Modularization in Black-Box Design: Implications for Supplier-Buyer Partnerships

New business practices are forcing high-tech firms to reconsider their strategic thinking in R&D and supply chain management. How do these firms manage differing new product development strategies to facilitate collaboration with suppliers and customers? This paper examines the effects of modularization in black-box design and subsequent impacts on supplier-buyer partnerships by evaluating the opportunity for modularization at four different levels: component, module, subsystem, and system. The scope of modularization sensitivity is assessed in terms of the product’s architecture, interface compatibility effects, component customization, value inputs, and supplier-buyer interdependence. An example of windshield wipers controller for Chrysler Jeeps illustrates that, higher opportunities for modularization in black-box design can be attained through a more collaborative form of supplier-buyer partnerships.