Effects of product modularity on productivity: an analysis using data envelopment analysis and Malmquist index

Abstract

Product modularity can be considered as a product design strategy. It provides many benefits for companies that adapt it. However, there is little empirical evidence to support such an expectation. This study aims to measure the effects of product modularity on the efficiency and productivity of the product engineering area of a bus manufacturer. To reach the proposed objective, a longitudinal case study was conducted on the product engineering department of a company covering a period of three consecutive years. We used Data Envelopment Analysis (DEA) combined with Mann–Whitney U test and Malmquist index. The results show an increase of 18.40% in the efficiency indexes of the company’s products engineering. In addition, positive changes can be observed, that is, there was a 63.50% increase in Total Factor Productivity Index (TFPI). The improvements are attributed to the implementation of product modularity in the organization under study. In this sense, the main contribution of this paper to the field is to present the increment of productivity with the insertion of the product modularity in the product engineering in a bus manufacturing company. Thus, product modularity can be considered a technology that increases the Total Factor Productivity Index (TPFI) of the companies that use it.