Mass customization aims to deliver customized products and services to individual customers at a cost near that of mass production. It uses information technology, flexible processes and organizational structures. There are four types of mass customization: collaborative, adaptive, transparent and cosmetic. Mass customization provides advantages like maximized customer satisfaction, reduced costs and inventory, increased cash flow and responsiveness to customer needs.
2. Mass Customization
Concept
ī âFuture Shockâ by Toffler, 1970 - âfuture
manufacturing enabled by information technology
would be able to provide customized products in a
large scale with little or no extra costâ
ī Pine et al.âs Harvard Business Review article, 1993 â
the ability to provide individually designed products
and services to every customer through high process
agility, flexibility, and integration
ī Hart 1995 et al. - Mass customization is a system that
uses information technology, flexible processes, and
organizational structures to deliver a wide range of
products and services that meet specific needs of
individual customers at a cost near that of mass-
produced items
3. MASS CUSTOMIZATIONīIt aims to deliver product and services that best meet
customersâ needs with near mass production efficiency.
īThe paradigm shift to mass customization is made an
imperative for many companies to survive in an
increasingly diversified, fragmented and competitive
market place.
īCurrently, the focus of research in mass customization
is shifting from its strategic viability to operational
feasibility.
4. Definition
īŧ The process of delivering wide-market goods and
services that are modified to satisfy a specific
customer need. Mass customization is a marketing
and manufacturing technique that combines the
flexibility and personalization of "custom-made"
with the low unit costs associated with mass
production. Many applications of mass
customization include software-based product
configurations that allow end-users to add and/or
change certain functionalities of a core product.
Sometimes called "made to order" or "built to
order."
īŧ Mass customization is the method of "effectively
postponing the task of differentiating a product for a
specific customer until the latest possible point in
the supply network."
5. ContâĻâĻ.
Joseph Pine II's 1992 book "Mass Customization: The New
Frontier in Business Competition" describes four types of mass
customization:
1. Collaborative Customization - where companies work in
partnership with individual customers to develop precise product
offerings to best suit each customer's needs.
2. Adaptive Customization - where companies produce
standardized products that are customizable by the end-user.
3. Transparent Customization - where companies provide unique
products to individual customers without overtly stating the
products are customized.
4. Cosmetic Customization - where companies produce
standardized products but market the products in different ways
to various customers.
6. MASS CUSTOMIZATION
- THE GENERIC MODEL
Spring et al. (2000) proposed a generic model
of product customization :
7. ADVANTAGES OF MASS CUSTOMIZATION
ī Maximized market share by maximizing customersâ satisfaction
and number of customers.
ī Cut cost of inventory and material waste: materials and inputs are
pushed into production just in time. Also, very low inventory of
finished products because of production to orders, not produce to
stock.
ī Increase cash flow: Lower inventories, prepayment (thus lower
receivables)... increase cash flow.
ī Shorten time of responsiveness (accumulative time from
receiving orders to delivering): organization structure and flexible
manufacturing in mass customization allows the company to
adapt to different demands rapidly.
ī Ability to supply a full line of products or service with lower costs:
the purpose of mass customization is to differentiate products to
particular demands, resulting in broader product lines of the
company and a much lower risk of obsolete inventory.
8. MASS CUSTOMIZATION STRATEGIES:
ī Design- in this mass customization strategy, customers interact
with suppliers with the objective to design a particular product that
fulfills particular requirements (e.g. residential architecture). This
strategy allows for customer involvement.
ī Fabrication- this mass customization strategy includes
customized product using basic predefined design, and allows
customer to modify the product building block (e.g. Motorolaâs
Bandit pager).
ī Assembly- this mass customization strategy refers to the use of
standard models that can be combined into different product
variants in order to meet particular customer requirements (e.g.
Hewlett-Packard products). This strategy allows for customer
involvement.
ī Additional Custom Work- in this strategy, mass customization
is achieved by adding custom work (e.g. Ikeaâs furniture) to
standard product, often at the point of delivery.
9. CONTâĻâĻ.
ī Package and Distribution- this mass customization
strategy refers to delivery or packaging similar
products in different ways (e.g. Wal-Martâs peanuts).
ī Usage- in this mass customization strategy, usage
occurs only after delivery, through products that can
be adapted to different functions or situations (e.g.
Lutronâs lighting systems).
ī Standardization- this mass customization strategy
relates to customizing products which self adapts to
specific customer needs.