Juliana Hsuan Mikkola

Managing modularity of product architectures: toward an integrated theory

The management of innovation through modular product architecture strategies is gaining increasing importance for firms, both in practice and theory. Modularity refers to a new product development 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 modularity inherent in product architectures depends on the constituent components and interfaces. This paper introduces a mathematical model, termed the modularization function, for analyzing the degree of modularity in a given product architecture. It takes into account the following variables: components; degree of coupling; and substitutability of new-to-the-firm components. The application of the modularization function is illustrated with two elevator systems from Schindler-traction and hydraulic. The comparative analysis of the elevators captures the sensitivity and dynamics of product architecture modularity created by three types of components (standard, neutral, and unique) and two types of interfaces (fundamental and optional).

Modularity, component outsourcing, and inter‐firm learning

Modularization of product architectures is a strategy for managing complex design activities and production systems, and associated supply chain issues. It has wide-reaching implications, from design engineering to business strategy. With standardized interface specifications, component outsourcing is possible, both with respect to the division of tasks in functional specification and detailed engineering of a product architecture. However, failure at the system level could still take place if interface compatibility issues of the outsourced component with the rest of the system are not understood. Outsourcing creates a certain degree of supplier-buyer interdependence and possibilities for inter-firm learning. A study of Chrysler Jeeps WIPERs suggested that learning-by-failure from one product architecture cultivated closer cooperation between the supplier and Chrysler to solve technical problems as well as to be innovative in searching for the best technological solutions for future product architecture designs.

Portfolio management of R&D projects: implications for innovation management

Globalization of markets and new business practices are prompting high-tech firms to reconsider their competitive strategy. The increasing complexity of technologies in addition to shorter product life cycles are also forcing firms to rely on R&D as a source of strategy. More importantly, firms are inclined to evaluate their technologies from a portfolio’s perspective in which a set or a sub-set of R&D projects is evaluated together, in relation to each other. Portfolio techniques can help strategic managers in evaluating whether a portfolio of products is adequate from the perspective of long-term corporate growth and profitability. Obviously, when R&D projects are evaluated relative to one another, technical capability management of such projects must be carried out concurrently. In this paper, R&D Project Portfolio Matrix is used as a tool for analyzing a portfolio of R&D projects by linking competitive advantages of a firm to benefits these projects may provide to customers. Examples of batteries for electric vehicles (EV) and hybrid electric vehicles (HEV) are provided to illustrate how such a matrix is used, and some of the implications for innovation management of such projects.  2001 Elsevier Science Ltd. All rights reserved.

Supply-chain integration: implications for mass customization, modularization and postponement strategies

This paper focuses on three interrelated and complementary strategies for managing supply-chain integration: mass customization, postponement and modularization. While the goal of mass customization is to produce customized goods at low costs, postponement strategy focuses on delaying customization as close to the customers as possible. The extent of customization and postponement of products is rooted in modularization of product architecture designs. Product customization can take place either based on a common platform with additional options or based on combining and mixing-and-matching modules to achieve different product characteristics. It also requires a supply-chain strategy to facilitate assembly, logistics and outsourcing decisions. We analyse mass customization, postponement and modularization strategies through a ‘modularization characteristic curve’, which is shaped by two variables: opportunities for modularization and interface constraints, which represent the aggregate effect from interface compatibility effects, component customization, value inputs and supplier–buyer interdependence. Managerial implications of these strategies are also discussed.

Platform management: Implication for new product development and supply chain management

Purpose – To identify some of the major issues and problems firms face, when they collaborate with suppliers in new product development. Design/methodology/approach – The paper presents a case study of a leading Danish hearing aid manufacturer. Findings – Early involvement of suppliers in new product development reduces time‐to‐market, but increases the risk that proprietary knowledge is leaked to the competitors. Therefore, the supplier approval process is very important. Research limitations/implications – The paper discusses the implications of platform management for new product development and sourcing strategies. The paper is based on a single case study. In order to generalize the findings, it is necessary to study more companies from different industries, with different technologies, competition, and contextual features. Practical implications – The paper illustrates the risk of single sourcing and raises the question, how buyers without leverage can become an interesting customer for large suppliers. Originality/value – The paper analyzes the implications of platform management for new product development and supply chain management at the interfaces between focal company and its suppliers and customers.

Modularity and interface management of product architectures

The management of innovation through modular product architecture strategies is gaining increasing importance for firms, not only in practice but also from a theoretical perspective. It is argued that the degree of modularity inherent in a given product architecture is sensitive and highly dependent upon the number of components and the interface constraints shared among the components, modules, sub-systems, and systems. This paper applies a mathematical model for analyzing dynamics and the degree of modularity of a given product architecture by taking into account the following variables: number of components, number of interfaces, new-to-the-firm component composition, and substitutability factor. The application of the modularization function is illustrated with two elevator systems from Schindler Lifts of Switzerland: traction and hydraulic elevators. The comparative analysis of the elevators captures the sensitivity and dynamics of product architecture modularity created by three types of components (standard, neutral, and unique) and two types of interfaces (fundamental and optional).

Modeling the Effect of Product Architecture Modularity in Supply Chains

This paper proposes mathematical modeling as an alternative research methodology for analyzing complex systems. The process of deriving a mathematical model is explored through the complexities of product architecture modularity in supply chains. Two model settings are analyzed: (1) supply chain and (2) focal firm. At the supply chain level, ‘modularization characteristic curve’ is applied to assess the impact of degree of supplier-buyer interdependence on modularization. At the focal firm level, the ‘modularization function’ is applied to measure the degree of modularization embedded in product architecture designs. In order to illustrate how the models can be applied, the case of Chrysler Jeep WIPERs is presented.