Mass Customization
Prepared for ‘Infotech Applications
in Marketing’ Group, University of
Delaware, 31 October 2005
Donal Reddington, Editor, MadeForOne.com
Introduction
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Mass Customization – How it evolved
Significant Events in Development of
MC
Types of Mass Customization
Examples – Manufacturing and Services
Future Developments
MadeForOne.com – Story of MC News
website
31 October 2005
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Mass Customization – How It
Evolved (1)
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Middle Ages – Craft Production
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Master Craftsmen and Apprentices
One off products, high labour content,
expensive
18th Century – Industrial Revolution
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Movement of people off land to towns and
cities
Sub-division of work  loss of traditional
skills
31 October 2005
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Mass Customization – How it
evolved (2)
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United States – Industrial Development
started later, from mid-19th Century
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Industrial workers had greater skills
More use of these skills in U.S. factories
Greater innovation – Colt weapons
company developed standardised parts to
assist battlefield repairs
Development of mass production in early
20th Century  U.S. becomes global power
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Mass Production to Mass
Customization (1)
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Mass Production – example: Ford
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Division of work
Low variety of output – ‘any colour as long
as it’s black’
Constantly rising volume sales, and lower
input costs = lower prices (economies of
scale)
OK in permanently expanding economy
with favourable demographics
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Mass Production to Mass
Customization (2)
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1970’s – Slowing Economy – Rising Oil Prices
Need for alternative approach
1970’s-1980’s – Increasing competition within
U.S. market from outside countries, esp.
Japan
Late 80’s-early 90’s: Literature proposing MC
Development of internet (esp. product
configuration systems) in mid-1990’s opens
door to widespread use of Mass
Customization
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Significant Literature
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1970 – Alvin Toffler: ‘Future Shock’
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1987 – Stan Davis: ‘Future Perfect’
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“Consumers and producers working together” =
“Prosumers”
First use of the term ‘Mass Customization’
1991 – B. Joseph Pine: Mass Customization –
The New Frontier in Business Competition
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First detailed description of mass customization
concept – replace economies of scale with
‘Economies of Scope’.
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Types of Mass Customization
(1)
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The Four Faces of Mass Customization –
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Joseph Pine and James Gilmore - Jan.-Feb. 1997
Harvard Business Review
1. Collaborative Customization:
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Consumer and producer engage in a dialogue to
determine customer requirements
Computers, clothing and footwear, furniture, some
services
2. Adaptive Customization:
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Product is designed so that users can alter it themselves
to fit unique requirements on different occasions
High-end office chairs, R7 golf club, certain electronic
devices
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Types of Mass Customization
(2)
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3. Cosmetic Customization:
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Product is unique in appearance only
Customer’s chosen text or image on T-shirts, mouse
mats, baseball caps, mugs etc.
Also called ‘Personalization’
4. Transparent Customization:
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Producer provides customized product without consumer
being necessarily being aware that it has been
customized
Can be used when consumer’s needs are predictable or
can be easily deduced, and when customers do not want
their requirements repeated.
Example- repeat orders for customized clothing,
chemicals
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True Mass Customization
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True Mass Customization requires:
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System for customer to specify requirements
easily e.g. online ordering, call center
Advanced manufacturing systems
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Build-to-order approach
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Enable economies of scope (keep cost and price low)
product is not made until order is received (Book: Build
to Order and Mass Customization – David M. Anderson)
Minimum order quantity of one
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Advantages of MC
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Customer has control over product
Does not have to pay for features he/she does not
want (computers etc.)
‘Not in your size’ becomes a thing of the past
Company does not have finished product inventory
 better use of working capital
Easier for company to differentiate product
Levels out economic fluctuations
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When slowdown occurs, less backlog of inventory
Prices do not have to be cut as much
Therefore, less likelihood of recession
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What Mass Customization Isn’t
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Massive Product Variety – Customer has Choice but not
Control;
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Advanced ordering system linked to craft production;
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Use of knowledge about customer to personalize
marketing of standard products.
Data gathered from loyalty schemes, etc.
Customized products with minimum quantities
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Example: Well known snowboard maker – customer can
specify exact requirements online but boards are handmade
Personalization or mass customization of Marketing:
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E.g. ‘Personalize your cellphone with any of our 2000 skins’
‘Your design on a T-shirt, minimum order 100’
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Examples of Mass
Customization
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Dell
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Build to order computers
Assembly, not manufacture (modular components)
MC sometimes associated with higher prices but
Dell cheaper than most
Why? Massive efficiency of supply chain
management
‘Living in Dell Time’ - Fast Company, Nov. 2004
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Examples of Mass
Customization
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Clothing and Footwear
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Sports Equipment
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NikeID, MiAdidas, Otabo Shoes, Vans
Bivolino (shirts), U-Jeans, Land’s End, Target,
Tommy Hilfiger
Clothing and footwear very suited to MC due to
each person being unique in size and shape
Nautilus (treadmills)
Industrial equipment, construction
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Kingspan – insulated roof and wall panels, made
to order for size, colour, insulation type
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Mass Customization of
Services
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Difficult to define when a service is mass
customized rather than just ‘customized’
Degree of automation required
Examples
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MyYahoo, MyMSN, Google Personalized
Personalized songs – Instasong.com
I.T. – providing services in similar way to object
oriented software – small pre-existing components
of work combined to create overall service
Requires increased efficiency and lower prices so
as not to be just ‘packaging’ of existing services
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Micro Manufacturing
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CafePress.com, Zazzle.com
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Offer personalized products themselves
Also offer other websites facility to design
products and market them
Visitor to examplesite.net orders an
examplesite.net promotional T-shirt
Order is entirely processed by micro-manufacturer
Recent investment in Zazzle by John Doerr (KPCB)
and Ram Shriram (Sherpalo Ventures)
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Future Developments
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MC to be Mainstream by 2009
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Prediction by William Halal,
management professor at
George Washington University
Growth of ‘Online Factories’
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Online factories where
customers can not design their
own products with easy-to-use
software
EMachineShop.com – download
software, design product; send
completed design which will be
manufactured within a few
days
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More Future Developments
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Personalized location-based services
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Development of Digital Fabrication
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Jambo Networks (Jambo.net)
Uses Wi-Fi to find people you know, or
want to meet
Sends message to Laptop, PDA,
cellphone: “Joe Bloggs is nearby”
Digital Fabrication ‘3D printing’ from
data files
User might buy a product online as a
datafile and create it at home using a
3D printer
Cost of Digital Fabricators currently
prohibitive
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MadeForOne.com Story
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M.Sc. Dissertation on use of e-commerce by mass
customizing enterprises
Other MC sites good for concept descriptions, but no
regular news outlet
Content free to readers, revenue raised from advertising
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Cost per click (Google AdSense), Cost per action (Affiliate
marketing)
Directory of sites, discussion forum
Email newsletter about to be launched – retain readers
Want greater interactivity with visitors  new mass
customized services soon e.g. personalized e-cards
Might sell to publishing house if price was right!
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Your Blogs
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Potential to develop into long-term
projects
Try and take a particular angle on your
subject
Ways of bringing back visitors
Useful as a (CV) resume item
Interesting topics
31 October 2005
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References / Sources of
Information
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31 October 2005
www.MadeForOne.com (naturally!)
www.mass-customization.de
Living in Dell Time
(www.fastcompany.com/magazine/88/dell.html)
Pine, B. Joseph, Mass Customization: The New Frontier
in Business Competition, Harvard Business School Press,
ISBN 0-87584-946-6 (paperback)
Pine, Joseph and Gilmore, James (eds): Creating
Customer-Unique Value through Mass Customization,
Harvard Business School Press ISBN 1-57851-238-7
Anderson, David M.: Build-to-Order & Mass
Customization; The Ultimate Supply Chain Management
and Lean Manufacturing Strategy for Low-Cost OnDemand Production without Forecasts or Inventory, CIM
Press, ISBN 1-878072-30-7
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