Sidel

Sidel are recognized for their innovation, size, complexity, and high-precision engineering. Constructed using premium materials, these systems require substantial and costly spare parts. They operate at high speeds and maintain stringent tolerances.

By 2010, the company’s commitment to customized, order-engineered products led to a significant degree of customization in production. Remarkably, one in every three products featured some form of new design or innovative feature.

Key Challenges Before Modularization

In 2010, Sidel was struggling with a complex assortment and high costs for order engineering. Since the company sells both complete lines and individual subsystems, a relatively high degree of product complexity and order engineering can be expected. Yet the situation was made worse by a Sales culture of saying ‘yes’ to all market requests for customization, and this was more than a question of culture. The market needed more configurable solutions. 

While Sales was saying yes, Engineering and Supply were having a hard time delivering what was sold and the competition was heating up. Margins were under pressure, not least as the competition ate into the most lucrative customer segments, geographies and solutions. 

In the face of increasing complexity and aggressive competition, Sidel CEO Mart Tiismann decided to invest in a modular product architecture program.

Modularization Journey

In ‘The Discipline of Market Leaders,’ Treacy and Wiersema present three value disciplines: Operational Excellence, Customer Intimacy and Product Leadership. This is the transformation model Mart Tiismann focused on together with Modular Management’s Alex von Yxkull and Alex Ginsburg.

Both challenges and targets for the Sidel modularization program were structured according to the value discipline model to reduce costs and increase market share and price premiums.

Sidel’s business challenges were analyzed and summarized as reasons the company wanted to initiate a modularization program. Each challenge was allocated to a specific value discipline:

“As CEO of Sidel, I learnt that it’s possible to transform a business by connecting products, customers and organizations. Modular product architecture and information management tools made it possible.”

 - Mart Tiismann, Former CEO of Sidel Group

Product Leadership Focus

• Need to focus more on innovation – and less on redesigning parts – to regain market leadership.
• Cross–fertilization and use of innovation partners will demand a modular product architecture and defined interfaces.
• A solution range based on derivates of a standardized base model will leave too many holes and unpredictable complexity costs.

Customer Intimacy Focus

• Standardization of the product offering needs to be improved.
• Order engineering needs to be faster and cheaper.

Operational Excellence Focus

• Too many parts and too many suppliers make systematic improvement impossible.
• Unstable designs make a truly global supply chain impossible.
• Complexity costs are much higher than understood.

Reduce Complexity and Improve Technology Leadership

Goals for the architecture development program were set according to the same value framework as the challenges:

Product Leadership Focus

• Improve technology leadership
• Reduce time to market
• Improve performance, primarily speed of new product introduction and improved total cost of ownership.

Operational Excellence

• Reduce lead times
• Reduce complexity costs through fewer parts needed
• Enable the splitting of design, sourcing and assembly across different geographical locations
• Enable increased reuse and reduce customer–specific engineering
• Improve quality

Customer Intimacy

• Enlarge the product offering
• Better serving the increasing variety of customer requirements
• Enable the development of services.

Program Scope

The scope of the modularity program was Fillers, Blowers, Conveyors and Labelers and focused on:

Customer Intimacy

• Need for market-driven variance and development
• Complete line configurations, harmonization and balancing of performance
• Equipment internal modularization and compliance to complete line interfaces
• Additional focus on control systems (complete line and equipment)
• Process and information management for maintaining modular products
• Process and information management for configure-to-order.

Program Results

Product Configurations

Sidel’s new modular product architecture included the building blocks, or module variants, needed for a better and bigger product assortment. Product–specific results included:

• More solutions on offer, including triple the number of blower products
• More options available on more products, thanks to standardized interfaces
• Aligned product ranges, with specifications defined at complete line level
• Three conveyor ranges were moved to one architecture, leading to better performance and a higher degree of configurability – without increasing complexity – and 30% fewer new part numbers.

Business Results

The results were remarkable as a result of the modularity transformation:

• 60% of solutions sold were now configure to order – up from 33%
• 40% reduction in part numbers
• 50% fewer new part introductions
• 10% in reduced cost
• >300% in product assortment configurations
• 30% reduction in total cost of ownership
• 50% shorter order to delivery lead time
• 30% shorter time to market
• 80% reduction of engineer to order hours.

Learn More

We have over 25 years of experience serving clients across the globe, mastering product complexity, and accelerating business performance. Our unique expertise, methods, and tools in strategic product
architecture and modularity enable our success. While our proven methods and tools have been continuously developed and refined to ensure maximum efficiency and quality in execution. To learn more, visit our contact page.