Sebastian K. Fixson

The power of integrality: Linkages between product architecture, innovation, and industry structure

A substantial literature stream suggests that many products are becoming more modular over time, and that this development is often associated with a change in industry structure towards higher degrees of specialization. These developments can have strong implications for an industrys competition as the history of the PC industry illustrates. To add to our understanding of the linkages between product architecture, innovation, and industry structure we develop detailed product architecture measurements based on a previously proposed method [Fixson, S.K., 2005. Product architecture assessment: a tool to link product, process, and supply chain design decisions. Journal of Operations Management 23 (3/4), 345-369] and study an unusual case in which a firm - through decreasing its product modularity - turned its formerly competitive industry into a near-monopoly. Using this case study we explore how existing theories on modularity explain the observed phenomenon, and show that most consider technological change in rather long-term dimensions, and tend to focus on efficiency-related arguments to explain the resulting forces on competition. We add three critical aspects to the theory that connects technological change and industry dynamics. First, we suggest integrating as a new design operator to explain product architecture genesis. Second, we argue that a finer-grained analysis of the product architecture shows the existence of multiple linkages between product architecture and industry structure, and that these different linkages help explain the observed intra-industry heterogeneity across firms. Third, we propose that the firm boundary choice can also be a pre-condition of the origin of architectural innovation, not only an outcome of efficiency considerations.

Modularity as a Strategy for Supply Chain Coordination: The Case of U.S. Auto

Companies across industries have admired the success of Dell Computersin using modularity as part of a mass customization strategy to achieve build-to-order and a streamlined supply chain. Many companies are attempting to emulate this successful model, including the American automotive industry. This paper focuses on how the auto industry has been attempting to move to modularity, in part, motivated by a desire to build cars to order. This movement has led to major changes in supply chain practices based partly on imitation of successful keiretsu models in Japan and a move toward modules. This study finds significant impact of modularity on outsourcing, product development, and supply chain coordination based on interviews conducted with automakers and suppliers from 2000-2003. Based on our interviews, we observe that modularity has accompanied a major reorganization of the automotive supplier industry. We identify two major issues that appear to block U.S. automakers from gaining most of the advantages possible through modularity. First, most modularity activities appear to be primarily strategically cost reduction driven, leaving the potential of modularity for mass customization largely untapped. Second, the shift in industry reorganization has not been accompanied by changes in the supply chain infrastructure to encourage long-term partnerships. We contrast this to the more gradual approach used by Toyota as it incorporates modularity on a selective basis and moves to a build-to-order model

Modularity and Commonality Research: Past Developments and Future Opportunities

Research on modularity and commonality has grown substantially over the past 15 years. Searching 36 journals over more than the past 35 years, over 160 references are identified in the engineering and management literature that focus on modularity or commonality in the product and process development context. Each of the references is analyzed along the dimensions subject, effect, and research method. The subjects of these studies have been products, processes, organizations, and even innovations, although the set of references shows a strong preference towards products. Similarly, a broad range of effects has been studied, albeit with the topic cost dominating all other effects. A variety of research methods has been applied to the study of modularity and commonality but the distribution of research methods differs substantially for modularity and commonality research. Despite the wealth of existing research, there are still significant opportunities for future research. In particular, studies that incorporate modularity and commonalitys multiple effects on various players along the supply chain, that combine multiple research methods, and that follow systems over time appear very promising.

Evolving Models of Supplier Involvement in Design: The Deterioration of the Japanese Model in U.S. Auto

The U.S. auto industry in the 1990s was in a state of transition, driven by a rapidly changing environment and attempts to adopt best practices from other automakers. The Japanese supplier management system is regarded as extremely effective in delivering high-quality component systems integrated into the vehicle with short design lead times. American automakers dedicated themselves to reengineering their product development systems, benchmarking the Japanese model, and outsourcing increasing levels of vehicle content and design responsibility. This paper analyzes how these attempts at institutional imitation evolved new approaches to supplier involvement in design in the U.S. auto industry based on interviews conducted during 1998-2001. Although once copying the Japanese model, the United States has chosen a modified approach and developed models distinctively different from the original. The authors identify two dominant supplier management models emerging during this time and a newly emerging hybrid original equipment manufacturer/supplier relationship style. Concepts from organizational design and behavioral economic theories are used to explain observations across industries overtime. Evidence suggests that American automaker practices have not evolved to support the great responsibility being outsourced to suppliers. There are still barriers that create adversarial relationships when a partnership model is required for true integration of design efforts.

Modularisation and outsourcing: who drives whom? A study of generational sequences in the US automotive cockpit industry

In this paper, we study the interactions between modularity and outsourcing in the auto industry. Focusing on vehicle cockpit projects in North America, we collect data over three product architecture generations and the associated shifts in firm boundaries for multiple processes covering product development and production. We find that the direction of influence between product architecture and firm boundary varies across individual processes and over time, resulting in a zig-zag path towards higher levels of modularity and outsourcing over the observed timeframe. The relative strength of the factors that drive these changes appears to be dependent on (a) idiosyncrasies of the logic of individual processes, i.e., their cost structure, their perceived strategic value, and the capabilities available in the supply chain for their completion, and on (b) the relevance and relative weight of external factors such as labour costs, capital cost, and external development of technologies.

Assessing Product Architecture Costing: Product Life Cycles, Allocation Rules, and Cost Models

Product families and product platforms have been suggested as design strategies to serve heterogeneous markets via mass customization. Numerous, individual cost advantages of these strategies have been identified for various life cycle processes such as product design, manufacturing, or inventory. However, these advantages do not always occur simultaneously, and sometimes even counteract each other. To develop a better understanding of these phenomena, this paper investigates the cost implications of the underlying design decision: the product architecture choice. The investigation includes factors such as product life cycle phases, allocation rules, and cost models, all of which impact the cost analysis results. Based on this investigation, directions for future research on product architecture costing are provided.Copyright

Teaching innovation through interdisciplinary courses and programmes in product design and development: an analysis at 16 US schools

This publication contains reprint articles for which IEEE does not hold copyright. Full text is not available on IEEE Xplore for these articles.

A Roadmap for Product Architecture Costing

In recent years many markets have exhibited increasing demand heterogeneity; they are fragmenting into more and smaller market niches. This development threatens the large-scale assumption of many mass production processes. As a result, firms face the dilemma of how to provide a wide variety of goods for prices that can compete with mass produced products. To respond to these challenges, many firms have begun searching for ways to combine the efficiency of mass production with the variety of customer-oriented product offerings. A major focus of these efforts has been the fundamental structure of the product: the product architecture. Examples for this development are Sony’s personal music players (Walkman) that use common drives across different models (Sanderson and Uzumeri, 1995), different power tools that use similar motors (Meyer and Lehnerd, 1997), PDAs (personal digital assistant) that can be turned into an MP3 player, a camera, or a telephone with different attachments (Biersdorfer, 2001), and automobiles with common components across models (Carney, 2004).

Shifting grounds: how industry emergence changes the effectiveness of knowledge creation strategies – the case of the US automotive airbag industry

This paper investigates the effect industry life cycle phase shifts have on the effectiveness of firms’ knowledge creation strategies. Building on literature streams on strategic knowledge management and industry life cycles, we develop theoretical arguments for why the best knowledge search strategy should be different before the emergence of an industry compared to afterwards. Testing our hypotheses empirically in the emerging US automotive airbag industry confirms the powerful forces of industry emergence: the best knowledge search strategy is initially one that looks inward into the organisation but outside of the technology area, and later shifts to one that is looking outward from the organisation and the technology. As practical implication we derive that R&D managers should (i) adjust their teams’ knowledge search strategies depending on the industry life cycle phase in which they find themselves, and (ii) especially look for new applications of their firms existing knowledge in related fields.

Factors Affecting the Use of Outside, Intermittent Resources during NPD

Information technology, globalization, and digital design have all contributed to the changing composition of new product development (NPD). These developments have led to a paradigm shift where continuous resources can be replaced by outsourced resources that are used intermittently throughout the entire innovation process. These resources can be plugged into the project at opportune times thereby lowering fixed costs and speeding commercialization. However, this intermittent use of resources requires appropriate management actions. This study reports on longitudinal, ethnographic case research performed over the span of the product development cycle of two projects. We look at multiple factors that can influence the effective coordination of outside, intermittent resources on the project. We explore critical characteristics of intermittent resources employed by new ventures, focusing on project management, the product development process, and the role of technology enablers such as IT collaboration. We ...