Modular technologies and the time-to-market process-maturity tradeoff

Abstract

Summary form only given. Modular process technologies are proving effective in improving the speed and cost of developing new manufacturing technologies. Modular products are assembled from independent components that are manufactured to meet a predefined standard, such as the chips, disks, monitors and motherboards that comprise personal computers. When the standards defining the interface between the modules are well-understood, these components can be purchased from external suppliers rather than produced in-house. As a result, no single firm needs expertise in all the modules of the product, reducing the scope of knowledge and innovation required by any one firm. This arrangement promotes specialization and increases the rate of innovation as firms race to improve the performance of individual components. While successful modularity in products require a well understood interface between the modules, the same is not true for successful modularity in the process technology. In fact, modular production technologies are valuable in semiconductor manufacturing precisely because interfaces within production processes are not well understood.