At present, many enterprises are adopting modularity in their manufacturing processes, especially the enterprises participating in the international production supply chain. In the same vein, knowledge-based innovation plays an important role, which is related to the enterprises' survival and development. There is increasing investment in innovation in most off modern enterprise. However, few of them have realized that modularity could affect their efforts to innovate and even fewer have applied modularity as a strategic idea to carry out knowledge-based innovation. In this paper, we have discussed how modularity can influence knowledge-based innovation in four different ways and we strongly suggest that enterprise should take suitable management strategies in order to reinforce the positive impact of modularity in the innovation process. Following are a few management advices on how to conduct modularity in knowledge-based innovation effectively.