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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 industry’s 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, 2005) 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 efficiencyrelated 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.

Research on modularity and commonality has grown substantially over the past 15 years. Searching 36 journals over more than the past 35 years, I identify over 160 references 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 commonality's multiple effects on various players along the supply chain, that combine multiple research methods, and that follow systems over time appear very promising.

'Product modularity' has recently experienced a significant increase in interest in the academic literature. While the concept of product modularity is used across a wide range of academic research areas, substantial variations exist in the ways in which the concept is described and interpreted. In this paper, I develop a framework to represent the similarities and differences that appear across these variations of the concept of product modularity. Next, through an extensive literature search I construct a set of 85 references representing the use of product modularity in the engineering and management literature over the past 30 years (1975–2006). With help of the framework I then analyze the use and interpretation of product modularity in every reference in the set. The analysis demonstrates that the product modularity concepts taken together really encompass a bundle of product characteristics rather than a single condition, and individual research areas exhibit certain preferences in which they define and operationalize product modularity. I conclude with some recommendations for future research. Overall, this paper strives to provide a vocabulary to improve cross-disciplinary understanding of product modularity.

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 industry’s 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 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 in their analysis technological change in rather long-term dimensions, and tend to focus on efficiencyrelated arguments to explain the resulting forces on competition. Expanding on these theories we add three critical aspects to the theory construct that connects technological change and industry dynamics. First, we suggest re-integating 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.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Engineering Systems Division, Technology, Management, and Policy Program, 2002., Includes bibliographical references (p. 239-255)., Reaching saturation levels, many markets in modem industrial societies tend to fracture into smaller 'niche' markets, and create a need for greater variety. At the same time, increasing product variety in non-growing markets results in decreasing production volumes per model, which tends to increase costs. Modularity as a design concept has been suggested to be able reconciling these opposing effects. Most descriptions of modularity characterize products through idealized extremes, such as 'modular' versus 'integral.' While conceptually powerful, this notion is very difficult to operationalize. Consequently, it has been very problematic to determine the economic consequences of modularity. This thesis presents a methodology to overcome this problem. The development of the methodology is split into three parts: what is modularity, what costs are considered, and how can the link between the two be established? First, to operationalize modularity, an in-depth analysis of the phenomenon was conducted and an alternative framework developed. The multi-disciplinary analysis revealed that modularity is a bundle of product characteristics rather than an individual feature, and that different disciplines and viewpoints emphasize different elements of this bundle. Consequently, the descriptive product architecture framework developed in this thesis encompasses all dimensions identified in the analysis, but simultaneously enables one to comparatively measure those characteristics along individual dimensions., (cont.) Second, to improve the understanding of the multitude of costs that occur over a product's life, a product life-cycle view has been used to investigate the cost effects of early design decisions with respect to product architecture. In addition, a review of the cost modeling literature identified the gap that exists between some empirical work identifying particular product features' effects on particular costs, and the more general design guidelines such as design-for-manufacturing (DFM) or design-for-assembly (DFA). Finally, the thesis constructed a link between modularity and cost by applying the product architecture framework and technical cost modeling to experimental case studies. Case study subjects were four different car door structures. The case studies demonstrate the cost consequences of individual product architecture dimensions by isolating their effects from competing explanations. Enabling the translation of business goals into focused design advice, the proposed methodology represents a tool to reconnect management and engineering worlds., by Sebastian K. Fixson., Ph.D.