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The purpose of this paper is to identify integrated solutions business as the first generation of servitized offerings and modular solution offerings as the second development phase in servitization of original equipment manufacturers. This study examines how the servitized manufacturer, Kone, moves from integrated solutions to modular solutions business and develops the requisite capabilities to design, produce and implement modular solution offerings.

The paper reports a longitudinal case study of a provider of integrated solutions installed in buildings. During the ten years studied, the manufacturer implemented a strategic initiative to modularize its integrated solutions offering.

The firm’s transition to modular solutions progressed through three major capability development phases: solutions based on ad hoc integration, smart solutions based on modular design and through-chain modularity. The modular structure aims at fostering the efficiency of the solution offering and the associated production system.

Leveraging the benefits of modularity calls for an aligned combination of strategic, operational and technical capabilities contributing to the integration of resources in a modular production system for the solution providers’ competitive performance.

The study reports how a solution provider can develop the operational capabilities to integrate the core and peripheral components into the solution, and orchestrate the modular production system.

This study is a rare longitudinal analysis of how a manufacturer builds a modular offering, the solution platform and the required competitive capabilities to provide the solution.

In this paper we appraise the ways in which use of closed-system proprietary product architectures versus open-system modular product architectures is likely to influence the dynamics and trajectory of new product market formation. We compare the evolutions of new markets in China for gas-powered two-wheeled vehicles (G2WVs) based (initially) on closed-system proprietary architectures and for electric-powered two-wheeled vehicles (E2WVs) based on open-system modular architectures. We draw on this comparison to suggest ways in which the use of the two different kinds of architectures as the basis for new kinds of products may result in very different patterns and speeds of new market formation. We then suggest some key implications of the different dynamics of market formation associated with open-system modular architectures for both the competence-based strategic management (CBSM) of firms and for technology and economic development policies of governments.

Specifically, we suggest how the use of open-system modular product architectures as the basis for new products is likely to result in dynamics of new market formation that call for new approaches to the strategic management of innovation and product creation. We also suggest technology and economic development policies favoring use of open-system modular architectures may stimulate new market formation and related economic development by providing platforms for accelerating technology development and dissemination, facilitating the formation of an industrial base of assemblers and component suppliers, assisting new firms in building customer relationships, enabling more geographically diffused economic development within countries, and facilitating development of export markets. We also suggest directions for further research into the potential for open-system modular product architectures to enable bottom-of-the-pyramid innovation processes, frugal engineering in developing economies, and development of low-cost product variations more generally.

Modularity has been identified as one of the most important methods for achieving mass customization. However, service models that apply varying levels of modularity and customization also exist and are appropriate for various business situations. The objective of this paper is to introduce a framework with which different customer service offerings, service production processes, and service production networks can be analyzed in terms of both modularity and customization.

The paper builds theory and offers a systematic approach for analyzing service modularity and customization. To illustrate the dimensions of the framework, the authors also provide service examples of the various aspects.

In the previous literature, the concepts of modularity and customization have often been discussed in an intertwined manner. The authors find that when modularity and customization are regarded as two separate dimensions, and different perspectives– such as the service offering, the service production process, and the service production network – are combined we can create a useful framework for analysis.

Rigorous testing is a subject for future research.

The framework helps companies to analyze their service offerings and to compare themselves with other companies. It seems that in practice many combinations of modularity and customization levels are used in the three perspectives.

This paper develops a framework for analyzing service offerings in terms of modularity and customization. The framework provides a basis for analyzing different combinations of these two aspects from the three perspectives, and herein lies its value.

The purpose of this paper is to update an article written by the author in the Harvard Business Review almost 50 years ago.

The paper evaluates the present status of the phenomena of modularity (for both product and service components). This is done by reviewing all existing literature on multitudinous facets of the subject and discussing applications with practitioners.

Modularity remains a splintered concept, perhaps because so many different types of application exist. Heterogeneity stymies systemization. Nevertheless, successful applications exist. This International Journal of Operations & Production Management, dedicated to modularity, testifies to significant facets of accomplishment and continued challenges (e.g. optimum shoe sizing and modular construction). Also, production managers have not become boardroom planners (as was expected 45 years ago). Potential cost savings of modularity do not occur because off‐shoring provided another way to dramatically lower production costs – albeit at the expense of quality problems.

All management functions participate in modularity issues. Though marketing does not thrive in a commodity‐environment, it has not advocated modularity as a way to offset commoditization nor as a means of improving quality. Finance has been the cheer leader for off‐shore decisions, but a tipping point may be in sight (i.e. recognizing the hidden costs of off‐shore seduction).

If mass customization, using modularity, develops economic clout, it is likely that production will switch from overseas to domestic bases. The impact on domestic economies will be significant.

The link between modularity and off‐shoring needs to be recognized, researched, and discussed.

This paper aims to investigate one crucial aspect and inherent difficulty of modular assembly systems, which is how the dispersed activities, resources and organizational units are coordinated with one another and the corresponding effects.

The paper is based on a subset of the data collected during a four‐year case study of Volvo Car Corporation's modular assembly system. For this particular paper, 15 semi‐structured interviews were conducted with representatives from different functions related to both pre‐ and final assembly activities.

The paper concludes that the efficiency of a modular assembly system is dependent on the use of several coordination mechanisms, such as the use of plans, standardization and mutual adjustment. The efficiency‐related rationales of activity synchronization, resource sharing, and activity and resource development can then be achieved. These mechanisms should cross the boundaries of the organizational units performing pre‐ and final assembly activities. The efficiency of a modular assembly system thus relies on an integral coordination pattern.

The findings are mainly relevant for companies which design and produce complex products involving several technologies, and which use company‐specific module interfaces.

The importance of using a variety of mechanisms for coordinating activities in modular assembly systems is highlighted. The paper also shows what effects can be obtained by using several coordination mechanisms. For practitioners, the detailed case description may also provide valuable reference material.

The paper highlights how efficiency of a modular assembly system can be achieved through the planning and use of several mechanisms when designing and operating it.

The purpose of this paper is to show how modularity manifests in a service context, more specifically in the provision of care and services to independently living elderly.

Four case studies provide insight into the specification of relevant components and their subsequent assembly into a customized package of care and services.

In all cases, component specification and package construction take place in two phases: partly before and partly during care delivery. Early client involvement allows for a combination of standard components that have a lower level of customization, whereas late client involvement allows for adaptation of these components resulting in a higher level of customization. The paper proposes that modularity theory should distinguish between the creation of modular offerings in care provision versus their creation in goods production, since the findings are the exact reverse of the state‐of‐the art knowledge in manufacturing modularity.

The empirical part of this paper is limited to providers of elderly care and services in The Netherlands and is exploratory in nature. However, the newness of care and service modularity justifies the exploratory research approach.

This paper offers elderly care organizations in‐depth understanding of their complex and multi‐faceted specification process. The insights help both care and service providers to make well‐considered decisions as to what level of client involvement to allow and the type of modularity to apply.

This paper contributes to the emerging literature on service modularity.

Modularity promises to relieve problems of complexity in service systems. However, limited evidence exists of its application in specialized hospital services. The purpose of this paper is to identify enablers, constraints, and outcomes of modularization in specialized hospital services.

A qualitative comparative study of a hematology unit with modular service architecture and an oncology unit with integral service architecture in a university hospital is performed to analyze the service architectures, enablers and constraints of modularization, and outcomes.

A framework and five propositions combining the characteristics of specialized hospital services, enabling activities, and outcomes of modularization were developed. Modular service architecture was developed through limiting the number of treatment components, reorganizing production of standardized components into a separate service unit, and standardizing communication and scheduling in interfaces. Modularization increased service efficiency but diluted ownership of services, decreased customization, and diminished informal communication. This is explained by the specific characteristics of the services: fragmented service delivery, professional autonomy, hierarchy, information asymmetry, and requirement to treat all.

Modularization can increase efficiency in specialized hospital services. However, specific characteristics of specialized care may challenge its application and limit its outcomes.

The study identifies enabling activities and constraints that hospital managers should take into account when developing modular service systems.

This is the first empirical study exploring the enablers, constraints, and outcomes of modularization in specialized hospital services. The study complements literature on service modularity with reference to specialized hospital services.

The purpose of this paper is to systematically review the extant literature on the relationship between product architectures and supply chain design to identify gaps in the literature and identify future research opportunities.

This paper examines the peer-reviewed literature on product architectures and supply chain written in English. The search strategy is based on selected databases and keywords. In total, 56 articles from 1995 to 2013 were identified.

Three key dimensions are identified for the categorization of the literature: the type of product architecture, the type of supply chain and the research methodology. Furthermore, we identify themes related to outsourcing, supplier selection, supplier relationships, distance from focal firm and alignment.

The present search strategy may have missed some references that are related to the area. However, as a counter-measure, we used back-tracking and forward-tracking to identify additional relevant papers. A research agenda is proposed for further research on the interaction of product architectures and supply chain design.

This paper is, to the best of the authors’ knowledge, the first broad review that investigates the interrelationship between product architectures and supply chain design.

Describes a model of a hierarchical planning system to provide a comprehensive approach to the complex production planning and scheduling problem. The model supplies a link between long‐term and short‐term planning; the three tiers of the hierarchy implement: long‐term inventory planning on a cost minimization basis; shorter‐term production planning; and daily sequencing. Emphasizes efficient processing and transmission of information.

Market turbulence drives assembly plants to constantly adjust their production volume of products, variants and quantities. At the same time, the assembly plant managers must protect the long‐term investments in the flexible assembly system. The best solution is the modular approach, which gives managers possibilities to adjust volume by adding new modules or to automate the manual system step by step. To keep flexibility, the combination of intelligent pallet, i.e. use of escort memory, and individual product together with other hardware providing paperless production supports even lot size one.