Effect of products' architectural modularity on supply chain performance

Abstract

varieties of products at lower prices. The manufacturers faced the challenge of satisfying wide range of customers’ needs at lowest possible cost. Researchers recognized the need for the integrated product and supply Chain design considering modularity and commonality in design to provide variety in products at lower total supply chain cost compared with considering no commonality and modularity within the design. The integrated design of product and supply chain enhances the SC performance because the parameters of both design and supply chain perspectives are taken into consideration while seeing the other side. Hence, Nowadays, consumers’ demands are frequently changing seeking wider design is made that result into best Supply chain performance than that just designing in blinding eye from its associated cost. It makes no sense to design extra ordinary design that may be very costly to implement it or un-applicable. Also, it is inefficient for supply Chain manager to optimize the supply chain performance at different parameters at a predetermined commonality based on his expectation without optimizing both product design and supply chain one ahead. Sequential and simultaneous approaches are used for the integrated design of product and supply chain. Many works for integrated design considering the two approaches are conducted, however, many of the crucial problem parameters are not considered in the model formulation before. These parameter include: 1) material discount, 2) discount threshold, 3) discount range, 4) Extra feature of the High end module to tackle the cannibalization thread of commonization 5) Multi-period different inventories types and Compromising between materials, modules, products inventory levels decision. Many of the previous works seldom investigated the optimum level of commonization at different SC parameters. Also, the effect of extra features of common modules at different SC and design parameters, and by virtue the dependency of product design and SC decision on product parameters, SC parameters, or on both. The objective of the present research is to develop a mathematical model that enables the decision maker to make necessary compromises between commonality decisions and supply chain performance. The mathematical model has to optimize both product commonality decisions and supply chain decisions simultaneously. Also, to study the effect of supply chain parameters such as material discounts, ability to keep inventory and available production capacity on commonality decision is investigated. In addition, the effect of commonizing product family variants of similar functional modules to high end variant instead of low end variant is investigated. A mixed integer nonlinear programming mathematical model is developed to optimize both the products decision and supply chain decision simultaneously at one step. Each of either components of the optimized design (e.g. product design or supply chain design) is dependent on the other. Furthermore, the developed model included a developed index that assesses the commonization of High end module at end of all planning periods. LINGO optimization software is used to conduct the needed runs. The objective function formulated to minimize supply chain total cost. The deliverables of the model should be: 1) The selection of variant modules for each product, 2) Specification of optimum level of commonization within the