mass customization cracking the code of mass customization global sourcing and supply chain...

Mass Customization

Cracking the Code of Mass Customization

Global Sourcing and Supply Chain Management

Mass Customization

Shravan, Unniraja, Vipul, Lukas 2

1. Introd….1. Edit edit2. Edit3. edit

2. Topic 21. edit2. Eidt3. Deidt

Agenda

16.11.2015

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, high-volume, 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

Choice Navigation

Robust Design Process

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

Shravan, Unniraja, Vipul, Lukas 14

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16.11.2015

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