An Integrated Framework Matching Product Architecture with Supply Chain Design Policies

Product architecture is the arrangement of the functional elements of a product into physical components. The arrangement defines the way in which the components interact and interface with each other. Product architecture can be classified into two types: open (or modular) and closed (or integral). Modular architecture indicates a one-to-one mapping between functional elements and physical components, whereas integral architecture indicates a one-to-many or many-to-one relationship. Because of openness and standardized modules with greater substitutability, modular architecture allows us to create more product variety at lower costs. Although product architecture is normally established during the early stages of the product development cycle, however, it influences decisions made downstream in domains of product, process and supply chain. While it is widely believed both in engineering and operations management that it is better to consider supply chain concerns during product development stage, however, there are few existing studies that provide a quantitative framework for making such decisions early in the architecture selection stage. This paper tries to fill this gap by proposing a quantitative framework to aid product development engineers and managers in identifying the optimal modules considering multiple design and supply chain objectives. The optimization model will incorporate decision variables so that one can examine the impact of modularity decisions on supply chain policy. It attempts to bring the supply chain decision making into the early stage of the product development cycle.