Direct and mediated effects of product modularity on development time and product performance

Product modularity is considered a crucial driver for the improvement of new product development (NPD) performance, in terms of NPD time and product performance. However, quantitative studies demonstrating these links are scant, and some authors have expressed various doubts on whether a clear relationship between NPD time or product performance and modularity always exists. This paper analyzes the impact of product modularity on these performance dimensions, and the mediating effect of supplier involvement in NPD on “modularity- NPD time” and “modularity-product performance” relationships. Data from a sample of 201 manufacturing plants settled in several countries around the world demonstrate that the impact of product modularity is partially mediated by the involvement of suppliers in NPD. The practical implication for managers is that to fully exploit product modularity benefits, it is opportune to combine modularity with supplier integration practices.