6 ideas
A system is modular when it is split into independent parts joined by stable, standardized interfaces. Designers can then rework one module's internals without touching the rest, because the visible design rules stay fixed.
A modular design partitions parameters into visible design rules (architecture, interfaces, integration tests) that everyone must obey, and hidden parameters that live inside a single module. Only the visible rules require coordination; the hidden ones can vary freely.
Because modules can be improved or replaced independently, each becomes a real option: you can experiment on it in parallel and keep only the best version. The value of a design rises with the number and independence of the modules you can bet on.
Baldwin and Clark name six operations on a modular system: splitting, substituting, augmenting, excluding, inverting, and porting. These operators are the moves by which an industry's design space is searched and expanded.
The way a product's design is decomposed into modules ends up mirrored in the firms and markets that produce it. A modular architecture invites a cluster of specialized firms competing module by module, as in the computer industry.
A design structure matrix charts which parameters depend on which others; dense off-diagonal blocks reveal where true modules can be cut. Seeing a product as a dependency graph shows where independent work and value creation are actually possible.