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Modularization in the Auto Industry: Interlinked Multiple Hierarchies of Product, Production, and Supplier Systems

Author

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  • Akira Takeishi

    (Institute of Innovation Research, Hitotsubashi University)

  • Takahiro Fujimoto

    (Faculty of Economics, Universtiy of Tokyo)

Abstract

This paper analyzes the modularization in the world auto industry. The modularization in the industry has involved architectural changes in product, production, and supplier systems with each region (Japan, Europe and the U.S.A.) emphasizing different purposes and aspects. As an attempt to understand such multi-faceted, complex processes coherently, this paper proposes a conceptual framework that sees development / production activities as interlinked, multiple hierarchies of products, processes, and inter-firm boundaries. With this framework, drawing on case studies and questionnaire survey data, the paper examines the on-going processes of modularization in the industry. It is argued that tensions exist among the three hierarchies, and such tensions may lead to further changes in product, production and supplier-system architectures in the auto industry, in a dynamic and path-dependent manner.

Suggested Citation

  • Akira Takeishi & Takahiro Fujimoto, 2001. "Modularization in the Auto Industry: Interlinked Multiple Hierarchies of Product, Production, and Supplier Systems," CIRJE F-Series CIRJE-F-107, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2001cf107
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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2001/2001cf107.pdf
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    References listed on IDEAS

    as
    1. Carliss Y. Baldwin & Kim B. Clark, 2000. "Design Rules, Volume 1: The Power of Modularity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262024667, December.
    2. Langlois, Richard N. & Robertson, Paul L., 1992. "Networks and innovation in a modular system: Lessons from the microcomputer and stereo component industries," Research Policy, Elsevier, vol. 21(4), pages 297-313, August.
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    Cited by:

    1. Jürgens, Ulrich & Sablowski, Thomas, 2008. "Sektorale Innovationsprozesse und die Diskussion über deutsche Innovationsschwächen," Study / edition der Hans-Böckler-Stiftung, Hans-Böckler-Stiftung, Düsseldorf, volume 127, number 204, June.
    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. Trott, Paul & Simms, Chris, 2017. "An examination of product innovation in low- and medium-technology industries: Cases from the UK packaged food sector," Research Policy, Elsevier, vol. 46(3), pages 605-623.
    5. Contreras, Oscar F. & Carrillo, Jorge & Alonso, Jorge, 2012. "Local Entrepreneurship within Global Value Chains: A Case Study in the Mexican Automotive Industry," World Development, Elsevier, vol. 40(5), pages 1013-1023.
    6. Stefano Brusoni & Lorenzo Cassi & Simge Tuna, 2021. "Knowledge integration between technical change and strategy making," Journal of Evolutionary Economics, Springer, vol. 31(5), pages 1521-1552, November.
    7. Frédéric Mazaud, 2006. "De la firme sous-traitante de premier rang à la firme pivot. Une mutation de l'organisation du système productif « Airbus »," Revue d'économie industrielle, De Boeck Université, vol. 0(1), pages 3-3.
    8. Motohashi, Kazuyuki & Yuan, Yuan, 2010. "Productivity impact of technology spillover from multinationals to local firms: Comparing China's automobile and electronics industries," Research Policy, Elsevier, vol. 39(6), pages 790-798, July.
    9. Patarapong INTERAKUMNERD & Kriengkrai TECHAKANONT, 2015. "Intra-industry Trade, Product Fragment," Working Papers DP-2015-10, Economic Research Institute for ASEAN and East Asia (ERIA).
    10. MAZAUD Frédéric (LEREPS-GRES), 2006. "Change of the First Tier Supplier function and Pivot Firm, the case of the productive organization Airbus (In French)," Cahiers du GRES (2002-2009) 2006-12, Groupement de Recherches Economiques et Sociales.
    11. Gábor Túry, 2018. "Consequences Of Technological Changes In The Automotive Industry – Perspectives Of The Central European Region As Part Of The Global Value Chains," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 6(2), pages 82-94, December.
    12. repec:era:wpaper:dp-2015-73 is not listed on IDEAS
    13. Jürgens, Ulrich, 2003. "Characteristics of the European automotive system: Is there a distinctive European approach?," Discussion Papers, Research Unit: Knowledge, Production Systems and Work SP III 2003-301, WZB Berlin Social Science Center.
    14. Matsuo, Hirofumi, 2015. "Implications of the Tohoku earthquake for Toyota׳s coordination mechanism: Supply chain disruption of automotive semiconductors," International Journal of Production Economics, Elsevier, vol. 161(C), pages 217-227.
    15. Andoni Maiza & Ricardo Bustillo, 2018. "Analysis of the relevance of China’s development for main European automotive manufacturing countries," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(3), pages 403-424, September.
    16. Nicholas Argyres & Lyda Bigelow, 2010. "Innovation, Modularity, and Vertical Deintegration: Evidence from the Early U.S. Auto Industry," Organization Science, INFORMS, vol. 21(4), pages 842-853, August.
    17. Luo, Jianxi & Triulzi, Giorgio, 2018. "Cyclic dependence, vertical integration, and innovation: The case of Japanese electronics sector in the 1990s," Technological Forecasting and Social Change, Elsevier, vol. 132(C), pages 46-55.
    18. Nepal, Bimal & Monplaisir, Leslie & Famuyiwa, Oluwafemi, 2012. "Matching product architecture with supply chain design," European Journal of Operational Research, Elsevier, vol. 216(2), pages 312-325.
    19. MOTOHASHI Kazuyuki & YUAN Yuan, 2009. "Technology Spillovers from Multinationals to Local Firms: Evidence from Automobile and Electronics Firms in China," Discussion papers 09005, Research Institute of Economy, Trade and Industry (RIETI).
    20. Staeblein, Thomas & Aoki, Katsuki, 2015. "Planning and scheduling in the automotive industry: A comparison of industrial practice at German and Japanese makers," International Journal of Production Economics, Elsevier, vol. 162(C), pages 258-272.
    21. Frédéric MAZAUD (LEREPS-GRES) & Marie LAGASSE (AIRBUS-FRANCE), 2007. "Vertical sub-contracting relationships strategy, the Airbus First-tier suppliers\' coordination," Cahiers du GRES (2002-2009) 2007-02, Groupement de Recherches Economiques et Sociales.
    22. Navindran Davendralingam & Cesare Guariniello & Shashank Tamaskar & Daniel DeLaurentis & Mitchell Kerman, 2019. "Modularity research to guide MOSA implementation," The Journal of Defense Modeling and Simulation, , vol. 16(4), pages 389-401, October.
    23. Luo, Jianxi, 2018. "Architecture and evolvability of innovation ecosystems," Technological Forecasting and Social Change, Elsevier, vol. 136(C), pages 132-144.

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