Fitting together a modular approach

The benefits of modular thinking extend well beyond product strategies, and include new approaches to creating more flexible organisations and improving the management of supply chains and outsourcing. Modularity can also offer a powerful framework for identifying, building and using an organisation´s knowledge assets. All products are composed of functional parts. The architecture of a product consists of, first, the way its design is broken down into functional components and, second, the way these components interact in the product (that is, the component interfaces). An architecture is modular when the interfaces between components are designed to allow mixing and matching of different components, thus enabling many product and process variations to be rapidly configured. Perhaps the most familiar example of a modular product architecture is the desktop computer, in which a range of microprocessors, memory cards, hard disks, monitors, keyboards and other components can be combined in a virtually unlimited number of ways to produce different variations of computer. Another familiar example is Sony´s use of modular architectures to configure more than 250 variations of its Walkman product over a 10-year period. Each product variation offered consumers a new combination of functions, features, performance levels and price points. Sony also used the stream of product variations to test consumer preferences and fine-tune its mix of Walkman models. Companies in other industries are beginning to realise they too can exploit modularity to achieve fast, flexible configuration of their products - while significantly reducing their costs. Markets as diverse as automobiles, personal care products, financial services, food, software, industrial and consumer electronics, bicycles, home appliances and professional services are now adopting modular product architectures.