Modularization as a Strategy and its Implications for New Product Development and Supply Chain Management

Modularization of product architectures refers to a new product development (NPD) strategy in which interfaces shared among components in a given product architecture are specified and standardized to allow for greater substitutability of components across product families. It is argued that the degree of modularization inherent in product architectures depends on the constituent components and interfaces.  The main research questions addressed are: To what extent do choices of components and respective interfaces influence the modularization of product architectures? How can we systematically assess the complexities of modularization induced by components and respective interfaces embedded in architectural designs? To what extend modularization strategies influence supply chain management (SCM)? I would like to introduce a way to integrate various perspectives on product architecture modularity into a general framework, and also to propose a way to measure the degree of modularization embedded in product architectures. Trade-offs between modular and integral product architectures and how components and interfaces influence the degree of modularization are considered. The following key elements of product architecture modularity are identified: components (standard and new-to-the-firm), interfaces (standardization and specification), degree of coupling, and substitutability. A mathematical model, termed modularization function is applied to measure the key elements and their combined effect on the degree of modularization embedded in product architectures. The application of the modularization function is illustrated with two distinct sets of product architectures: Chrysler Jeeps windshield wipers controllers and Schindler’s hydraulic and traction-pull transmission elevators. Lastly, the implication of modularization for NPD and SCM is discussed, e.g. with respect to mass customization and postponement strategies.

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Dr.ir. J.C.M. van den Ende

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