Modularity and the impact on new product development time performance : Investigating the moderating effects of supplier involvement and interfunctional integration

Purpose – The purpose of this paper is to analyze the impact of product modularity on new product development (NPD) time performance, and the moderating effects of interfunctional integration and supplier involvement on the product modularity‐time performance relationship. Design/methodology/approach – The paper analyzes data from a sample of 186 manufacturing plants settled in several countries, and operating in mechanical, electronic and transportation equipment sectors. Three hypotheses are tested through a hierarchical regression analysis. Findings – Data analyses show that product modularity has a direct positive effect on NPD time performance, and that interfunctional integration positively moderates the product modularity‐time performance relationship. Finally, this research does not support the hypothesis that a positive interaction effect exists between product modularity and supplier involvement. Research limitations/implications – Future research should replicate and extend the model to samples drawn from other industries. Moreover, analyses carried out provide some interesting directions for future research on the effect of supplier involvement on NPD time performance. Practical implications – The practical implication for managers is that NPD time performance reduction requires levering simultaneously on product modularity and interfunctional integration to foster their interaction, rather than investing and acting on product modularity only. In addition, before deciding to invest on product modularity, managers should ascertain the level of interfunctional integration. In fact, it acts as prerequisite for the successful implementation of product modularity. Originality/value – Empirical studies on the impact of product modularity on NPD time performance are really scant. This research empirically analyzes this effect, and contributes to the advancement of theory by investigating the effect of product modularity and integration practices in NPD in a comprehensive way.