Modular Production Networks And East Asian Regional Economic Integration

In recent years, modularity has been widely used in the design process of complicated products. On the basis, this method has changed the organizational structure and industrial innovative capabilities. Based on the dynamic improvement of value chains and profound application of information technology, modular networks can react to the outside environment more optimistically and face up to the globally challenging being a new form of industrial organization. This form has changed the traditional production mode of vertical integration, being basically a more flexible production system and an integration of organizational forms attached by'Codable' information.In the layers organization of modular production networks, the brand firm is on the top layer, while the module suppliers are on the lower layers that are connected by system information. Under the circumstances of obeying the system information, module suppliers have the independent options of design and production by taking charge of the specific information of modules. Module suppliers are functionally connected by the common interface with the'Codable' information sharing.From the inside, the modular production networks are restricted by the core competence of the firms, and from the outside, they are affected by the fundamental change of technology, globalization and the changing of market demand. In the modular production networks, firms are able to react to the changing of the market demand as quickly as possible and increase the velocity of product and service innovation in order to realize the value innovation by creating the value of both firms and customs. As the same time of reconstructing the original markets, firms are opening new markets.Modular production networks represent trends of globally dispersing and regionally concentrating. Module cluster is one characteristics of concentrating of modular production networks in East Asian region, and shows that there are clustering many module suppliers in East Asian regional production networks with'Codable' information connection.Meanwhile, modular suppliers are capable of transforming to brand firms by technologically increasing or changing to make production of more tech-added modules, and finally take control of the whole of the regional production networks and the rest modules in the networks connected by system information mutually. Both kinds of information are definite and sharing information, so the networks of firms are setting up integration of the region.Since there are various kinds of market systems around the firms, the regional market integration is formed. Based on the mature mechanism of market, as far as the regional market integration is coordinated with the government policies, East Asian regional economic integration can be finally realized.