Transferring value-added activities in new product development: A multiple case study in the automotive sector within modular strategy context

Abstract

Automobile companies have used modularity as a strategy applied to new product development along with the outsourcing of production. To develop products using the modular strategy, activities inherent to production are redistributed, based on a division of work among assemblers and their suppliers. In this context, this study investigates the implications of modular strategies for the process of transferring value-added activities in new product development to first and second-tier suppliers. The research relies on a multiple case study approach. The companies studied were positioned in distinct levels of modular competencies (‘embryonic’, ‘under development’, and ‘mature’), according to the empirical evidence. The relationships between the stage of maturity and major new product development practices were also identified.