Modularity and Delayed Product Differentiation in Assemble-to-Order Systems

Abstract

The paper assumes a product design around modular architectures and dis- cusses the suitability of the principle of delayed product differentiation in as- semble-to-order environments. We demonstrate that this principle does not en- able one to make optimal decisions concerning how variety should proliferate in the assembly process. Therefore, we propose to complement this principle in that we additionally consider the variety induced complexity throughout the assembly process. The weighted Shannon entropy is proposed as a measure for the evaluation of this complexity. Our results show that the delayed product differentiation principle is reliable when the selection probabilities of module variants at each assembly stage are equal and the pace at which value is added in the whole assembly process is constant. Otherwise, the proposed measure provides different results. Furthermore, the entropy measure provides inter- esting clues concerning eventual reversals of assembly sequences and supports decisions regarding what modules in an assembly stage could be substituted by a common module.