Diffusion and Performance of Modular Production in the U.S. Apparel Industry

This paper examines the determinants of the diffusion of team production systems (modular assembly) and the impact of these systems on firm performance relative to traditional assembly systems in the apparel industry. The paper draws on an extensive survey providing detailed information on a wide range of manufacturing practices and retail relationships in the U.S. apparel industry. We find that recent diffusion of modular practices is driven primarily by forces in the product market rather than from human resource-related factors. We also show that the low level of diffusion of team production systems can be explained by the small impact of modular systems relative to other manufacturing innovations (particularly those in information systems)