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Interesting because - As firms face various customer needs and requirements for personalized and interactive products in the era of mass customization and digital transformation, the concept of product modularization has gained attention. Product modularization provides many advantages, such as allowing firms to increase productivity and efficiency and provide more customized products to their customers. Studies have shown that new product development processes benefit from product modularization, but these studies are limited in explaining the mechanisms underlying it. This study explains the mechanisms that connect product modularization and new product development processes.
Theoretical value - The study found that R&D outsourcing, driven by product modularity, enhances the efficiency of new product development by leveraging the benefits of product modularization. The effectiveness of product modularization is heightened when coupled with a higher level of trust in suppliers' competency.
Practical value - Companies that strive to efficiently meet customer demands with new products must grasp their product architecture and proactively embrace modular strategies throughout the product development phase. Companies that possess high levels of product modularization can enhance new product development (NPD) efficiency by engaging in R&D outsourcing. They can leverage the specialization and economies of scale offered by dedicated suppliers. This not only reduces transaction costs but also provides greater flexibility. It is crucial for companies to establish trust-based relationships with their suppliers. This is essential for the effective implementation of modular strategies and the successful integration of R&D outsourcing into their NPD processes.
1. Introduction
The growing complexity of technologies and the shorter product life cycles, coupled with the globalization of markets and the presence of aggressive foreign competitors, are compelling firms to reassess their strategic thinking (Hsuan, 1999). The concept of product modularization has emerged and gained much attention from both academicians and practitioners as firms face various customer needs and requirements for personalized and interactive products in the era of mass customization and digital transformation (Asan et al., 2004; Baldwin and Clark, 2000; Helfat and Eisenhardt, 2004; Magnusson and Pasche, 2014; Sanchez and Mahoney, 1996; Ulrich and Tung, 1991; Wang et al., 2022). Product modularization creates product variety by flexibly recombining modules using standardized interfaces (Bask et al., 2010; Magnusson and Pasche, 2014), allowing firms to increase...