The Modular Squad

Breaking It Down

Modularity is defined as building a complex product, service or process from many smaller pieces that can be created independently and then combined to make a whole. It's what allows computer hard-drive makers to build drives they know will work in any PC. At the same time, it enables PC makers to build their boxes, confident that hard-drive companies will supply the needed accessories.

Low-tech industries can also be modular; bedsheet makers cut cloth they're confident will fit standard mattresses. Even services can be modular, such as when an investment advisor farms out the mutual fund management portion of his or her services to a fund company.

Modern modularity started with innovations in project management in the 1960s, enabling IBM to design many versions of its System 360 mainframe computer, all using the same basic software and add-ons, such as printers. Previously, all computers needed their own special programs and peripherals, says Baldwin. The modularity of IBM's design allowed it to virtually take over the mainframe computer industry and made the 360 one of the most successful products ever, she says.

Many products are manufactured in modular fashion, of course. Car makers give parts specifications to suppliers, who come back with modules that can be assembled into an automobile. Modern modularity goes beyond manufacturing, however, and encompasses design as well. That means that parts suppliers not only produce pieces according to the manufacturers' specifications, but they also design new parts that will fit into and add to the overall design.

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This article was originally published in the March 1998 print edition of Entrepreneur with the headline: The Modular Squad.

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