Mass Customization: How to Meet Customer Demands and Improve Production
By: Dan Johnson
Modern discrete manufacturing technologies make mass customization easier than ever before. As a growing trend in manufacturing, it provides significant benefits to customers and manufacturers alike. For consumers, mass customization enables buyers to tailor products to their unique, individual needs in ways never before possible. For manufacturers, it provides a competitive edge and improved profit margins resulting from consumer willingness to pay more for customization.
One of the major drivers of mass customization is the commoditization of previously unique products. Innovative, flexible design and production technologies have made it faster, easier, and cheaper to knock-off new product designs in record time. It wasn’t too long ago that new products took two or more years to come to market, enabling companies to corner marketshare and reap the benefits (and profits) of being the only player in a new market. Today, competitors can create similar products in a few months or even weeks, compromising the ability to be the dominant player in a particular market for long. The only way to create a meaningful product-design differentiator is through customization.
In many ways, mass customization can be thought of as an extension of lean and agile manufacturing. Using a lean business model, mass customization utilizes a batch size of one item to meet individual customers’ demands. This requires a robust ERP system and highly-engaged supply chain partners equipped to handle the unique picking, packing, shipping, and delivery issues that can come with single-item orders.
The key is to keep the customization part of any order out of the equation until the last possible moment, enabling the manufacturer to use standardized processes and components for as long as possible in the supply chain. This, of course, can put a lot of stress on supply chain management (SCM), so it’s important for the supply chain to be as lean and agile as possible. This requires topnotch efficiency as well as integration and collaboration between the manufacturer and its suppliers and customers.
This heightened level of cooperation and integration leads some manufacturers to utilize a hybrid SCM strategy combining lean and agile models with something called a “postponement” strategy. Postponement is simply the act of using standardized processes and materials to partially manufacture a product, right up to the point of customization, and then stockpiling the partially-completed item until it’s ordered for customization. This speeds up the customization process, minimizes waste and inefficiencies, enabling the manufacturer to benefit from a mass production economy of scale on a significant portion of the production while providing customers with the benefit of customization.
In addition to sophisticated ERP and SCM systems, manufacturers looking to employ mass customization as a competitive business model should consider several key technologies that can be instrumental in meeting customer demands and improving production:
- Social media can help manufacturers interact with consumers and gauge consumer trends and preferences in real time to focus customization options.
- Online interactive product configurators can provide a fast and user-friendly way to collect customer customization requests and provide a satisfying user experience.
- 3D scanning and modeling make it easier to create virtual prototypes and visually confirm customer requests by providing a digital proof.
- Recommendation engines can help customers configure products and prevent them from creating combinations that are either too impractical or expensive to produce or that are bound to be disappointing when customers receive them.
- Smart algorithms for dynamic pricing enable manufacturers to more accurately price customized products based on difficulty and availability. As trends and demands shift, pricing can shift as well, adjusting to provide the lowest price for products that are easiest to produce at any given time.
Controlling manufacturing costs is crucial for profitable mass customization. Product design modularization, advanced ERP and SCM systems, and flexible production technologies to aid schedule and managing shop floor operations can all contribute to successful mass customization.
Done properly, it all adds up to product mass customization that’s profitable for the manufacturer and provides real value – not just a novelty factor -- to the customer.