“Integrating the Product Modularity Decision with Supply Chain Strategy” by Professor Glen M. Schmidt
Professor Glen M. Schmidt
avid Eccles Professor of Business
Department of Operations and Information Systems
University of Utah
Kamrad, Schmidt and Ulku (2017) provide a framework as to when products should be designed to be integral, modular-in-production, or modular-in-use. The type of modularity (if any) determines the product’s fan-out point (the point in the assembly process where the product fans out into the product variants that are offered to customers) and also has implications on the product’s push-pull point (the point in the assembly process where inventory is held waiting for a customer order or for purchase). In contrast, Van der Rhee, Schmidt and Tsai (2017) provide a framework for helping craft a supply chain strategy – that is, they offer a heuristic to determine where in the supply chain to hold inventory (before, at, and/or after the fan-out point), given the product modularity decision (i.e., given the fan-out point). We discuss the interaction of these two frameworks – that is, we begin to integrate the product modularity decision with the development of supply chain strategy.