Does modularity reduce innovation?

17 May 2011 Sandeep Mehta

The Journal for Product Innovation Management had an interesting article on The Impact of Product Modularity on New Product Performance.  We recently discussed the benefits of modularity to combat component shortages (Impact of component shortages on R&D).  The article points out that modular design may have an impact on innovation.  Availability of a large number of alternate modules allows designers to try multiple alternate solutions and select the best alternate:

In light of problem solving, system complexity, and dominant design theories, some researchers suggest that modular product design promotes product innovation through experimenting with many alternative approaches simultaneously. This leads to rapid trial-and-error learning and accelerates new product introduction. 

The problem with modularity is that it requires compatibility and limits the solution space because modules need to fit together.  Also, if a module is fulfilling 80% of the requirements is available, designers may not push for the rest and hence not be as innovative.

However, others argue that modular product design inhibits innovation because common modules can be overly reused, the degree of freedom for innovation is limited due to module compatibility, and knowledge sharing among module teams is weakened.

The paper has results based on a survey of 115 electronics companies that suggest that the relationship between modularity and innovation is indirect.  The main recommendation is for R&D managers to be vigilant and monitor the negative impacts of modularity.  One red flag may be too many alternate configurations.  Another key concern is communication across different module R&D teams.

If there are any signs of diminishing product innovativeness, problems with poor communication across module teams, or excessive design alternatives, the manufacturers should stop further modularizing their products. Alternatively, manufacturers can take steps to reduce the negative effects of modularity. For instance, manufacturers can develop ways to strengthen communication among module teams. They can also use a set of design rules to reduce the number of design alternatives systematically or a design method to balance product commonality and differentiation during the development processes.

It is clear that as R&D becomes more modular, R&D teams for each module will become less engaged with other teams and more virtual.  We have discussed several approaches to boost productivity or drive satisfaction in virtual teams.  We could also try project networks to enhance communication.

Article first published as Does modularity reduce innovation? on Technorati.

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