Product architecture, global operations networks, and operational performance: an exploratory study

Figures & data

Table 1. Aspects and factors of the global operations networks for modular and integral product architectures, with supporting literature sources.

Aspect	Factor	Modular PA (sources)	Integral PA (sources)
Network structure	Geographically dispersion	Dispersed (Sanchez and Mahoney1996; Schilling and Steensma2001; Voordijk, Meijboom, and De Haan2006; Ro, Liker, and Fixson2007)	Concentrated (Voordijk, Meijboom, and De Haan2006; Ro, Liker, and Fixson2007)
	Coupling	Loose (Sanchez and Mahoney1996; Schilling and Steensma2001; Voordijk, Meijboom, and De Haan2006; Ro, Liker, and Fixson2007)	Tight (Voordijk, Meijboom, and De Haan2006; Ro, Liker, and Fixson2007)
Plant focus	Focus at assembly plants	Scope, flexibility, multipurpose (Pine1993; Salvador, Rungtusanatham, and Forza2004; Ravasi and Stigliani2012)	Scale, special purpose (Ulrich1995)
	Focus at component plants	Scope, flexibility, multipurpose (Pine1993; Ravasi and Stigliani2012)	Scale, special purpose (Ulrich1995)
Internal capabilities	Number of key technologies available in-house	–	Many (Novak and Eppinger2001; Ülkü and Schmidt2011)
	Number of internal capable plants	Many (Pashaei and Olhager2017a,b)	–
Supplier capabilities	Specialised product development capabilities	Many (Howard and Squire2007; Lau2011)	–
	Specialised manufacturing capabilities	Many (Doran2003; Howard and Squire2007; Lau2011)	–
	Number of supplier sites	Many (Pashaei and Olhager2017a)	–
Distance	To market (from assembly plants)	Short (Salvador, Rungtusanatham, and Forza2004; Pashaei and Olhager2017a)	–
	From suppliers (to component plants)	–	Short (Pashaei and Olhager2017b)
Market	Number of market segments	Many (van Hoek and Weken1998; Yu, Gonzalez-Zugasti, and Otto1999)	–
	Market size	–	Large (Ülkü and Schmidt2011)

Table 2. Plant and respondent characteristics.

Characteristic	Distribution (%)
Number of employees
Less than 100	30.48
101-250	26.83
251-500	12.20
Over 500	30.49
Industry (SI code)
Fabricated metal products, except machines (25)	25.73
Rubber and plastics industry (22)	12.20
Other manufacturing (32)	9.76
Machinery industry and equipment (28)	9.76
Motor vehicle, trailer and semi-trailer industry (29)	7.32
Paper industry (17)	7.32
Pharmaceuticals industry (21)	6.10
Other industries	21.81
Respondent position
Production manager	40.24
Plant director or manager	31.71
Global operations director or manager	9.76
Supply chain director or manager	9.76
Other	8.54

Table 3. Exploratory factor analysis for product architecture.

Product architecture items	Component 1 “Modular”
Our product is characterised by components that are interchangeable	0.854
Our product is characterised by components that are individually upgradable	0.835
Our product exhibits standard interfaces	0.663
Cronbach’s α	0.691
Eigen-values	1.867
Percent of variance explained	62.2%

Table 4. Results from the cluster analysis and t-test for modular and integral PA clusters.

	Modular (n = 44) Mean (std.dev.)	Integral (n = 30) Mean (std.dev.)	t-value and level of significance
Interchangeable components	4.59 (1.34)	2.07 (0.98)	9.37 (0.000)
Individually upgradable components	4.77 (1.22)	1.77 (0.90)	12.22 (0.000)
Product with standard interfaces	4.11 (1.57)	2.83 (1.70)	3.27 (0.002)

Table 5. Exploratory factor analysis for global operations network factors for modular product architectures.

Items	Mean	Std. Dev.	Component 1 “Plant focus”	Component 2 “Supplier capabilities”	Component 3 “Network structure”
Focus at our assembly plants is scope/flexibility	4.49	1.222	0.856	−0.028	0.143
Focus at our component plants is scope/flexibility	4.17	1.224	0.830	0.190	−0.183
Our key supplier have specialised product development capabilities	5.41	1.351	0.141	0.854	0.073
Our key supplier have specialised manufacturing capabilities	4.91	1.334	0.010	0.823	−0.056
Our manufacturing network is geographically dispersed	4.69	2.055	−0.350	−0.251	0.668
Our manufacturing network consists of loosely coupled plants	3.97	1.618	0.200	0.196	0.820
Cronbach’s α	–	–	0.728	0.689	0.476
Eigen-values	–	–	1.974	1.218	1.139
Percent of variance explained	–	–	32.9 %	20.3 %	19.0 %

Table 6. Exploratory factor analysis for global operations network factors for integral product architectures.

Items	Mean	Std. Dev.	Component 1 “Plant focus”	Component 2 “Network structure”	Component 3 “Internal capabilities and market”
Focus at our assembly plants is scale	4.29	4.459	0.892	−0.167	−0.011
Focus at our component plants is scale	4.50	1.224	0.869	0.217	0.037
Our manufacturing network is geographically concentrated	4.15	1.953	−0.171	0.770	−0.250
Our manufacturing network consists of tightly coupled plants	3.64	1.823	0.192	0.840	0.062
Our key technologies are available in-house	5.88	1.296	0.128	0.045	0.841
The overall market size is large	5.46	1.382	−0.110	−0.200	0.777
Cronbach’s α	–	–	0.805	0.642	0.592
Eigen-values	–	–	1.682	1.646	1.113
Percent of variance explained	–	–	28.0 %	27.4 %	18.5 %

Table 7. Exploratory factor analysis of network structure.

Items	Component 1 “Network coordination”	Component 2 “Network configuration”
Our manufacturing network consists of tightly coupled plants	0.883	0.125
Our manufacturing network consists of loosely coupled plants	−0.857	−0.060
Our manufacturing network is geographically concentrated	0.230	0.848
Our manufacturing network is geographically dispersed	0.023	−0.892
Cronbach’s α	0.702	0.694
Eigen-values	1.887	1.214
Percent of variance explained	47.2 %	30.4 %

Table 8. Exploratory factor analysis of plant focus.

Items	Component 1 “Scale plant focus”	Component 2 “Scope plant focus”
Focus at our assembly plants is scale	0.881	−0.148
Focus at our component plants is scale	0.891	0.013
Focus at our assembly plants is scope/flexibility	0.031	0.873
Focus at our component plants is scope/flexibility	−0.166	0.853
Cronbach’s α	0.736	0.668
Eigen-values	1.793	1.318
Percent of variance explained	44.8 %	33.0 %

Table 9. Exploratory factor analysis of supply chain related aspects.

Items	Component 1 “Supplier capabilities”	Component 2 “Internal capabilities and market”
Our key supplier have specialised product development capabilities	0.853	−0.109
Our key supplier have specialised manufacturing capabilities	0.853	0.082
Our key technologies are available in-house	0.083	0.818
The overall market size is large	−0.109	0.818
Cronbach’s α	0.627	0.492
Eigen-values	1.488	1.341
Percent of variance explained	37.2 %	33.5 %

Table 10. Performance measures: descriptive statistics and t-test for significant differences between mean values.

Performance measure	Modular products (n = 34) Mean (Std.dev.)	Integral products (n = 23) Mean (Std.dev.)	t-value and level of significance
Conformance to product spec’s	5.38 (1.02)	5.65 (1.03)	0.113
Product performance	5.59 (0.93)	5.83 (0.94)	0.048
Delivery speed	4.88 (1.30)	5.35 (1.20)	0.184
Delivery reliability	4.97 (1.30)	5.70 (0.93)	1.484*
Unit cost of manufacturing	4.35 (1.25)	4.52 (1.20)	0.059
Product mix flexibility	5.18 (1.09)	5.00 (1.00)	0.240
Volume flexibility	4.76 (1.18)	5.00 (1.04)	0.254

* The difference is statistically significant at p < .05.

Table 11. Regression analysis results for the impact of PA and GON on operational performance.

	Dependent variable:
	Conf. to product spec.	Product performance	Delivery speed	Delivery reliability	Unit cost of manufacturing	Product mix flexibility	Volume flexibility
Modularity
Control variable:
Size	0.140	0.029	0.015	0.018	0.082	0.019	−0.105
Independent variables:
Degree of modular product architecture	−0.136	−0.105	−0.051	−0.142	−0.083	0.112	0.020
Network structure (dispersed and loose control)	0.022	−0.116	−0.310*	−0.208	0.166	0.017	−0.011
Plant focus (scope)	0.338*	0.178	0.016	0.172	0.113	0.153	0.117
Supplier capabilities	0.013	0.029	−0.054	−0.141	−0.171	0.062	−0.019
Adjusted R^2	0.135	0.069	0.105	0.114	0.069	0.043	0.029
Integrality
Control variable:
Size	0.025	−0.184	−0.041	−0.063	0.024	−0.076	−0.272
Independent variables:
Degree of integral product architecture	0.158	0.161	0.086	0.158	0.085	−0.089	0.043
Network structure (concentrated and tight control)	0.036	0.075	0.322*	0.210	0.006	0.093	0.381**
Plant focus (scale)	0.093	0.386**	0.078	0.138	0.100	0.101	0.188
Internal capabilities and markets	0.140	0.137	−0.072	−0.112	0.140	0.126	0.322*
Adjusted R^2	0.048	0.115	0.132	0.110	0.036	0.039	0.227

Notes:

*,

** Significant levels at p < 0.05, and p < 0.01, respectively.

Figure 1. Framework for global operation network design from a product architecture perspective, including significant relationships with performance variables.

Notes: *, ** significant at p<.05, and p<.01, respectively.

Table

PA1.	Our product is characterized by components that are interchangeable^M
PA2.	Our product is characterized by components that are individually upgradable^M
PA3.	Our product exhibit standard interfaces between different components^M
PA4.	Our product components are highly synchronized with each other for high product performance^I,*

Table

Internal operations:
GON1.	Our manufacturing network is concentrated in one geographic region^I
GON2.	Our manufacturing network is characterized by tightly coupled plants^I
GON3.	Our manufacturing network is geographically dispersed^M
GON4.	Our manufacturing network is characterized by loosely coupled plants^M
GON5.	Focus at our assembly plants are flexibility and multipurpose^M
GON6.	Focus at our assembly plants are scale and special-purpose^I
GON7.	Focus at our component plants are flexibility and multipurpose^M
GON8.	Focus at our component plants are scale and special-purpose^I
GON9.	The key technologies that are required are available in-house^I
GON10.	We have many capable plants^M,*
Suppliers and markets:
GON11.	Our key suppliers have many specialized product development capabilities^M
GON12.	Our key suppliers have many specialized manufacturing capabilities^M
GON13.	Our key suppliers have many sites^M,*
GON14.	The distance between key suppliers and our component plants are short^I,*
GON15.	The distance between assembly plants and our markets are short^M,*
GON16.	The product is sold on many market segments^M,*
GON17.	The overall market size is large^I

Table

OP1.	Conformance to product specification
OP2.	Product performance
OP3.	Delivery speed
OP4.	Delivery reliability
OP5.	Product mix flexibility
OP6.	Volume flexibility
OP7.	Unit cost for manufacturing

M = Factor related to modular PA, according to previous literature

I = Factor related to integral PA, according to previous literature

* = Factor dropped due to low loadings

N.B.: the superscripts M and I were not displayed in the questionnaire.

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