Managing continuous improvement by product modularization

Paper in proceeding, 2013

The purpose of this paper is to investigate how a company’s ability for continuous improvement is affected by product modularization. Modularization facilitates product improvements defined to a specific module. However, the ability to work with manufacturing improvements becomes more difficult if the modules are manufactured by external suppliers. The improvement work must be transformed and focused on more innovative rather than incremental changes. This is also confirmed by the case study done for this paper at a multinational company relying heavily on external suppliers. In the case study we could also identify how the company handles this situation by using different intermediaries, for instance a design support group, that coordinate designers and suppliers when improvement issues are raised. Designers’ manufacturing competence is essential not only to get a good design result, but also for designers’ ability to understand improvement issues emanating from customers’ and suppliers’ needs. By dual sourcing the company could differentiate the level of collaboration and get closeness with some suppliers, providing the designers updated manufacturing skills.