differentiation of products and the mass customisation
TRANSCRIPT
Differentiation of Products
And The Mass Customisation
Traditional business model
Built-to-forecast
Built-to-replenish
Monopolize
Business always try not to customise if they have a choice
"In the clothing industry, about half of all products are sold at a huge discount or shredded because they were manufactured in a size or color that nobody wanted,"
David Anderson, management consultant for Cost & Customization Consulting
Motivation
Customer relationship building, to win over the one-size-fit-all, low price products
Experience Economy, to make buying an creative, enjoyable experience
Optimisation of marginal utility
Customisation
Customisation VS small-batch production
eg. Swatch, Benetton, Book-on-demandMass-customisation features
Built-to-order (BTO) Customers have to wait One-of-a-kind
Customisation VS personalisation
Is engraving names on ball-pen mass-customisation?
Mass-customizing an objects usually affect its function
Customisation VS modularisation
Is IKEA cabinets and LEGO mass-customisation?
Post-production customisationDesign as variantsOne-of-a-kindEnhanced buying experience
Customisation VS Custom-made
Is cupboard from street-corner shop mass-customisation?
Predefined design variant(On-line) variant building interfaceOperator intervention free manufacturing, orReduce operator intervention by process
standardisationNear mass-production speed
In the electronics industry alone, sales of custom-manufactured goods will grow from $60 billion in 1998 to $150 billion in 2003, according to Technology Forecasters Inc.
For manufacturers in most industries, AMR's Burkett said, customization isn't "a question of if, but when."
Mass Customisation
Mass-customisation
VariationalProduct Structure
CustomisationInterface
FlexibleManufacturing
AdvancedLogistics
User input(Optional)
Major application
It reduces material stock and dead-stock Personal computers (Dell)
It makes a more manageable product-line Heavy machineries Automobile (Ford)
New buying experience Apparel Toys
Mega Tech approach
Agile production Flexible
Manufacturing Cell (FMS)
High-speed machining
Robots
Process improvement approach
Product Data Management (PDM)
Enterprise Resources Planning (ERP)
eg. DELL
My Twinn
Customers send in pictures of the child
Choose from 7 skin tones ranging
from porcelain to black brown
15 hair and eyebrow colors
4 eyelash colors 26 eye colors
IMX Mixing Station
Customer configure the colour and scent of lip gloss using a console interface
Machine whip up a batch of custom gloss on the fly
www.designinteract.com/features/
NIKE id
Web customers select the color and size of the footwear they want to buy
Place a message of up to eight characters on the back
The Web-based configuration system transmits the design to manufacturing systems at Nike factories in Asia, where the shoes are made
The shoes are sent directly to the consumer in two to three weeks.
Small batch approach
Layered ManufacturingRapid Tooling
Chaos stir-up by mass customisation
I want this radius increase by 5mm, make all necessary change to make it look as good as before
The motor is changed from Brand A to Brand B, change all necessary parts so that the product still work, and remind sales department that the product is now cheaper by $0.5
Tell me how much more time is need if the customer increase the order from 100,000 to 1,000,000 and what price should I charge, NOW
Comment by NIKE id
The service works through an amalgamation of homegrown and off- the-shelf software that includes online customer relationship management tools, a Web-based configurator and software that translates the dynamic HTML data into a format that can be processed by the legacy manufacturing systems operated by Nike's manufacturing partners in Korea and Taiwan.
"The configuration tools and other systems out there are pretty robust, but they don't typically operate at this level of detail," said Allen, who declined to reveal the software vendors involved in the project. "There was a lot of integration work."
Product data chain
Drawbacks to aware
Users not always know how to articulate what they want (NikeID has to check for bad IDs)
Too many options will: Make the configuration process time consuming Complicate the consumer interface Make error checking on spec. changes difficult
Very demanding on logisticsMaintenance headache