Mass Customization
Cracking the Code of
Mass Customization
Global Sourcing and Supply Chain
Management
Mass Customization
Agenda
1. Introd….
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2. Topic 2
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Shravan, Unniraja, Vipul, Lukas
16.11.2015
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Mass Customization
What is Mass Customization ?
• Strategic Mechanism / Process for aligning an organization
with its customers need.
• It aims to deliver product and services that best meet
customers need with near mass production efficiency.
• “Today I define Mass Customization as the low-cost, highvolume, efficient production of individually customized
offerings“. – Joseph Pine
• Managers must tailor process to an existing business and
move towards goal (satisfy customers what they want,
when they want )
Mass Customization
Development of Mass customization
The paradigm shift to mass customization is mainly driven by 3 forces
• Market Demand –”It is my belief that the mass market is dead and segmentation
has progressed to the era of mass customization.” (Kotler -1989)
• Market competition – Product variety is exploding while product life cycle is
shortening.
• Technological revolutions – Flexible manufacturing systems allow manufactures to
quickly adapt to changes without incurring high penalties in terms of cost and lead
time.
Mass Customization
DELL – A pioneer in Mass Customization
Push (70 % BOM) Pull (30 % BOM)Supply Chain
Strategy
• Minimal Inventory counts.
• Direct Sales
• Built to order platform
• Eliminate Markup
• Direct User support 24*7
• Strong Vendor base.
Dell
Mass Customization
Nikeid
Mass Customization
BMW- Mini Cooper Online Tool Kit
Mass Customization
What is common in these examples?
• they all have turned customers’ heterogeneous needs into an opportunity to
create value .
• Challenged the “one size fits all” assumption of traditional mass production.
• customers were treated as individual with products tailored to their specific needs
Mass Customization
#3 Organizational Capabilities for Mass
Customization
Solution
Space
Development
Robust
Design
Process
Choice
Navigation
Mass Customization
Solution Space Development
• Company needs to identify its customers’
idiosyncratic needs – specifically, the
product attributes along which their
customers’ needs diverge the most.
• to provide customers with a design tool
like CAD system with easy interface. (eg:
concept lab of Fiat 500 ; where 160,000
designs from customers)
• Product concepts – “ Virtual concept
testing “ (eg: Adidas AG success)
• Learn the customer preference by
analyzing browsing behavior and can
develop refined solution space. (eg:
Pandora.com uses this feedback to
realign)
Mass Customization
Robust Process design
• reuse or recombine existing organizational value chain
resources.
• making organization automation more flexible or create
more process modularity. (eg: BMW Mini factory relies
on individual production cells)
• Adaptive Human capital - managers and employees to
deal with new and ambiguous tasks to offset potential
rigidness in process structures.
Mass Customization
Choice Navigation
• Many choices can lead to “paradox of
choice” .
• “Assortment Matching” is one approach.
• Fast cycle, trail – and –error learning
approach.
• Embedded configuration – customized
solutions.
Mass Customization
Choice Navigations
Mass Customization
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Shravan, Unniraja, Vipul, Lukas
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16.11.2015
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