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The Role of Modular Upgradability as a Green Design Strategy

Author

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  • Vishal V. Agrawal

    (McDonough School of Business, Georgetown University, Washington, DC 20057)

  • Sezer Ülkü

    (McDonough School of Business, Georgetown University, Washington, DC 20057)

Abstract

Modular upgradability has been suggested as a strategy for improving environmental performance: as technology improves, it allows for independent replacement of improving subsystems, instead of replacing the entire product. This may extend the useful life of stable subsystems, reducing production and disposal impact. However, this argument ignores the effect of modular upgradability on a firm's development and introduction decisions and the environmental impact during the use phase. In this paper, we investigate when modular upgradability leads to lower environmental impact and higher profits. We do so by endogenizing a firm's development and introduction decisions and considering the product's environmental impact during its entire life cycle. Our results show that although modular upgradability may accelerate the replacement of some subsystems, it delays the replacement of others. We find that modular upgradability can increase the environmental impact for some product categories due to accelerated obsolescence arising from more frequent introduction and replacement. However, we also find that accelerated obsolescence, under some conditions, can actually make modular upgradability greener.

Suggested Citation

  • Vishal V. Agrawal & Sezer Ülkü, 2013. "The Role of Modular Upgradability as a Green Design Strategy," Manufacturing & Service Operations Management, INFORMS, vol. 15(4), pages 640-648, October.
    • Handle: RePEc:inm:ormsom:v:15:y:2013:i:4:p:640-648
    DOI: 10.1287/msom.1120.0396
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    12. Cheng, Fei & Chen, Tong & Chen, Qiao, 2022. "Cost-reducing strategy or emission-reducing strategy? The choice of low-carbon decisions under price threshold subsidy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 157(C).
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    14. Ionela-Corina Chersan & Mirela Paunescu & Elena-Mirela Nichita & Valentin Florentin Dumitru & Cristina Lidia Manea, 2023. "Circular Economy Practices in the Electrical and Electronic Equipment Sector in the European Union," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 25(62), pages 1-80, February.
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