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2.1 Introduction
Search protocol is an important aspect in the research study which helps in dictating a direction
for the research. In other words, it helps to dictate the research subject in a precise way so that her
the acquired results helps to convey a meaning. Search protocol greatly assists in finding the
appropriate data of the research in order to acquire a good amount of information on the current
subject in consideration. This research study is based upon the exploration on assessing the role of
Modularisation in Tesla Motors Inc. The literature review gathered is identified by the help of the
research subject. The books, articles, newspapers, online forums and research papers based upon
the subject of modularisation in the automobile industry are extracted out in order to attain the
required literature.
The literature on modularisation is very limited as the subject is relatively new, therefore, there is
a lot of research gaps found in the concept of modularisation. Since, the concept of modularisation
is not much practiced in the automobile industry, therefore, Tesla Motors is the chosen company
in order to role of the modularisation process in the company. Tesla Motors will be analysed by
regarding the company to serve the role of Modulators rather than sticking upon the strategy of
Integrators. Hence, the search protocol will correspond to the research respondents, who will help
in contributing knowledge on how the process of modularisation can be installed and implemented
The search protocol will cover the aspects of identification and analysis of clear and definite
literature review which is suitable for carrying the objectives of the research study.
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Protocol Title:
Protocol Date:
Protocol Venue:
The rationale behind this research study is to cover the research gaps on the research topic. The
strategy has not been implied in automobile industry because of the unavailability of skills and
The research articles are searched on account of the availability of information on the proposed
topic of the research. The names are acquired by internet, business articles and research journal
The names and information of the research respondents is kept confidential. This is due to the
exposure of information, they have provided in regard of the companys automobile processes.
The processes which are hidden are revealed in the research study in order to provide meaningful
knowledge to the research audience. Hence, the identity is kept hidden from the audience.
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The study goals is to acquire proper and suitable literature in order to acquire correct information.
This is done to ensure correct data findings for the research which is then concluded with
appropriate recommendations.
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3.1 Introduction
The literature reviews comprises of methodological and theoretical contributions in the context of
the research study. The sources assessed in search of collecting the literature reviews are only from
secondary sources where there is no new information to the experimental work. Literature review
is written in order to develop an understanding and explore researches and studies in context of
As the research topic revolves around the research upon the Role of Modularisation in Tesla
Motors Inc., therefore, chapter will be based on the literature review of Modularisation in general.
The literature review will further cover aspects like significance of modularisation, techniques
In literature, the term Modularisation is not a new terminology. Even the production industry
knows the importance and the critical significance of modularisation (Langlois, 2002). It has been
over 60 years that the modularisation has been practiced in the world of automobile industry.
Modularisation has been known widely in the automobile and aviation industry where the strategy
has created wonders in cost effectiveness and production utilisation tool. In order to locate the
theories or the case studies based on modularisation, it becomes a complete different task as it is
very difficult (Baldwin and Clark, 2000). Therefore, the process can be described vaguely in the
procedures and processes. There are few researchers who have provided an effective strategy or
work techniques that best describes the use of modularisation (Argyres and Bigelow, 2010;
By the help of these few researchers, formularisation and amalgamation of techniques are used in
the automobile processes in regard of the field of modularisation. The main reason is the process
that is accurately suitable for the modularisation process is hard to be determined or formulated
Some of the researchers contend upon the statement that literature is found on the modularisation
evolution. But, the discussion upon the modularisation contradiction is limited and scarce (Larson,
Casey and Howard, 2005; Salerno and Dias, 1999). Even the field of modularisation has been
observed and assessed for a while, still there are some existing gaps in the researches and literatures
based on the approach of modularisation. Similarly, the identification of the team goals and
In one of the research conducted by Fourcade and Midler (2005), the modularisation in the
automobile industry is connected with the organisational perspective with the modularising act
and referred to the decoupling in the design of the final product that is to be inherited in the firm.
It was also briefly defined by the researcher that the roles embossed within the project of
modularisation refers to the technology engineers and architects (Fourcade and Midler, 2005).
However, the concerned team fails to specify an analysis which is thoroughly defined on the roles
connected with such project. This is because of the strategical focus in the research paper
When modularisation is implemented within a project, the situation defined for the required
product is very specific in nature and it is important to know that every project concerned with the
modularisation technique is different each time (Park, Lee, Bang et al, 2005). Therefore, the
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structure and the roles of the modularisation project is very critical in order that it permits the
influence from all functions in an organisation (Salerno, 2001). The adaption and approach of
every function can be expressed to obtain the extent of modularisations synergy effects at
marginal costs in terms of resources (Langlois, 1999). In a case where a modularisation process is
run without the total dedication and involvement in each function, the back-log will develop before
the modularisation project is considered closed. This ultimately costs more resources for the
organisation that originate the project. In other words, the project is known to be modular
In the automobile industry, modularisation is still considered as a process which is in error and
trial stage. The auto industry has started to address these issues where it shows the history of
several years. The purposes and contexts of modularisation differs among different regions and
firms (Fourcade and Midler, 2004). Therefore, it is yet quite uncertain and unpredictable in the
current environment in the context of the evolution and impact of modularisation (Fujimoto, 2014).
Hence, the arguments which is created holds no more significance except the speculation. Still, it
can be said that the modularisation strategy in the automobile industry is safe and the ingoing
procedures that concerns modularisation provide several interesting cases to assess the dynamics
of the adjoining engineering and architectural modifications (Hsuan, 1999; Lung, Salerno,
The aspect that lie in the middle of the dynamics is the linkage among the inter-firm system,
architecture of the product and production system (Takeishi and Fujimoto, 2001). The
modification in the production system hierarchies and the inter-firm systems produces tensions in
their interactions with the architecture of the product. Thus, it encourages the redefining of the
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architecture of the product. It was pointed out by Baldwin and Clark (2002) that the problems in
the modularisation comprises of the modularity in production, modularity in use, and modularity
in design. The main focus in the research was based on the aspect of modularity in design.
In contract to this research, another researcher Takeishi and Fujimoto (2001) contended that each
of the defined three aspects has their own ideal architecture and they are balanced well in regard
of the relationships between them, which should be controlled in the modularisation process. This
tends to suggest that the three modularisation aspects ae inter related with each other and all of
them has an adjacent co-ordination which is very critical. The researchers also pointed that it is
significant that the co-ordination between organisational architecture and architecture of the
product is to be secured as well (Takeishi and Fujimoto; 2001). The organisational architecture is
inclusive of the inter-firm and intra firm organisation. The argument was also equipped with a
suggestion that the inter-firm system has a tendency to lead to modifications in the architecture of
the product. It is well recognised that the modularisation process in the architecture of product
sometimes alter the structure of the labour division in the automobile industry (Genba, Ogawa,
and Kodama, 2005). This is applicable on the vertical industry automobile structure towards the
In other research paper, it was suggested that the relation among the inter-firm system and the
architecture of the product is two way which is responsible in former influencing the latter and the
latter lays an impact upon the former (Wang and Huang, 2010). It was argued upon the analytical
framework in context of the hierarchies in the system product called the product function and the
product structure which corresponds to those in the inter-firma system and production system
(Sako and Murray, 1999). In a complex system, the hierarchal structure is produces as a technique
to rationalise the labour division. Each of the production, inter-firm systems and product has their
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own logic in the labour division. The inter-firm systems and the production system hierarchies
modifies in their own regard (Lung, 2004). The example can be taken from the development of
labours satisfaction, the utilisation of the salary gap among different firms, the re-allocation of
risks, and investment liability etc. (Yamaguchi, 2016). Such modifications in the inter-firm
systems and the production systems might demand modification in the architecture of the product.
The design activities conditions is not only the factor for modification in the architecture of the
product (Fujimoto and Takeishi, 2001). For instance, there are European automobile
manufacturers which are engaged in the exploration of new architectures across the production
systems, product systems, and inter-firms systems. The main motive of these automakers is to
search for a higher lucrative and cost effective business model (Milkovic, Ivkovic, and Konecki,
2016).
There are two case studies which were presented by Mikkola and Skjtt-Larsen (2004) that
presented the idea of modularising at a concise and scientific mathematical pace. It describes the
view of expanding the theoretical modularisation. The researchers found many complications in
in the product portfolio of a huge company in any certain industry. Mikkola and Skjtt-Larsen said
that the product portfolio can be calculated by any meaning with an absolute certainty which will
be followed by the firms strategy of the product recommendation. However, with a mathematical
function to put the results in the right perspective could provide the validity and guidance tested
It is not taken into account that Mikkola and Skjtt-Larsen's approach can "cope with modularity",
but a set a tool propositional to dialog with firms management to open or as an extension of the
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validity of the approach reports the understanding of modularisation management ((Mikkola and
Skjtt-Larsen, 2004).
In modularisation, there is a derivative used which serves as mass customisation into which a
customer interaction product is customised, precisely for each customer. This tool is extremely
influential to meet specific customer requirements, where big disparities in the product requires a
In another theory based on modularisation, a researcher named Prez, Gonzlez and Milans et al,
(2009) managed to explain the diverse roles in a project of configuration very thoroughly and
explored how these roles are significant enough in the modularisation. Therefore, Prez, Gonzlez
and Milans et al explained nine role that helped in focusing upon the development of a
configuration system which was way more than modularising. The researchers also pointed out
that there are many aspects of the configuration systems which considered transferable (Prez,
The researcher stresses upon how important a team approach is, by assigning the task of
configuring a system to meet as many needs as possible instead of focusing upon one approach
(MacDuffie, 2006). This concept is elaborated in the report where diverse approaches create effects
of synergy that allow a project to re-design the modular part or a defined system to meet the
requirements and focus on the key elements of various functional approaches. In the approach of
mass customisation, with a process of system configuration, where the processes of specifications
are highly important in terms of system design with the logical connectivity and constraints
(Vickery, Koufteros, Drge et al, 2015). This is much similar approach which is applied in the
process of modularisation, knowing the fact that the severity of the specification is most essential
in a configuration system.
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The process of decoupling becomes easier by determination of the specifications and defining the
interface points and their relation (Nunes and Bennett, 2008). Hence, it enhances the basis for the
development of modular products to be improved. As the field of modularisation is new, there are
still many areas which can be linked with the modularisation process. This can be done in order to
enhance the modularisation process in automobile industry (Furlan, Cabigiosu and Camuffo, 2014;
The introduction of a modular strategy is complex. The costs will rise initially as the accountability
for investments is from car manufacturers to the car suppliers. The actual savings will only be
realised in the next generation of the vehicle (Furlan, Cabigiosu, and Camuffo, 2014). If one
consider a new policy of module or a relative strategy for taking into account then the firms should
consider the options to define the needs of the current and future vehicle venture, identify
commonalities between vehicles and define the clusters of module and their specifications, specify
a basic module along with variants and conduct cost analysis and finally to develop a fact sheet
and fact book and development of the hierarchy module (Gaillard, 2006).
In the practical auto industry, there are very few manufacturers known as OEM (Original
Equipment Manufacturers) which are using strict modularisation strategies (like Nissan and
Toyota). They have led to a considerable competitive advantage and jumping to sales growth from
one record of sales to the next (Fogliatto, Da Silveira, and Borenstein, 2012).
The approach requires knowledge in regard of the techniques and strategies of modularisation
which is used in the specified situation and the origination and configuration of the modularisation.
In current world, there are people who are busy in the exploration of the environmental friendly
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manufacturing processes, thus, modularisation strategy acts very significantly in this scenario and
is considered an effective tool in the production strategy where it is acting cost saving and user
It is possible that the modularisation strategy cannot identify the actual challenges facing the
unnecessary product development strategy in wort case condition. The literature based on
modularisation strategy is unable to explain the diverse participation and its relative importance
which can break or make the conclusion of modularisation (Guerzoni, 2014). In such conditions,
it is recommended that, rather making thing rights, it is much better to do right things first. This
means that understanding the changes in the industry in business cases can lead to outcomes which
can be different. However, note the difference in participation in the modularisation project from
a certain industry to another, may end up as an important point (Luccarelli, Matt and Spena, 2015).
A modular strategy is defined as a process that takes advantage of the modular architecture of
products. Modular product is a product whose nature is complex and the individual elements are
made independently and yet work together as a unified whole (Hsuan, 1999). This type of product
was quickly adopted in the auto industry, in which the modules of the vehicles can be considered
like internal combustion engine, vehicle operating systems and car computers (Fujimoto, 2014).
By means of pursuing a modular approach, International Business Machines got the chance to
acquire the lead in manufacturing and designing the System 360 (Argyres and Bigelow, 2010).
However, the distribution of the revenues of a modular approach or strategy is motivated by the
specific characteristics of the industry, as the contrast among automobiles and computers portray
However, a widespread method seems to have been modularised. The MFD (Modular Function
Deployment) tool by Xue-Jie (2005) is frequently referred to and utilised as a stepwise process
upon the investigation as to which part of the architecture should be standardised and modularised.
approach and roles are reduced to clarify that the employees have a thorough knowledge of the
strategy basis, belonging to the same persuasion or department of how the product can perform.
The project of modularisation project might not include procurement approaches that may have
been able to reduce the standardisation costs. Similarly, it is not inclusive of the marketing which
had been able to assess the future trends of the customer, or production, which could be able to
The Original Equipment Manufacturers (OEM) in terms of strategy has an option to become
modular or turning to the integrated approach. In integration, the people which has an ability to
retain control of the complete production processes and design processes are the integrators (Park,
Lee, Bang et al, 2005). They continue to carry out a wide range of funds in both capacities. Strict
control over the design process provides an advantage to the integrator to retain the technology
leadership. It will be difficult to retain when the technologies are controlled and standardised by
dominant vendor modules. An integrator will also monitor the entire production process and
therefore has a mechanism to control the complexity and quality (Genba, Ogawa, and Kodama,
The strategy problems that are usually encountered by the OEMs is the vehicle comes across a
wider technological ranges to closely research and development, technical problems to integrate
diversity, expensive investments in new plants with regard to production items (Yamaguchi, 2016).
One way to solve these issues is to keep the technical control of design and research and
development. Another way is to switch to modular production processes which are higher in
technological aspects with great dependency on suppliers (Milkovic, Ivkovic and Konecki, 2016).
For example, Mercedes best suits in solving such issues and thus acts as a perfect model (Vickery,
Koufteros, Drge et al, 2015). It is responsible in conducting important research and internal
development, while changing the complexity of the production of large suppliers that produce
modules and make funding which are adjacent to closing assembly plants. At the other end, the
modulators is another option. They will change the complexity of the production suppliers and
follow a way to the modular design which facilitates the process of modularisation and production.
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Modularising strategy for the OEMs has a risk to lose technical control and a threat of deflation of
the value added source. This is because technical leadership shifts towards suppliers. Retained by
the shadow engineering manufacturer in society reflects this fear in the OEMs (Nunes and Bennett,
2008). On the other hand, the modular value can be maintained through branding, customer
service, the style of innovative products and product concepts in general (for instance; the smart
car). Original Equipment Manufacturers can also maintain added value by means of global
presence, smoothed by reduction in investment that allows outsourcing the support. In reality, the
modulators can be chiefly involved in accepting modules such as cost reduction or asset
3.6 Findings
Car manufacturers all over the world have shared the manufactured cars in many areas to facilitate
the development process and manage production. Since some automotive manufacturers have
radically re-designed the hierarchies in their process of developing and producing modularisation,
others have also started to explore new relational hierarchies (Baldwin and Clark, 2003).
It is observed that the modularisation process in the automobile industry is mainly adopted by
individual business models. Also, Western car manufacturers use individual modularisation
modules for certain models. There are no cases to adopt the same modules through diverse plants
or models. Similar to the sub-groups and rationalisation of the design applied in the Japanese
automotive industry. In this respect, the process of modularisation in the automotive industry is
fundamentally dissimilar from the open modularisation in the components of PCs, stereo systems
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and bicycles. If a car manufacturer outsourced design tasks in huge units to a specific supplier, the
supplier could allow to continue the exchange of components and standardisation to a particular
extent. This is due to the free hand given to supplier (Pandremenos, Paralikas, Salonitis et al 2009).
There is a mutual existence in the certain patterns of modularisation process in the international
automobile industry based on different strategies, capabilities, business environments, and paths
towards modularisation. In addition, a scenario for several modularisation models for diverse
product lines and market segments exists. Other than that a certain pattern might command
significant competitive direction, provided that the complete auto industry might be transformed
Modularisation in future depends upon the pattern which would permit the auto manufacturers tp
produce and design cars having maximum value for the customers. It is also important to look for
innovation in medium and long-term technology in future. The need which exists urgently is to
protect the environment which has replaced the competition of a new energy source (like fuel cell
or hybrid engines) to accelerate conventional combustion internal engines (Baldwin and Clark,
With the rapid development of communication and information technology, the development of
Intelligent Transportation System (ITS) has also increased. The importance of IT (Information
Technology) is growing in vehicles that has made the software role more significant. Therefore, it
has the tendency to support the modularisation kind by a separation in the software and hardware
of the automobile components. When these new technologies are implemented practically, the cars
architecture will be completely re-designed and these modifications will unavoidably affect inter-
firm and production systems. It is expected that in such cases of new architectures (for architecture
of the product, inter-firm systems and production systems) in the automotive industry will be
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produced by dynamic relations between the trials, modularisation and modern technological
Philosophical paradigms explains a perspective about the research study which is held by the
researchers community. The research paradigm is based on a set of shared concepts, values,
practices and assumptions. The paradigms are concerned with the disciplinary practices or
organisation of framework and holds the identification of the methods, practices and characteristics
which create certain expectations about the research conduct and nature. The research paradigm is
applied to the concept of philosophy when it is appropriate in proposing wide engagement to the
In the context of the research study, the research paradigm is based upon the choices which are the
reflection of the views of the researcher. Therefore, it is based upon epistemological and
methodological assumptions. The belief that certain knowledge of modularisation is created refers
practices. There are two types of paradigms i.e. qualitative and quantitative. This particular
As this research is based upon the methodological assumptions, therefore, the inductive processes
will be followed on account of qualitative research. The inductive process is a process when
empirical observations are used to guide the modular theory development on inferring the general
The criterion of experience and training refers to the literary writing and library skills as the
The psychological attributes refers to the extent of comfortability of the research with respect to
the guidelines and rules of carrying out the research study. This research is carried out more
comfortably as there is absence of the rules. The rules are absent due to the qualitative analysis.
There is high tolerance and longer durations in conducting the research study.
This particular research is an exploratory research where the proven facts on the research study are
scarce.
The audience of the research study are supportive and accustomed of the philosophical paradigm.
This is because, the research is conducted upon a topic where literature is limited and resources on
The social paradigm of this research is that the research is helpful in contributing factors which
are socially important. Social development is desirable in order to maintain a balance in the society
while the economic development is needed as it is responsible for bringing prosperity to the
countries and their nationals. Still there is an unevenness between the social and economic
paradigms.
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3.8 Conclusion
The third chapter is the literature review which is based on explaining the significance of
modularisation. The literature review clarified the fact that the indulgence of modularisation in the
automobile industry helps in creating a competitive edge. The literature review has highlighted the
research works of certain scholars who have discussed that how modularisation helps in improving
the products quality. It has also described an in depth analysis on the modularisation strategy,
techniques and relevant theories upon the research study. Finally, the research paradigms are
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