Assessing competitive manufacturing value of modular system design in uncertain and rapidly-changing complex technology product industries: A telecommunication scenario simulation

Modular system design is addressed in technology development, production and manufacturing research. Many advantages of modular design such as module reuse and replacement are well developed in the literature. Other advantages are more subtle, developing over several business cycles and relying on external events that are uncontrolled and uncertain. Senior executives managing technology are faced with complex decisions developing strategy for application of modularity. When do the advantages of modular system design outweigh the disadvantages of increased time, risk and expense? While a great deal is written on general advantages/disadvantages of modular system design the technology management literature treatment on appropriate use of modular system design is limited. Modularity strategic value is influenced by industry business, technology and product environments. This research provides empirical analysis of a telecommunication scenario using a decision support tool with Monte Carlo simulation and linear regression. Results indicate that study factors have significant impact on Net Present Value but tested interactions were not significant. A primary conclusion is that system design method has significant impact upon Net Present Value of the telecommunication system over the modeled analysis period.