The relationship among modularity, functional coordination, and mass customization: Implications for competitiveness

The purpose of this paper is to investigate how product modularity (PM) is related to mass customization (MC) capability and plant competitiveness.

The paper tests hypothesized relationships using structural equation modeling with an international dataset.

PM is not directly related to plant competitiveness. Inter‐functional design coordination (IDC) is found to be critical in fostering plant competitiveness.

Managers need to put IDC mechanisms in place to foster MC capabilities and, thereby, enhance plant competitiveness.

While the existing literature mostly argues for a direct relationship between PM and competitiveness, the paper shows that IDC and MC capability are crucial intervening variables in this relationship.