An evaluation of value-transfer within a modular supply chain

Abstract

The paper explores the impact that modularization is having on the structure of supply chains in general and on the role of first-tier suppliers in particular. Two concepts are presented to illustrate firstly the need to redefine the term ‘first-tier’ supplier and secondly to determine how and why value can be transferred within a modular supply chain. The first concept, the ‘continuum of first-tier suppliers’, contends that only certain ‘first-tier’ suppliers will be able to compete within a modular environment, whilst the second concept, ‘value-added second tier’ examines the role (in many cases, the enlarged role) that second-tier suppliers are likely to play within a modular landscape.