Capturing the Degree of Modularity Embedded in Product Architectures*

This article focuses on integrating various perspectives on product architecture modularity into a general framework and proposes a way to measure the degree of modularization embedded in product architectures. The article addresses trade‐offs between modular and integral product architectures and how components and interfaces influence the degree of modularization. The article identifies the following key elements of product architecture modularity: components (standard and new‐to‐the‐firm), interfaces (standardization and specification), degree of coupling, and substitutability. A mathematical model, termed the modularization function, is applied to measure the key elements and their combined effect on the degree of modularization embedded in product architectures. The application of the modularization function is illustrated by two distinct sets of product architectures: Chrysler Jeep's windshield wipers controllers and Schindler's hydraulic and traction‐pull transmission elevators. The analysis of the Chrysler case shows that the silent‐relay architecture produces more opportunities for modularization than the solid‐state architecture due to the higher substitutability factor and lower new‐to‐the‐firm component composition. The Schindler case captures the dynamics of modularity created by three types of components (standard, customizable, and new to the firm) and two types of interfaces (fundamental and optional). Based on the case studies, the article outlines testable propositions and discusses the managerial and theoretical implications for the modularization function.