Modularity and Delayed Product Differentiation in Assemble-to-Order Systems

Analysis and Extensions from a Complexity Perspective
  • Thorsten Blecker
  • Nizar Abdelkafi
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 87)


The paper assumes a product design around modular architectures and discusses the suitability of the principle of delayed product differentiation in assemble-to-order environments. We demonstrate that this principle does not enable one to make optimal decisions concerning how variety should proliferate in the assembly process. Therefore, we propose to complement this principle in that we additionally consider the variety induced complexity throughout the assembly process. The weighted Shannon entropy is proposed as a measure for the evaluation of this complexity. Our results show that the delayed product differentiation principle is reliable when the selection probabilities of module variants at each assembly stage are equal and the pace at which value is added in the whole assembly process is constant. Otherwise, the proposed measure provides different results. Furthermore, the entropy measure provides interesting clues concerning eventual reversals of assembly sequences and supports decisions regarding what modules in an assembly stage could be substituted by a common module.

Key words

Modularity delayed product differentiation complexity weighted Shannon entropy 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Alderson, Wroe (1950): Marketing efficiency and the principle of postponement, Cost and Profit Outlook, Vol. 3, pp. 15–18.Google Scholar
  2. Ashby, Ross, W. (1957): An Introduction to cybernetics, 2nd Edition, London: Chapman & Hall LTD 1957.Google Scholar
  3. Baldwin, Carliss Y. / Clark, Kim B. (2003a): Managing in an Age of Modularity, in: Raghu Garud / Arun Kumaraswamy / Richard N. Langlois (Eds.): Managing in the Modular Age — Architectures, Networks, and Organizations, Malden et al.: Blackwell Publishing 2003, pp. 149–171.Google Scholar
  4. Bertalanffy, Ludwig V. (1976): General Systems Theory, Revised Edition, New York: George Braziller 1976.Google Scholar
  5. Blecker, Thorsten / Friedrich, Gerhard / Kaluza, Bernd / Abdclkafi, Nizar / Kreutler, Gerold (2005). Information and Management Systems for Product Customization, Boston et al.: Springer, 2005.Google Scholar
  6. Bucklin, Louis P. (1965): Postponement, speculation and the Structure of Distribution Channels, Journal of marketing research, Vol. 2, No. 1, pp. 26–31.CrossRefGoogle Scholar
  7. Christopher, Martin (2005): Logistics and Supply Chain Management — Creating Value-Adding Networks, 3rd Edition, Harlow et al: Prentice Hall 2005.Google Scholar
  8. Duray, Rebecca / Ward, Peter T. / Milligan, Glenn W. / Berry, William L. (2000): Approaches to mass customization: configurations and empirical validation, Journal of Operations Management, Vol. 18, No. 6, pp. 605–625.CrossRefGoogle Scholar
  9. Ericsson, Anna / Erixon, Gunnar (1999): Controlling Design Variants: Modular Product Platforms, Dearborn/Michigan: Society of Manufacturing Engineers 1999.Google Scholar
  10. Feynman, Richard P. (1991): Vorlesungen über Physik, vol. 1, München / Wien: Oldenburg 1991.Google Scholar
  11. Garud, Raghu / Kumaraswamy, Arun (2003): Technological and Organizational Designs for Realizing Economies of Substitution, in: Raghu Garud / Arun Kumaraswamy / Richard N. Langlois (Eds.): Managing in the Modular Age — Architectures, Networks, and Organizations, Malden et al.: Blackwell Publishing 2003, pp. 45–77.Google Scholar
  12. Klir, George J. / Folger, Tina A. (1988): Fuzzy Sets, Uncertainty, and Information, New Jersey: Prentice Hall, Englewood Cliffs 1988.Google Scholar
  13. Lampel, Joseph / Mintzberg, Henry (1996): Customizing Customization, Sloan Management Review, Vol. 38, No. 1, pp. 21–30.Google Scholar
  14. Lee, Hau L. (1996): Effective Inventory and Service Management through Product and Process Redesign, Operations Research, Vol. 44, No. 1, pp. 151–159.zbMATHCrossRefGoogle Scholar
  15. Lee, Hau, L. / Tang, Christopher S. (1997): Modelling the Costs and Benefits of Delayed product Differentiation, Management Science, Vol. 43, No. 1, pp. 40–53zbMATHGoogle Scholar
  16. Maroni, Dirk (2001): Produktionsplanung und-steuerung bei Variantenfertigung, Frankfurt am Main et al.: Peter Lang 2001.Google Scholar
  17. Martin, Mark V. / Ishii, Kosuke (1996): Design For Variety: A Methodology For Understanding the Costs of Product Proliferation, Proceedings of The 1996 ASME Design Engineering Technical Conferences and Computers in Engineering Conference, California, August 18–22, 1996, URL: (Retrieval: April 01, 2005).Google Scholar
  18. Martin, Mark V. / Ishii, Kosuke (1997): Design For Variety: Development of Complexity Indices and Design Charts, Proceedings of DETC’97, 1997 ASME Design Engineering Technical Conferences, Sacramento, September 14–17, 1997, URL: (Retrieval: April 01, 2005).Google Scholar
  19. Pine II, B. Joseph (1993): Mass Customization: The New Frontier in Business Competition, Boston, Massachusetts: Harvard Business School Press 1993.Google Scholar
  20. Schilling, Melissa A. (2003): Toward a General Modular Systems Theory and its Application to Interfirm Product Modularity, in: Raghu Garud / Arun Kumaraswamy / Richard N. Langlois (Eds.): Managing in the Modular Age — Architectures, Networks, and Organizations, Malden et al.: Blackwell Publishing 2003, pp. 172–214.Google Scholar
  21. Shannon, Claude E. (1948): A Mathematical Theory of Communication, The Bell System Technical Journal, Vol. 27, pp. 379–423.MathSciNetGoogle Scholar
  22. Sharman, G. (1984): The rediscovery of logistics. Harvard Business Review, Vol. 62, No. 5, pp. 119–126.Google Scholar
  23. Sivadasan, Suja / Efstathiou, Janet / Calinescu, Ani / Huaccho Huatuco Luisa.: Advances on measuring the operational complexity of supplier-customer systems, European Journal of Operational Research (Article in Press).Google Scholar
  24. Ulrich, Karl (1995): The role of product architecture in the manufacturing firm, Research Policy, Vol. 24, No. 3, pp. 419–440.MathSciNetCrossRefGoogle Scholar
  25. Van Hoek, Remko I. (1997): Postponed manufacturing: a case study in the food supply chain, Supply Chain Management, Vol. 2, No. 2, pp. 63–75.CrossRefGoogle Scholar
  26. Van Hoek, Remko I. (2001): The rediscovery of postponement a literature review and directions for research, Journal of Operations Management, Vol. 19, No. 2, pp. 161–184.CrossRefGoogle Scholar
  27. Zinn, Walter / Bowersox, Donald, J. (1988): Planning physical distribution with the principle of postponement, Journal of Business Logistics, Vol. 9, No. 2, pp. 117–136.Google Scholar

Copyright information

© Springer Science+Business Media, Inc. 2006

Authors and Affiliations

  • Thorsten Blecker
    • 1
  • Nizar Abdelkafi
    • 1
  1. 1.Department of Business Logistics and General Management (5-11)Hamburg University of TechnologyHamburgGermany

Personalised recommendations