Literature Review: Cost Implications of Component Commonality, Modular Design and Product Platforms
In recent years, many firms have increased product variety in the face of heterogeneous customer needs, thus posing challenges for internal operations. Component commonality (CC), modular design (MD) and product platforms (PP) are three methods that firms use to mitigate this trade-off between product variety and operational performance. Research on the three methods is abundant in the operations literature; however, their implications for cost remain rather unclear. The purpose of this paper is to provide an overview of research published in the management accounting literature on cost implications of CC, MD, and PP. The structured literature search in 41 journals over the past 25 years yielded a set of 58 papers, which we split into 14 A-papers on cost effects and 44 B-papers treating rather indirect effects on cost. MD has received the most attention in our sample, followed by CC and PP. The journals Decision Science and Management Science account for 76% of papers. Among A-papers, empirical and analytical research designs are most common. We conclude that the cost effects of the three methods are more complex than previously assumed and that we cannot make a general statement about them.