Modularized megaprojects: What we can learn from Tesla (Part 2)

In the first part of our two-part blog post, you learned that complex planning and a multitude of dependencies can make a project a very fragile construct. If a project fails, it always fails in its entirety. This is because the project only adds value after it has been 100% completed successfully.

In this second part, we show to what extent the modularization of a project can provide a remedy for the problems mentioned, what is meant by positive and negative learning, and the relevance of modular project management in practice.

Goal-oriented simplification through a modular approach

The planning of the Tesla Gigafactory was fundamentally different from that of Berlin Airport. The project was not planned holistically, taking into account a large number of project-related special features. Rather, modularization possibilities were identified and the self-contained, relatively simple modules were planned independently of each other. An aggregation of the modules in the follow-up finally led to the desired project result.

Design and replication of self-contained units

By sensibly subdividing the project, a target-oriented scaling of project-relevant variables was achieved. It is much easier to set up time frames and budgets for a few less complex units than to define resources and deadlines for an entire megaproject.

Risks that arise are also limited to a single module and do not jeopardize the overall success of the project. A less complex context also makes them easier to grasp and, accordingly, easier to control. This is also of great importance in the replication of modules. If a module that has already been implemented is replicated as part of the same or another project, risks that previously occurred can be effectively minimized. This is not the case with monolithic project planning due to the high degree of specialization.

At the time of the opening of the Gigafactory in 2016, construction work on the entire factory complex was not complete. Nevertheless, the production of the batteries was already running  from that point on. Tesla has largely the modular structure of the project to thank for this. The units function independently of each other. While construction work has not even begun on some modules, others have already been completed and are amortizing investments already made for construction through their early use.

Robust planning and rapid implementation

Modularity also makes for much more robust project planning. By eliminating many interdependencies, subsequent adjustments and inconsistencies do not delay the entire project. Work on many other project units can continue simultaneously and independently of each other. Particularly in the case of extensive projects, rapid implementation can be decisive for the success of a project. Certain uncertainties pose a major threat in projects of longer duration. For example, the armed conflict in Ukraine is currently leading to an increase in the prices of numerous goods. A project manager would hardly have taken this into account in the project planning one or two years ago, as it was hardly foreseeable at that time. With an extension of the time horizon, the probability of unforeseeable events affecting the project also increases. It is therefore advisable to limit the time extension of the project as much as possible. Modular project management makes this possible.

Negative vs. positive learning in the project

Dealing with both positive and negative experiences is also of great importance in the context of megaprojects. A learning process among the project team is important and ensures that certain mistakes are not repeated.

However, in some cases, learning processes can also have a negative impact on the project. So-called negative learning takes place when additional problems arise as learning progresses. As a result, the project process is further decelerated. This phenomenon occurs primarily in monolithically planned projects. Due to the complexity and interconnectedness of tasks, uncovering and fixing problems can unearth further difficulties.

In contrast, a more constructive learning approach is evident in modular project planning. Lessons learned documented during the completion of the earlier modules can be easily applied to subsequent modules to optimize the flow of the entire project. The simple, positive learning process is characterized here by repeated execution of the same or similar activities.

If, for example, the terminals at an airport are planned as replicable modules, errors can be continuously minimized. Tesla also implemented this approach at the Gigafactory: Various production units were continuously replicated. And with increasing repetition, the replications ran more and more smoothly due to the learning effects that occurred.

Practical relevance of modular project management

Modular project management cannot be implemented equally in every project. While monolithic project planning focuses on highly specialized solutions, modular planning thrives on a certain degree of standardization and replicability.

One could now argue that the Berlin airport requires a more specialized solution than a comparatively generic production facility of Tesla and for this reason modularization is out of the question. However, the construction of the Madrid subway has shown that a modular approach can also be effective for complex megaprojects in transportation infrastructure. Here, a rational and lean modularization strategy has enabled the metro to be completed twice as fast and at 50% of the cost, compared to the industry average (Flyvbjerg, 2021).

 The question is not whether a project can be modularized, but to what degree it can be modularized. While relatively generic projects are more likely to be modularizable, a high degree of customization will likely only allow for the formation of a few yet carefully designed, self-contained units.

Ultimately, consider for each project both how basic modules can be formed and the extent to which such modules can benefit from replicability.  When designing the modules, the following principle applies: as little specialization as necessary and as much standardization as possible. In this way, you can make your project management as efficient as possible with the help of modularization.

Project management software that is right for you can also ensure a more efficient project process, regardless of whether you plan your project modularly or monolithically. It accompanies and supports your project from the initial planning, through the entire execution, to the documentation. With InLoox, you can add value to your project.

Test InLoox now for free!