Jonathan Thatcher, CSCP | July/August 2013 | 23 | 4
The supply chain professional’s role in modular platform systems
Reader C.L. writes, “My organization is moving to modular platform designs for several product families. What changes can I expect in my supply chain role?”
Moving to a modular platform tests an organization’s alignment of strategy to tactics, and it is the job of the supply chain and operations management professional to integrate both. How you and your department communicate challenges and address them early on are important success factors.
A modular system, as defined by the APICS Dictionary, is “a system architecture design in which related tasks are grouped in self-contained packages. Each package, or module, of tasks performs all of the tasks related to a specific function.” Assembly manufacturers, such as automotive makers, tend to use this model as a way to establish a standard design and component set for multiple product families.
There are high expectations for modular designs, including greater productivity, reduced risk and uncertainty, lower costs through higher volumes, and greater customer value at all price points. But modular platform designs rely on some important dependencies, such as accurate forecasting of long-term supply and demand. Predictive analytics can help establish an accurate demand forecast, and supply chain professionals can facilitate the supply forecast. Management might view the modular platform as being created once and immediately flowing with benefits. But the smart professional sees the design created many times with many variations generating many stockkeeping units.
High expectations often clash with reality—the costs to deliver benefits do not disappear even with a modular design platform. Make sure to share your perspective along with potential solutions to stakeholders. One way to illustrate your viewpoint is to identify your areas of inflexibility.
Bend or break?
Modular platform designs typically have fixed requirements in an otherwise flexible design. For example, in automobiles, a modular platform may require that a suspension component be in a specific spot or there be a particular distance between the front axle and the cabin footwell. All stakeholders must cope with these restrictions. However, supply chain professionals also must consider their limits in producing the many versions of a design while meeting expectations.
To determine whether your areas of inflexibility will restrict the success of the project, consider the following questions:
- How much assembly complexity will suppliers and inventory systems deliver in support of the modular platform design?
- Will partners have input on capital spending, long projects, and risks?
- Are partners capable and willing to work with a modular design, especially when they are used to the previous designs? Consider elements such as contracts, quality, volume, delivery, and reverse supply chain.
- Management may be averaging out time and costs across the entire platform design. Which areas require the most time and expense to deliver flexibility?
- Supply chain and operations managers must have precision in numbers of models and product families. How will product family forecasting, sales and operations planning, and employee incentives change to support the modular platform?
The answers will shape the optimal tactics, policies, and practices that produce the different varieties of the design, such as enterprise resources planning system configuration, cycle times, and bills of material. However, the scope of this effort may be less obvious to others in the organization.
Supply chain and operations management professionals know all too well that even the best strategy or design is not the same as a shipped product. Good modular platform designs add value by setting restrictions and, in return, creating flexibility. As the move toward modular platform design progresses, ensure your operations keep up. This is the challenge of follow-through. To a significant extent, how well your organization aligns the strategy of modular designs into successful tactics is in your hands.
Jonathan Thatcher, CSCP, is director of research for the APICS professional development division. He may be contacted at email@example.com.