How Modular Production can Contribute to Integration in Inbound and Outbound Logistics

TLDR: The principle of modular production has been applied internally by companies since the 1960s as discussed by the authors, and the automotive industry is now experimenting with the application of the concept in a supply chain setting.

Abstract: The principle of modular production has been applied internally by companies since the 1960s. Innovative companies in the automotive industry are now experimenting with the application of the concept in a supply chain setting. Modular production makes it possible to further involve both distributors and suppliers in the manufacturing process and create a new tier of suppliers: the “zero-level suppliers”. Expected benefits of the increased (physical) integration in the inbound and the outbound flow of goods are increased responsiveness to customers and preserved efficiency. It can be questioned, however, to what extent OEMs can increase the amount of control over operational activities based on networking, as opposed to control based on ownership, without becoming an “empty” design and marketing company.