Redesign, reorganization and, yes, reengineering are the current trends at the venerable giant of American manufacturing, General Motors. Again. GM is embarking on another redevelopment program, intended to reinforce its dominance in automotive circles. It is, in fact, remanufacturing itself into a responsive corporation by reemphasizing a basic concept: Get your suppliers to do the work for you.

GM is implementing "modular manufacturing" at its automotive facilities. What it hopes to accomplish should be tempered by the results of similar programs at other manufacturing companies where the idea has been instituted. Modular assembly has been used at the Volkswagen plant in Brazil for years. It requires suppliers, internal and external, to develop major component assemblies — the modules — at their locations and deliver them, just-in-time, to the final assembly line. A transaxle, an engine with accessories, a front or rear suspension system, these are the common modules. A complete dashboard with instruments, tested and ready to plug into the driver's compartment, might be another module. The car becomes a wheeled version of the computer concept of plug-'n'-play.

Benefits come from less touch labor on the final assembly line since the modules don't require detailed building. Components can be upgraded and updated on a running basis by making changes in single modules. The design team can be distributed among the many subcontractors that create the modules. In effect, each supplier becomes an extension of the overall design/engineering function. This gives the OEM great increases in available talent, albeit not under direct control of the chief engineer. Suppliers get long-term contracts since they are contributing more than just material; they are also an integral part of the OEM development group.

Perhaps the biggest benefits come from those that normally accrue from outsourcing — multiplied 10 to 100 times. A virtual corporation becomes a reality as the far-flung resources of multiple companies converge on the final assembly line to bring their skills to bear on the product. As the TV character said, "It's awesome to see a plan come together."

Unless it doesn't.

Volkswagen is experiencing as much as 30 percent rejection at final quality control, requiring rework that adds to the total cost of production. Incoming inspection, when modules are effectively sealed units, isn't easy, and failures are costly. By pushing the quality and testing functions into the supply chain, the OEM sets itself up for trouble if anything goes wrong. It's the old weakest link paradigm.

But modular manufacturing does work. Sun Microsystems, Dell and Gateway Computers have all found success as assemblers of pre-tested, pre-assembled modules. Of course, the value of the final product is somewhat less; but in many ways, the end user is much fussier.

I'd be interested in hearing from any executives with experience in modular manufacturing. Is there a limit to the type of product that can benefit from this approach? How are you measuring the success or failure of the concept as a whole? How do you get your suppliers involved; or, if you are a supplier to a modular facility, how are you coping with these new rules? Let me know at [email protected]