Assembly = A group of components gathered together that perform a common purpose
Ex: Airplane or Automobile
Subassembly = A smaller assembly that performs an individual function that - when combined with other subassemblies - goes into a much larger assembly that performs a variety of coordinated functions
Ex: Airplane or Automobile Engine
Component = An individual part/piece of an assembly or subassembly
In manufacturing, systems are typically organized in this Assembly → Subassembly → Component hierarchy
This hierarchy is the same in both Systems Approach's methodology, as well as how you organize assemblies in CAD (Fusion 360, esp.), only the terminology is different
Not every product falls under this exact hierarchy. Think about assemblies being like Living Family Trees - some families are big and complex with many parallel branches and off-shoots, others are simple and contain very few or sometimes even one individual:
Some products are Single-Component Products (SCP's), only being made of one piece (Component)
Some products are simple assemblies, not having any smaller subassemblies (Assembly → Components)
Some products are highly complex Assemblies, having multiple, nested subassemblies (Assembly → Subassemblies → Subassemblies → Components)
...and everything in-between!
Instead of Assembly/System, it just says "Component", and instead of Subassembly/Module it just says "Component" again, but the Components are also called "Component" - what gives?
The reason for this is that you organize assemblies within Fusion 360 via Components; remember "Rule #1"?
This is called Component Nesting
In practice, Component Nesting is very simple to do and can be done two possible ways:
When creating a new component, select another component as the "Parent" - it will nest your newly-created component under this one (to avoid this, select the main file component - at the top of the tree - as the Parent)
If you have a component that is not nested the way you would like, you can click-drag-and-drop it on top of another component in the tree, and it will nest it under that component
Below is a gif walking through an Assembly, its Subassemblies, and all the Components within one Subassembly - all organized via Components within Fusion 360
In CAD, there are two main strategies for creating assemblies: Top-Down or Bottom-Up Assembly Modeling
The choice between bottom-up and top-down assembly strategies depends on the specific requirements of the project, the design stage, and preference.
Additionally, some CAD software may be more/less suited to one strategy over the other, and some software may allow for a combination of both strategies, therefore it is important to check the features and capabilities of the software to decide which strategy is the best fit for the project.
For example, Autodesk Fusion 360 is well-optimized for top-down assembly strategy, and when designing things from scratch this is the primary/optimal method
Top-Down Assembly Strategy is a newer CAD workflow, and involves creating the assembly first and then creating the individual parts within it. This approach is useful when the overall assembly is the primary focus and the individual parts are not strictly-defined or previously-made. It allows for quick design exploration, and it makes it easy to modify the overall assembly.
Top-Down Assembly is well suited for projects where the overall assembly is the primary focus, the individual parts are not well defined, and the design is still in an exploratory stage.
Bottom-Up Assembly Strategy is a traditional CAD workflow, and involves creating individual parts and then assembling them together to form a larger assembly. This approach is useful when the individual parts are strictly-defined and/or have been previously designed. It allows for the reuse of parts and it makes it easy to modify individual parts without affecting the rest of the assembly.
Bottom-Up Assembly is well suited for projects where the individual parts are well-defined, have been previously designed and are intended to be reused in other projects.