3 Lab – Modular Design and

Cost Modeling
Value Chain and Business Ecosystem Management

Prof. Luiz F. M. Vieira

3 Lab--- Modular Design and
Cost Modelling

Value Chain and Business

Ecosystem Management

Prof. Luiz F. M. Vieira

 Agenda

▪ Modular Design

▪ Cost Modelling

▪ Project “Make” – Miniature Car Design

3 Lab--- Modular Design and

Cost Modelling
Appendix: Design Solftware
Value Chain and Business
Ecosystem Management

Prof. Luiz F. M. Vieira

 What is Modular Design?

• Design approach that subdivides a system in smaller parts that can be

independently created and then used in different systems

• Modular system can be characterized by functional partitioning into

discrete scalable, reusable modules…

• … with regular use of well-defined industry standard modular interfaces

• Modular design is an attempt to combine the advantages of

standardization/scalability (high volume translates in low
manufacturing costs) and customization, allowing augmentation
3 Lab--- Modular Design and
(plugging in new modules) and exclusions
Cost Modelling

Value Chain and Business • A downside of modularity is that low quality modular systems are not
Ecosystem Management
optimized for performance – usually due to the cost of interfaces
Prof. Luiz F. M. Vieira between modules
 Desired Characteristics of Modular Systems

FLEXIBILITY COST-EFFECTIVE PREDICTABLE

• Scalability • Right-size
• Performance
• Handles uncertain • Low cost – re-use established in
growth plans and sustainability advance
• Quick to deploy • Simplified • Tested and
• Allows other firms planning and validated designs
to contribute engineering
3 Lab--- Modular Design and
Cost Modelling

Value Chain and Business

Ecosystem Management

Prof. Luiz F. M. Vieira

 Advantages in Modular Design

Advantages Why?
▪ Project time shortened – modular process systems developed in parallel
Faster Time to
▪ Start-up time minimized – systems fully assembled / tested before shipped
Market
▪ Weather delays eliminated – modules can be assembled indoors
▪ Shorter project timeline, efficient use of material and smaller field crew
Reduced Costs ▪ For multi-units, high capital efficiency by designing once / building duplicates
▪ Off-site module construction does not interrupt/shut down current operations
▪ Fewer onsite OSHA exposure hours and smaller crew sizes
Safety Benefits ▪ Ideal enclosed fabrication facility reduces safety risks for fabrication
▪ Modular process system testing and checkout prior to shipment

3 Lab--- Modular Design and

▪ Reduce materials waste – components are simplified
Cost Modelling Less Resource
▪ Smaller field crews – assembly and fabrication technicians are eliminated
Requirements
Value Chain and Business ▪ Less on-site space requirements
Ecosystem Management

Prof. Luiz F. M. Vieira Higher Quality ▪ Welding, pipe-fitting and other fabrication processes under ideal conditions
Assembly ▪ Highly trained and experienced assembly and fabrication technicians
Source: M. Porter, Competitive Advantage
 Modular design in the Vehicle Industry has increased
weight over time – optimization should be combined:

Constructal Law
▪ A system can be divided into subsystems (elemental parts) using
tree models;
▪ Any complex system can be represented in a modular way and it is
possible to describe how different physical magnitudes flow through
the system;
▪ Analysing the different flowpaths it is possible to identify the critical
components that affect the performance of the system;
3 Lab--- Modular Design and
Cost Modelling
▪ By optimizing those components and substituting them with more
Value Chain and Business
Ecosystem Management performing ones, it is possible to improve the performances of the
Prof. Luiz F. M. Vieira system.
 Modular Design in our Miniature Car – 3 subsystems

▪ BODY

▪ ENGINE

3 Lab--- Modular Design and

Cost Modelling

Value Chain and Business

▪ CHASSIS
Ecosystem Management

Prof. Luiz F. M. Vieira

 Agenda

▪ Modular Design

▪ Cost Modelling

▪ Project “Make” – Miniature Car Design

3 Lab--- Modular Design and

Cost Modelling
Appendix: Design Solftware
Value Chain and Business
Ecosystem Management

Prof. Luiz F. M. Vieira

 Activity-Based Costing

3 ACTIVITIES 3 RESOURCES

• Design • Materials
• Prototype • Machine
• Make • Labor

3 Lab--- Modular Design and

Cost Modelling

Value Chain and Business

Ecosystem Management

Prof. Luiz F. M. Vieira

 Resources and Unit Costs

Machine cost R$/hour

3D Printer Hobbist 30
3D Printer Industrial Grade 250
Hobbist Lathe 30
Hobbist Milling 30
Density
Material R$/kg Industrial Lathe 80
(kg/m3)
Industrial Milling 80
Aluminum 5000 Series 2.680 35,86
Lathe CNC 120
Brass 8.600 53,35
Machine Center CNC 230
Hobist 3D Printer ABS 1.030 180,00
Industrial 3D Printer ABS 1.030 1.800,00
Industrial 3D Printer Resin 1.180 1.800,00
Nylon 1.140 30,70 Labor cost R$/hour
Polyacetal 1.410 49,65 CNC Programming Specialist 50
3 Lab--- Modular Design and
Cost Modelling
SAE 1045 Steel 7.860 15,27 Engineer 150
Machine Shop Technician 20
Value Chain and Business Student 10
Ecosystem Management

Prof. Luiz F. M. Vieira

 Design Cost

DESIGN:

Labor Hours and Cost:

Hours Total Cost Total

Name Position
22/ago Hours ($/hr) Cost ($)

Alex Engineer 4,00 4,00 150,00 600,00

- --

- --

- --

- --

- --

- --

- --

- --

- --
3 Lab--- Modular Design and
Cost Modelling Total 4,00 - - - - - - - - - 4,00 600,00

Value Chain and Business

Ecosystem Management TOTAL DESIGN COST 600,00

Prof. Luiz F. M. Vieira

 Prototype Cost
PROTOTYPE:

Labor Hours and Cost:

Hours
Name Position
22/ago Total Hours Cost ($/hr) Total Cost ($)

Alex Engineer 4,00 4,00 150,00 600,00

- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -

Total 4,00 - - - - - - - - - 4,00 600,00

Materials:

Quantity (kg)
Material
22/ago Total Qty (kg) Cost ($/Kg) Total Cost ($)

Brass 2,00 2,00 53,35 106,70

- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -

Total 2,00 - - - - - - - - - 2,00 106,70

Machine & Equipment:

3 Lab--- Modular Design and Machine & Equipment

22/ago
Hours
Total Qty (kg) Cost ($/Kg) Total Cost ($)
Cost Modelling Hobist Lathe 3,00 3,00 30,00 90,00
- - -
- - -
Value Chain and Business - - -
- - -
Ecosystem Management - - -
- - -
- - -
Prof. Luiz F. M. Vieira - - -
- - -

Total 3,00 - - - - - - - - - 3,00 90,00

TOTAL PROTOTYPE COST 796,70

 Make Cost
MAKE:

Labor Hours and Cost:

Hours
Name Position
22/ago Total Hours Cost ($/hr) Total Cost ($)

Alex Engineer 4 4,00 150,00 600,00

- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -

Total 4,00 - - - - - - - - - 4,00 600,00

Materials:

Quantity (kg)
Material
22/ago Total Qty (kg) Cost ($/Kg) Total Cost ($)

Brass 2,00 2,00 53,35 106,70

- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -

Total 2,00 - - - - - - - - - 2,00 106,70

Machine & Equipment:

3 Lab--- Modular Design and Machine & Equipment

22/ago
Hours
Total Qty (kg) Cost ($/Kg) Total Cost ($)

Cost Modelling Industrial Milling 4,00 4,00 80,00 320,00

- - -
- - -

Value Chain and Business -

-
-
-
-
-

Ecosystem Management -
-
-
-
-
-
- - -

Prof. Luiz F. M. Vieira

- - -
- - -

Total 4,00 - - - - - - - - - 4,00 320,00

TOTAL MAKE COST 1.026,70

 Agenda

▪ Modular Design

▪ Cost Modelling

▪ Project “Make” – Miniature Car Planning

3 Lab--- Modular Design and

Cost Modelling
Appendix: Design Solftware
Value Chain and Business
Ecosystem Management

Prof. Luiz F. M. Vieira

 Project “Make”: Design and Make a Miniature Car
THE PROJECT
DESIGN
The miniature car should have a modular design with three different
subsystems: (a) the chassis (axis and wheels); (b) the motor and
transmission and (c) the body (for two passengers with roof/hood). Each
group should design the chassis and body subsystems, while the motor (air
propulsion) and transmission will be provided. Each group is responsible to
dimension the car to get the best cost-performance (see table below). The
design should include a cost budget – not only with parts and materials, but
also with estimates of design, prototype and manufacture hours and scrap
material -- to manufacture the miniature car.
F1inschools.com / Brazilian “Pé na Tábua” Toy Car

MAKE
The miniature car should be manufactured using Insper’s laboratory
3 Lab--- Modular Design and
Cost Modelling
infrastructure: (a) the TecLab facility to manufacture the chassis and (b) the
TecLab or FabLab facilities, depending on the design, to manufacture the
Value Chain and Business body. The assembly of the miniature car is responsibility of each Group.
Ecosystem Management
Actual costs should be controlled during the manufacturing process.
Prof. Luiz F. M. Vieira
F1in schools.com / Brazilian “Pé na Tábua” Toy Car
 Project “Make”: Design and Make a Miniature Car
THE COMPETITION

The competition is going to be in two parts – (a) among groups (05/04),

where each group will have developed the full design and manufacture of the
miniature car and (b) among ecosystems (06/08), where groups will have
developed the miniature car in ecosystems (mixing the design and parts).
The winning criteria will be based on an index calculated as the weighted
average of three parameters

PARAMETERS UNITS WEIGHT

Cm
Performance: average time to complete the track in three trials – adjustments are allowed 60%
(normalized)
0-10
Attractiveness: design modularity and body beauty (average grade of a panel of judges) 30%
(subjective)
0-10
Durability: state of miniature car during after three trials (average grade of a panel of judges) 10%
(subjective)

3 Lab--- Modular Design and Value created will be evaluated by the monetization of the index above
Cost Modelling
(willingness to pay, to be defined) and compared with the actual cost of the
Value Chain and Business project (design and manufacture the miniature car).
Ecosystem Management

Prof. Luiz F. M. Vieira Groups should design a break system (to stop the car at the end of race
track) – since we will perform three races on each car
 Project Planning – Front-End Loading (FEL) Methodology

3 Lab--- Modular Design and

Cost Modelling

Value Chain and Business

Ecosystem Management

Prof. Luiz F. M. Vieira

 In our case:

Design 1 Prototype 2 Manufacturing 3

• Project Planning • Revised Design • Production

• Detailed Design • Functional Prototype • Adjustments
• Design Cost • Prototype Cost • “Make”/Total Cost
• Criteria – Gate 1 • Criteria – Gate 2 • Criteria – Gate 3

• Cost • Cost • Cost

• Report 1 • Report 2 • Report 3
3 Lab--- Modular Design and
Cost Modelling
Design Software Fully-Functional Final Product
Value Chain and Business & “Dirty” Prototype Prototype (3D Printers and/or
Ecosystem Management
(with Floral Foam) (3D Printers) metal chassis parts)
Prof. Luiz F. M. Vieira
 Report Structure (see details in files published in
Blackboard):

Report 1 Report 2 Report 3

Design Prototype Final Product

• Project Objective/Plan • Prototype & Costs • Final Product

• Project Value Chain • Marketing Plan • Ecosystem
• Detailed Design & Cost • Supply Chain • Organiz, Process & Cost
• Criteria – Gate 1 • Criteria – Gate 2 • Criteria – Gate 3

3 Lab--- Modular Design and

Cost Modelling

Value Chain and Business

Ecosystem Management

Prof. Luiz F. M. Vieira

 Use of the TecLab:

Design 1 Prototype 2 Manufacturing 3

03 (02/27) Project Definition 14 (04/10) Prototyping 21 (05/08) Production

05 (03/06) Design SW Use 16 (04/17) Assembly 23 (05/15) Assembly
09 (03/20) “Dirty” Prototype 18 (04/24) Adjustments 25 (05/22) Adjustments

+ 4 Hours Off-Class + 4 Hours Off-Class + 4 Hours Off-Class

12 (04/03) 20 (05/04) 28 (06/08)

Report 1 Report 2 Report 3
Competition Competition
3 Lab--- Modular Design and
Work Dynamics

Cost Modelling ▪ (Group) uses SW to design car ▪ (Group) Delivers design code • (Group) Delivers design draws
▪ (Group) develops Dirty Prototype ▪ (Lab) Optimizes printers’ and metal parts request
Value Chain and Business from “Floral” Foam schedule and Delivers parts • (Lab) Optimizes equipment
Ecosystem Management ▪ (Group) makes Design Adjustm. ▪ (Group)Assembles parts, Tests schedule and Delivers parts
Prof. Luiz F. M. Vieira
and makes Design Adjustments • (Group) Assembles parts,
Tests and makes Design adj.
 Agenda

▪ Modular Design

▪ Cost Modelling

▪ Project “Make” – Miniature Car Planning

3 Lab--- Modular Design and

Cost Modelling
Appendix: Design Solftware
Value Chain and Business
Ecosystem Management

Prof. Luiz F. M. Vieira