SummaryThe focus of many European and American companies is currently on "modular"strategies in product design and production. A modular product has individualelements which are designed independently but function together as a seamless whole.In this article Mari Sako and Fiona Murray compare the experiences of thecomputer industry - where modularity was consumer led - with that of the automobileindustry where the impetus for adoption has come from cost and complexityreduction. They discuss the strategic choice between integration and modularisationfor original equipment manufacturers, note the changing role of suppliers, andconclude by describing recent research which highlights regional differences.The automobile industry has been the source of major strategic thinking throughoutthis century. Ford's moving assembly line, for example, first standardised work, whileTaiichi Ohno's Toyota Production System and, more recently, lean productiontechniques were important managerial innovations. The design, manufacture anddistribution of the automobile capture the key strategic challenges associated with acomplex and technologically sophisticated product with the result that companies inother sectors have sought inspiration and lessons. Now the focus of many Europeanand American manufacturers is on so-called modular strategies in product design andproduction. This article assesses the success of this new development and its value asa strategic weapon in the search for new sources of competitive advantage inmanufacturing industries.
