Contrary Evidence: Product Modularity and Supplier Integration

Abstract

This research investigates whether there is any relationship between the levels of product modularity (PM) and organisational modularity (OM). It additionally explores the implications of this relationship on inventory performance. The proposition, mirroring hypothesis, establishes the positive relationship between PM and OM. However, many studies oppose to the mirroring hypothesis by revealing various contingent factors. The one, even if not being uncovered yet, is an operational factor. High inventory performance requires the pair 'modular product - supplier integration', indicating a negative relationship between PM and OM at across-firm level. This research sheds light on this controversy based on the data collected by Turkish manufacturing firms. The results show the negative correlation between PM and OM for the first time. Hence, this research additionally uncovers (i) the effects of integral products on the supplier integration level, and (ii) the counter-effects of supplier integration on the PM level. Copyright © 2016 Inderscience Enterprises Ltd.