The relationship among modularity, functional coordination, and mass customization : Implications for competitiveness

Purpose – The purpose of this paper is to investigate how product modularity (PM) is related to mass customization (MC) capability and plant competitiveness. Design/methodology/approach – The paper tests hypothesized relationships using structural equation modeling with an international dataset. Findings – PM is not directly related to plant competitiveness. Inter‐functional design coordination (IDC) is found to be critical in fostering plant competitiveness. Practical implications – Managers need to put IDC mechanisms in place to foster MC capabilities and, thereby, enhance plant competitiveness. Originality/value – While the existing literature mostly argues for a direct relationship between PM and competitiveness, the paper shows that IDC and MC capability are crucial intervening variables in this relationship.