An investigation on the impact of product modularity level on supply chain performance metrics: an industrial case study

The benefit of integrating product design decisions and supply chain design decisions has been recognized by researchers. Such integration can facilitate better communication between design teams and operations groups. Consequently, potential supply chain risks can be highlighted and addressed before the launch of a new product. Modularization is one of the most critical elements for both product design and supply chain design decisions as it impacts the assembly sequence and hence the selection of component and module suppliers. However, the impact of modularity level on supply chain performance is still unclear, and thus is the focus of this study. The proposed analytical method incorporates both product design and supply chain design functions, and hence, enables simultaneous consideration of these decisions. The supply chain performances of all twomodule and three-module design concepts are fully investigated in an effort to explore the impact of modularity level on supply chain performance. Results show that increased modM.-C. Chiu (B) Department of Industrial Engineering and Engineering Management, National Tsing-Hua University, 101 Kuang-Fu Road, Hsinchu 20013, Taiwan, ROC e-mail: [email protected] G. Okudan School of Engineering Design, The Pennsylvania State University, 213T Hammond Bldg, University Park, PA 16802, USA e-mail: [email protected] G. Okudan Department of Industrial and Manufacturing Engineering, The Pennsylvania State University, 213T Hammond Bldg, University Park, PA 16802, USA ularity is advantageous for the time-based performance of a supply chain network, whereas decreased modularity yields superiority in terms of cost performance.