical decisions that led to increased portfolio profitability.
Even though the program was still in its infancy when I left, from its onset the opportunities that these new datasets provided were visible and ready for implementation. Together with product leadership and management, we felt confident making strategic portfolio decisions. But the key takeaway was also the ability to connect market needs to the designer level while also driving innovation and profitability for the company portfolio with better portfolio decisions.
The telecom giant Ericsson’s slogan during the 1990s was, "It's about communication between people... the rest is technology". I agree much is about communication and technology, but a proven method and the support of a team that has made this journey before with other customers, such as Modular Management, makes the transformation faster and smoother.
- Thomas Enocsson, a former client, now are part of the Modular Management team.
Want to Know More?
We are always interested to hear your story and discuss how you can improve from where you are, let us be your sounding board. Contact me directly via email or on my LinkedIn if you'd like to discuss the topic covered or be a sounding board in general around modularity and product platforms. Additionally, feel free to contact us with the use of our contact form.
EVP and President Modular Management Asia Pacific AB