Product architecture, product development process, system integrator and product global performance

In this article, we characterise the impact of product global performance on the choice of product architecture during the new product development (NPD) process. We classify product architectures into three categories: modular (neither interface is geometrically nested) integral (all interfaces are geometrically nested) and hybrid (some, but not all interfaces are geometrically nested). Existing studies show that the choice of a product architecture during the NPD process is a crucially strategic decision for a manufacturing firm. However, no single architecture is optimal in all cases, thus analytical models are required to identify and discuss specific trade-offs associated with the choice of the optimal architecture under different circumstances. This article develops analytical models that obtain a product's global performance through a modular/hybrid/integral architecture. Trade-offs between costs and expected benefits from different product architectures are analysed and compared. Multifunction products and small size are used as examples to formalise the models and show the impact of the global performance characteristics. We also investigate how optimal architecture changes in response to the exogenous costs of system integrators. Some empirical implications obtained from this study show that if the global performance benefit is sufficiently large, then modular architecture is an absolutely sub-optimal decision and integral architecture is an all-the-time candidate for optimal architecture.