Page 308 - Operations Strategy

THE sTRATEgiC imPoRTAnCE oF PRoduCT And sERviCE dEvEloPmEnT 283
Modularity – is a strategy for organising complex products (and services) and processes
efficiently. A modular system is composed of units (or modules) that are designed inde-
pendently but still function as an integrated whole. So, rather than designing a prod-
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uct and service as a totally integrated and indivisible whole, the design is divided into
modules that can be put together in various ways. Putting different modules together
will result in products or services with different functionality. Yet because the modules
themselves are standardised, they can be produced in a standardised low-cost manner.
The most obvious examples of modular design are in the computer industry, where
relatively complex products can be built up using smaller subsystems. Customers who
have different requirements can simply choose which modules they require within
the overall product. Provided the overall architecture of the design (the way modules
fit together and the functions they perform) and the interfaces between the modules
allow for easy connection and communication, then modularity can offer considerable
advantages. For example, innovative ideas can be tried out in one module without it
necessarily interfering with the design of the product or service as a whole. So, suppose
a medical centre offers a range of different health check-up services. If it designs its
processes and systems to separate its different clinical procedures, it could introduce
new tests in one area while leaving the others undisturbed. Of course, it would have to
ensure that the interfaces between the improved test area and the other parts of its ser-
vices processes (records, diagnostics, follow-up appointments and so on) could handle
any new information generated.

Mass customisation – is the ability to provide customers with high levels of variety and
customisation through flexible and responsive processes and flexible product and ser-
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vice designs. The vision of mass customisation is to reduce radically the effect of the
assumed trade-off between variety and cost. Some authorities see it as an inevitable
successor to mass production, while others argue that there is little essentially new in
the idea, rather it pushes existing ideas such as flexibility and agility to their logical
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conclusion. The mass-customisation concept includes the ideas that, as far as market
requirements are concerned, markets are becoming increasingly fragmented, while as
far as operations resources are concerned, new forms of organisation and technology
are allowing greater degrees of flexibility and responsiveness. Thus, it is possible to
‘mass produce’ a basic family of products or services that can still be customised to the
needs of individual customers. The major management task, therefore, is to understand
the implications of market and operations developments and harness them by embrac-
ing an attitude that stresses sensitivity to customers’ individual needs and a willingness
to supply them with customised offerings. This means changes in the way the opera-
tion produces its products and services and the way it markets them. But, of particular
relevance here, it also implies a different approach to designing products and services.
Predominantly, this involves the standardisation and modularisation of components
(see above) to increase variety while reducing production costs.
One much-quoted example of how modular design contributed to mass customisa-
tion is the way Black and Decker, the hand-tool manufacturer, produced a wide range
of well over 100 basic hand tools, each with their own variants, from a relatively small
set of modular and standardised components. The first consequence of this modular
approach was more effective and efficient design:
‘Much of the work in design and tooling was eliminated because of the standardisation of
motors, bearings, switches, . . . etc. New designs could be developed using components already

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