Evaluating the impact of modular product design on flexibility performance and cost performance with delivery performance as a moderator

Purpose: The purpose of this paper is to examine whether modular product design is an appropriate practice to improve manufacturers’ flexibility performance and cost performance as well as to evaluate whether combined effects of modular product design and delivery performance on flexibility performance and cost performance exist. Design/methodology/approach: Structural equation modeling with moderating effects is used. Moderating effects allow an evaluation whether combined effects of modular product design and delivery performance exist. For the analysis, data from the international high-performance manufacturing survey are used. Findings: Analysis results show a positive relationship between modular product design and cost performance, but do not show a significant moderating effect. Thus, no combined effect of modular product design and delivery performance exists in the data at hand. Research limitations/implications: A potential limitation of this study is the cross-sectional nature of the analysis. In order to test for causal relationships or chronological sequences, longitudinal data are deemed more suitable. Practical implications: The findings make improvement processes more predictable and help managers to overcome traditional trade-off situations, especially in terms of flexibility performance and cost performance. Manufacturers are still neglecting the implementation of complementary methods for achieving an increase in flexibility while maintaining efficiency. Originality/value: This paper complements prior research on the effect of improvement practices on operational performance dimensions. It also takes an alternative approach to examine whether a beneficial implementation sequence of improvement practices can be assumed.