How Modularity Improves The Efficiency:An Empirical Analysis Of Internal Mechanism

With the development of economy, modular production is widely used in various fields, and help the enterprises to form a competitive advantage. Take mechanical industry for example, basicly the enterprises product self climbing tower crane with the method of Modular production, which result in shorter delivery time and higher production efficiency; vehicle module manufacturers decreased average cost by5%with the method of modular.With the widespread use of modularity, in order to gain the competitive advantage and upgrade the industry, it is necessary for Chinese manufacturing industry to change the mode of production and improve production efficiency.First of all, this paper presents the purpose and significance of how the modularity improves the production efficiency and cause the maximum benefit of enterprises in the introduction. And then we mainly concluded and summarized the reference researches on modularity of the domestic and foreign scholars. What’s more, we collected and generalized the connotations, principles, development and other related theories of modularity, and laid a solid foundation for further theoretical research.Secondly, the paper analyzed the inner mechanism of how the modularity improve production efficiency. From the point view of mathematics, the paper divided the production strategies of enterprise units into three states:integrated production, simple block production, as well as being modularized, to gain three decision points. We compared different results of benefit respectively, and conclude that modularity can promote production efficiency while the level of technology progress is raising.In the next place, in the empirical part, the paper collected the data of nine industries in manufacturing industry, and constructed the index of estimating the degree of the modularity. Once more, according to the identified panel data model, we established equation to study the impacts of modularity on efficiency in the case of technical progress, and we analyzed different influences in every industries. The results show:the modular organization can effectively promote the improvement of production efficiency for a relatively complex enterprises of high-tech; on the contrary, modular production organization and not very well promote production efficiency in the traditional industry with slow progress of technology.Finally, based on the above theories and the empirical analysis, the paper put forward proposals about modularity for government and enterprises, to provide some available ideas for carrying out modular production in Chinese manufacturing industry.The paper studys the inner mechanism of how the modularity improve the production efficiency, which not only enrich the modular theories, but also provide the practical significance for promoting the manufacturing industry.