Modularity in the Design of Complex Engineering Systems

Modularity accommodates uncertainty because the particular elements of a modular design may be changed after the fact and in unforeseen ways as long as the design rules are obeyed. Thus, within a modular architecture, new module designs may be substituted for older ones easily and at low cost. This chapter will make three basic points. First, we will show that modularity is a financial force that can change the structure of an industry. Then, we will explore the value and costs that are associated with constructing and exploiting a modular design. Finally we will examine the ways in which modularity shapes organizations and the risks that it poses for particular firms.