Modularised manufacturing

Modularised manufacturing (MM) is defined as the application of unit standardisation or substitution principles to product design, and production process design (Tu 1999; TuVonderembse, et al. 2004; Ulrich 1995). The practice of MM is grounded in

49 Simon’s modularity system perspective (1962) that every complex system can be decomposed into a hierarchy of subsystem modules that interrelate with each other. These modules are seen as units in a large system that is structurally independent of one another, but functionally integrated (Baldwin & Clark 2000). According to Schilling and Steensma (2001), systems will have higher degrees of modularity when their components can be disaggregated and recombined into new configurations with little loss of functionality. The concept of modularity was first introduced to manufacturing industries by Baldwin and Clark (1997). This involves the breaking down of complex products and processes into simpler parts so they can be managed independently and yet operate together as a whole (Mikkola & Larsen 2004).

Although the concept of modularity is not new to manufacturing practitioners, it has drawn much greater research attention recently due to its definitive advantage in coping with an increasingly turbulent manufacturing environment (Kun et al. 2010). Increasingly, literature has emphasised the importance of MM to enhance dynamic capability development (Henk & Tom 2004; Teece et al. 1997). Studies have suggested utilising MM as the key operational tool for business management to cope with rapidly changing customer requirements and increasing technical complexity (Langlois 2002; Sanchez & Mahoney 1996). MM enables an organisation’s capabilities to create new system configurations by recombining new or existing independent components into new ones that better match the environment (Baldwin & Clark 1997; Erik de et al. 2012; Paul & Omar 2011).

MM is established where the unit commonality is thoroughly applied to achieve modularity both in product and production process design (Tu 1999; TuVonderembse, et al. 2004; Ulrich 1995). Despite this notion, the extant literature does not address whether modularity in products versus process is more important (Jacobs et al. 2011). While some

50 researchers made a compelling case for product modularity (Galvin & Morkel 2001; Kusiak 2002; Teece 1986), other has equally supported the importance of process modularity design (Cleveland et al. 1989; Narasimhana et al. 2006; Schmenner & Vastag 2006; Spear & Bowen 1999; Vickery et al. 1993). Jacob et al. (2011) noted that product modularity may drive process modularity by which a firm configures its production process to match product architecture. Likewise, Duray et al. (2000) suggested that the variety of potential models may motivate the use of modular process technologies such as a flexible manufacturing system. On the other hand, Bowen et al. (1989) suggested that the implementation of MM through both product and process modularity elicits benefits for both customers and manufacturers. For customers, modular products are much easier to customise, upgrade and repair and thus have greater usability and serviceability. For manufacturers, modularity enables them to handle increasingly complex technology by breaking up a product into modules, allowing designers and producers to be flexible in their tasks (Baldwin & Clark 1997). Based on these arguments, in this study, two categories of MM were, therefore, identified and quantified; product modularity (PM) and process modularity (PRM).

3.3.2.1 Product Modularity

Product modularity (PM) refers to ‘the use of standardised product modules that can be easily assembled and reassembled into different functional forms’ (TuVonderembse, et al. 2004, p. 151). PM implies a degree of independence among individual modules (Bi & Zhang 2001; Huang & Kusiak 1998). Through PM, a product is viewed simply as the building blocks of interchangeable separate modules making it possible to create a wide variety of products using a limited number of modules (Khalaf et al. 2011). The literature supports the use of PM to divide the key components into common part segments to allow the component modules to be shared across different product lines (Yang et al. 2007). Ulrich and Tung

51 (1991) also defined several types of product modularity, including component swapping (different components are paired with the same basic product), mix modularity (mix different modules to form a new product) and bus modularity (new options can be added to a standard base by attaching new modules). An effective architecture is created when the interfaces between functional components are standardised and specified to allow the substitution of a range of components without requiring changes in the design of other components (Garud & Kumaraswamy 1995; Sanchez & Collins 2001; Sanchez & Mahoney 1996). For a firm pursuing MM, PM is crucial to efficiently manage a complex product to be built from smaller subsystems that are designed independently yet function together as a whole (Baldwin & Clark 1997).

3.3.2.2 Process Modularity

Process modularity (PRM) is ‘the extent to which the focal enterprise’s manufacturing processes can be decomposed into loosely coupled sub-processes that communicate through standardised interfaces’ (TuVonderembse, et al. 2004, p. 151). PRM includes the practice of standardising manufacturing process modules, so that they can be re-sequenced easily or new modules can be added quickly in response to changing product requirements (TuVonderembse, et al. 2004). Not limited to production processes alone, PRM incorporates adaptable and reconfigurable tooling and routing into production operations with little loss in functionality (Jacobs et al. 2011). The literature suggested that process modularity is based on process standardisation: breaking down the process into standard sub-processes that produce standard base units and customisation sub-processes; process re-sequencing: reordering the sub-processes so that standard sub-processes occur first; and process postponement: postponing customisation sub-processes until a customer order is received (Feitzinger & Lee 1997; Pine 1993a). PRM is essential to enable MM by facilitating the production of a wide range of products within a family by utilising self-contained and independent cells of the

52 prior or subsequent transformation processes (Pine 1993b; Pine et al. 1993; Schilling & Steensma 2001) At the system level, the production operations occurring within a cell for a given family of components can be easily plugged and unplugged to form a new product model (Fine et al. 2005). More manufacturers are starting to use modular assembly lines where workstations and conveyor units can be added, removed, or rearranged to create different process capabilities (Cooper 1999; Hoogeweegen et al. 1999).