Online from: 1980
Subject Area: Operations and Logistics Management
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|Title:||Modularization and the impact on supply relationships|
|Author(s):||Mickey Howard, (Operations and Supply Group, School of Management, University of Bath, Bath, UK), Brian Squire, (Decision Sciences and Operations Management Group, Manchester Business School, The University of Manchester, Manchester, UK)|
|Citation:||Mickey Howard, Brian Squire, (2007) "Modularization and the impact on supply relationships", International Journal of Operations & Production Management, Vol. 27 Iss: 11, pp.1192 - 1212|
|Keywords:||Economic cooperation, Product specification, Supplier relations|
|Article type:||Research paper|
|DOI:||10.1108/01443570710830593 (Permanent URL)|
|Publisher:||Emerald Group Publishing Limited|
Purpose – This paper aims to examine the role of product architecture in supply chain design. Specifically, it seeks to resolve confusion over the impact of modularisation on supplier relationship management. On the one hand, the introduction of modularisation suggests that buyer and supplier firms should move towards greater collaboration in order to co-develop products and reduce interface constraints. On the other hand, the standardisation of interfaces suggests that buyer firms could introduce a “black box” approach to component design, holding suppliers at arm's-length and reducing dependence. These conflicting views form the focus of the research: under what conditions does modularity lead to increasing collaboration?
Design/methodology/approach – The data are drawn from UK manufacturing firms across eight industry sectors using a sample from the Conquest Business Media database. Three hypotheses are tested through a three-step hierarchical regression analysis.
Findings – The findings provide support for the notion that product modularization will lead to greater levels of buyer-supplier collaboration, but that this relationship is mediated by relationship-specific assets and information sharing.
Originality/value – The paper supports the argument that modularised components require collaborative sourcing practices in order to co-develop products and reduce interface constraints. This suggests that outsourcing requires a high level of integration, creating dependencies between firms representing considerable investment in equipment and sharing through proprietary information systems. As interest in build-to-order supply chains and flexible product architecture grows; this emphasizes the importance of specifying the exact nature of relationship processes without stifling product innovation.
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