Frugal innovation theory is proposed to help companies rethinking their current product design and production strategies facing competitive challenges. Co-evolution of product and production systems is required to reach frugality goals. The success of the co-evolution strategy should be based on robust models ensuring the global consistency of the whole development process. Modular-based models are a good solution for such problematics since they provide a common semantic for the representation of the physical product structure as well as the organizational structure of the production system through the definition of interfaces between elements and the hierarchical decomposition of a system into different elements. This paper proposes a conceptual modular-based approach dealing with the selection of product modules influencing the selection of suppliers and the allocation of orders in a global production network. The indirect linking of the customer to production is also discussed in terms of the timewise restrictions in selecting product modules offering the customer a maximum degree of flexibility in product specification. © 2016 The Authors.