The role of product architecture in the manufacturing firm

Ulrich, Karl T.

doi:10.1016/0048-7333(94)00775-3

Cited by 2,163 publications

(1,814 citation statements)

References 15 publications

(8 reference statements)

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“…Design rules play an important role in determining the division of labor of innovation tasks and their allocation to different actors, and also in explaining industry evolution. One of the most prominent features of research on design rules is that it revolves around the concept of modularity (Brusoni and Prencipe, 2006: 179;Ulrich, 1995;Sanchez, 1997;Baldwin and Clark, 2000). Modularity refers to a decomposition scheme that assumes independence between modules, with interdependences confined within modules' boundaries (Baldwin and Clark, 2000) 1 .…”

Section: The Dominant Approach To Division Of Labor and Task Allocatimentioning

confidence: 99%

Beyond Product Architecture: Division of Labour and Competence Accumulation in Complex Product Development

Becker

Zirpoli

2011

SSRN Journal

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This paper considers the trade-off between leveraging external sources of innovation by outsourcing design and engineering activities and the ability to develop internal product development competences. The trade-off arises because the division of labor within and across firms' boundaries has a crucial role in shaping competence development processes, especially because the division of labor also influences opportunities for learning by doing. In new product development projects, learning by doing appears to be both a key determinant of competence development and a difficult-to-substitute form of learning. While the division of development tasks is often considered as guided by product architecture, we show that by decoupling the decisions concerning the product architecture and the allocation of development tasks, firms can realize the benefits of outsourcing such tasks while developing new internal competences. Drawing on a longitudinal case study in the automotive industry, we also identify a new organizational lever for shaping competence development paths and for designing firm boundaries. This lever consists in alternating different task allocation schemes over time for different types of development projects. We show why this is a novel solution, what its underlying logic is, and how it enables alleviating the trade-off between the benefits of leveraging external sources of innovation and the opportunities for competence development provided by in-house design and engineering. We discuss implications for theories of organizational boundary design and innovation management.

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Section: The Dominant Approach To Division Of Labor and Task Allocatimentioning

confidence: 99%

Beyond Product Architecture: Division of Labour and Competence Accumulation in Complex Product Development

Becker

Zirpoli

2011

SSRN Journal

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“…The product design and development literature discusses product architecture including the number, design and interaction of product components primarily from an engineering/design perspective (Ulrich 1995, Ulrich andEppinger 2000). However, such design decisions may also affect the incentives of the of the component parts suppliers.…”

Section: Literature Surveymentioning

confidence: 99%

Procurement in Supply Chains When the End-Product Exhibits the 'Weakest Link' Property

2004

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We consider a supply chain with one manufacturer who assembles an end-product using multiple outsourced parts. The end-product exhibits the "weakest-link" property, such that if any of its component parts fails, the end-product fails. The supplier of each component part can improve the (uncertain) quality of her parts by exerting costly effort that is unobservable to the manufacturer and is non-contractible. We analyze three possible contractual agreements between the manufacturer and suppliers: Acceptable Quality Level (AQL), Quality-Based Incentive Pricing (Q-Pricing) and Group Warranty. Under AQL, the manufacturer inspects all incoming parts, but establishes different quality thresholds and pays the suppliers different amounts for achieving the different thresholds. Under Q-Pricing, the manufacturer also inspects all incoming parts but pays each supplier a constant amount for each good part. Under Group Warranty there is no testing of the individual parts; instead all suppliers are responsible for any failed end-product. We compare the efficiency of these three contractual arrangements as a function of the exogenous variables. February, 2004Abstract: We consider a supply chain with one manufacturer who assembles an end-product using multiple outsourced parts. The end-product exhibits the "weakest-link" property, such that if any of its component parts fails, the end-product fails. The supplier of each component part can improve the (uncertain) quality of her parts by exerting costly effort that is unobservable to the manufacturer and is non-contractible. We analyze three possible contractual agreements between the manufacturer and suppliers: Acceptable Quality Level (AQL), Quality -Based Incentive Pricing (Q -Pricing) and Group Warranty. Under AQL, the manufacturer inspects all incoming parts, but establishes different quality thresholds and pays the suppliers different amounts for achieving the different thresholds. Under QPricing, the manufacturer also inspects all incoming parts but pays each supplier a constant amount for each good part. Under Group Warranty there is no testing of the individual parts; instead all suppliers are responsible for any failed end-product. We compare the efficiency of these three contractual arrangements as a function of the exogenous variables.

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“…Ulrich [4], one of the most referred to articles, defines a modular architecture as having a one-to-one mapping from functional elements to physical components and decoupled interfaces between components. However, both the allocation of functions to the modules and the interfaces has been neglected in the measures.…”

Section: Modular Design and Assemblabilitymentioning

confidence: 99%

“…A system is modular if it has standardized interfaces and the components perform one or very few functions. In effect, the coupling and dependency between components are minimal, and the components can be mixed, matched, and changed without compromising the overall functionality and integrity of the system [3,4,6,7].…”

Section: Introductionmentioning

confidence: 99%

“…In general, modularity is regarded as a design strategy for building and organizing complex systems effectively [2]. It is viewed as a relative property and depends on the degree to which the interfaces, interactions, or design rules of the system are standardized and the degree to which each product component has a clear, unique, and definite function within the system [3][4][5]. A system is modular if it has standardized interfaces and the components perform one or very few functions.…”

Section: Introductionmentioning

confidence: 99%

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Product, Organizational, and Performance Effects of Product Modularity

Boer

2014

Lecture Notes in Production Engineering

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A lot has been written about the performance effects associated with implementing a higher degree of product modularity in a firm's product portfolio. However, these findings are mostly based on case research in the electronics and automotive industries and have hardly been tested and generalized beyond these industries. To be able to establish whether firms not part of these industries would experience the same performance effects, survey research will be needed. To support future survey research, this paper proposes an operationalization of product modularity and details the link between product modularity and firm performance, to support the future development of measures and hypotheses.

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The role of product architecture in the manufacturing firm

Cited by 2,163 publications

References 15 publications

Beyond Product Architecture: Division of Labour and Competence Accumulation in Complex Product Development

Beyond Product Architecture: Division of Labour and Competence Accumulation in Complex Product Development

Procurement in Supply Chains When the End-Product Exhibits the 'Weakest Link' Property

Product, Organizational, and Performance Effects of Product Modularity

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