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Modularisation and outsourcing: who drives whom? A study of generational sequences in the US automotive cockpit industry

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  • Sebastian K. Fixson
  • Young Ro
  • Jeffrey K. Liker

Abstract

In this paper, we study the interactions between modularity and outsourcing in the auto industry. Focusing on vehicle cockpit projects in North America, we collect data over three product architecture generations and the associated shifts in firm boundaries for multiple processes covering product development and production. We find that the direction of influence between product architecture and firm boundary varies across individual processes and over time, resulting in a zig-zag path towards higher levels of modularity and outsourcing over the observed timeframe. The relative strength of the factors that drive these changes appears to be dependent on (a) idiosyncrasies of the logic of individual processes, i.e., their cost structure, their perceived strategic value, and the capabilities available in the supply chain for their completion, and on (b) the relevance and relative weight of external factors such as labour costs, capital cost, and external development of technologies.

Suggested Citation

  • Sebastian K. Fixson & Young Ro & Jeffrey K. Liker, 2005. "Modularisation and outsourcing: who drives whom? A study of generational sequences in the US automotive cockpit industry," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 5(2), pages 166-183.
    • Handle: RePEc:ids:ijatma:v:5:y:2005:i:2:p:166-183
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    Citations

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    Cited by:

    1. Fixson, Sebastian K. & Park, Jin-Kyu, 2007. "The Power of Integrality: Linkages between Product Architecture, Innovation, and Industry Structure," Working papers 37154, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    2. Anna Cabigiosu, 2018. "When do modular dominant designs emerge? A theoretical framework," Working Papers 05, Department of Management, Università Ca' Foscari Venezia.
    3. Hua Wang, 2008. "Innovation in product architecture—A study of the Chinese automobile industry," Asia Pacific Journal of Management, Springer, vol. 25(3), pages 509-535, September.
    4. Seyoum, Belay & Lian, Yunshan, 2018. "Market performance implications of modularization: Evidence from global auto firms operating in China," International Business Review, Elsevier, vol. 27(4), pages 852-866.
    5. Han, Chaodong & Porterfield, Tobin & Li, Xiaolin, 2012. "Impact of industry competition on contract manufacturing: An empirical study of U.S. manufacturers," International Journal of Production Economics, Elsevier, vol. 138(1), pages 159-169.
    6. Fixson, Sebastian K. & Park, Jin-Kyu, 2008. "The power of integrality: Linkages between product architecture, innovation, and industry structure," Research Policy, Elsevier, vol. 37(8), pages 1296-1316, September.

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