Mass customization
Encyclopedia
Mass customization, in marketing
, manufacturing
, call centres and management
, is the use of flexible computer-aided manufacturing systems to produce custom output. Those systems combine the low unit costs of mass production
processes with the flexibility of individual customization.
Mass customization is the new frontier in business competition for both manufacturing and service industries. At its core is a tremendous increase in variety and customization without a corresponding increase in costs. At its limit, it is the mass production of individually customized goods and services. At its best, it provides strategic advantage and economic value.
Mass customization is the method of "effectively postponing the task of differentiating a product for a specific customer until the latest possible point in the supply network."
The concept of mass customization is attributed to Stan Davis in Future Perfect and was defined by as "producing goods and services to meet individual customer's needs with near mass production efficiency". concurred, calling it "a strategy that creates value by some form of company-customer interaction at the fabrication and assembly stage of the operations level to create customized products with production cost and monetary price similar to those of mass-produced products".
Companies that have succeeded with mass-customization business models tend to supply purely electronic products. However, these are not true "mass customizers" in the original sense, since they do not offer an alternative to mass production of material goods.
Service industries are also waking up to the power of a mass customization orientation. Call centres are leveraging Agent-assisted automation
to build pre-programmed, pre-recorded call flows to handle customers' inquiries. The agent executes the process, varying it only as they need to because of something the customer says or needs, as opposed to varying everything, every time.
He suggested a business model, "the 8.5-figure-path", a process going from invention
to mass production to continuous improvement to mass customization and back to invention.
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
, manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
, call centres and management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...
, is the use of flexible computer-aided manufacturing systems to produce custom output. Those systems combine the low unit costs of mass production
Mass production
Mass production is the production of large amounts of standardized products, including and especially on assembly lines...
processes with the flexibility of individual customization.
Mass customization is the new frontier in business competition for both manufacturing and service industries. At its core is a tremendous increase in variety and customization without a corresponding increase in costs. At its limit, it is the mass production of individually customized goods and services. At its best, it provides strategic advantage and economic value.
Mass customization is the method of "effectively postponing the task of differentiating a product for a specific customer until the latest possible point in the supply network."
The concept of mass customization is attributed to Stan Davis in Future Perfect and was defined by as "producing goods and services to meet individual customer's needs with near mass production efficiency". concurred, calling it "a strategy that creates value by some form of company-customer interaction at the fabrication and assembly stage of the operations level to create customized products with production cost and monetary price similar to those of mass-produced products".
Implementation
Many implementations of mass customization are operational today, such as software-based product configurators that make it possible to add and/or change functionalities of a core product or to build fully custom enclosures from scratch. This degree of mass customization, however, has only seen limited adoption. If an enterprise's marketing department offers individual products (atomic market fragmentation) it doesn't often mean that a product is produced individually, but rather that similar variants of the same mass-produced item are available.Companies that have succeeded with mass-customization business models tend to supply purely electronic products. However, these are not true "mass customizers" in the original sense, since they do not offer an alternative to mass production of material goods.
Service industries are also waking up to the power of a mass customization orientation. Call centres are leveraging Agent-assisted automation
Agent-assisted automation
Agent-assisted automation is a type of call center technology that automates elements of 1) what the call center agent does with their desktop tools and/or 2) says to customers during the call...
to build pre-programmed, pre-recorded call flows to handle customers' inquiries. The agent executes the process, varying it only as they need to because of something the customer says or needs, as opposed to varying everything, every time.
Variants
described four types of mass customization:- Collaborative customization - (also considered co-creationCo-creationCo-creation is a form of market or business strategy that emphasizes the generation and ongoing realization of mutual firm-customer value. It views markets as forums for firms and active customers to share, combine and renew each other's resources and capabilities to create value through new forms...
) firms talk to individual customers to determine the precise product offeringProduct (business)In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...
that best serves the customer's needs (see personalized marketingPersonalized marketingPersonalized marketing is an extreme form of product differentiation. Whereas product differentiation tries to differentiate a product from competing ones, personalization tries to make a unique product offering for each customer.-Internet marketing:Personalized marketing had been most practical...
and personal marketing orientation). This information is then used to specify and manufacture a product that suits that specific customer. For example, some clothing companies will manufacture blue jeans to fit an individual customer. This is also being taken into deeper customization via 3D printing with companies like ShapewaysShapewaysShapeways is a 3D printing service. Users upload design files and Shapeways prints the objects for them or others. Users can have objects printed from a variety of materials, including food safe ceramics....
. - Adaptive customization - firms produce a standardized product, but this product is customizable in the hands of the end-userEnd-userEconomics and commerce define an end user as the person who uses a product. The end user or consumer may differ from the person who purchases the product...
(the customers alter the product themselves) - Transparent customization - firms provide individual customers with unique products, without explicitly telling them that the products are customized. In this case there is a need to accurately assess customer needs.
- Cosmetic customization - firms produce a standardized physical product, but market it to different customers in unique ways.
He suggested a business model, "the 8.5-figure-path", a process going from invention
Invention
An invention is a novel composition, device, or process. An invention may be derived from a pre-existing model or idea, or it could be independently conceived, in which case it may be a radical breakthrough. In addition, there is cultural invention, which is an innovative set of useful social...
to mass production to continuous improvement to mass customization and back to invention.
See also
- Custom-FitCustom-FitCustom-fit is a broad term which could be defined as tailor-made. To this respect, mass customization could be defined as a massive personalization or personalization for everybody....
- DellDellDell, Inc. is an American multinational information technology corporation based in 1 Dell Way, Round Rock, Texas, United States, that develops, sells and supports computers and related products and services. Bearing the name of its founder, Michael Dell, the company is one of the largest...
- MymuesliMymueslimymuesli is the first company that allowed customers to create their own breakfast cereals, or "muesli", hence the company's name "mymuesli". They were not among the first to apply the concept of mass customization to food but they were the first to be successful. Several other companies tried to...
- ManufacturingManufacturingManufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
- PersonalizationPersonalizationPersonalization involves using technology to accommodate the differences between individuals. Once confined mainly to the Web, it is increasingly becoming a factor in education, health care Personalization involves using technology to accommodate the differences between individuals. Once confined...
- Personalized marketingPersonalized marketingPersonalized marketing is an extreme form of product differentiation. Whereas product differentiation tries to differentiate a product from competing ones, personalization tries to make a unique product offering for each customer.-Internet marketing:Personalized marketing had been most practical...
- Product differentiationProduct differentiationIn economics and marketing, product differentiation is the process of distinguishing a product or offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as a firm's own product offerings...
- Product managementProduct managementProduct management is an organizational lifecycle function within a company dealing with the planning, forecasting, or marketing of a product or products at all stages of the product lifecycle....
- Rapid manufacturing
- Structure chartStructure chartA Structure Chart in software engineering and organizational theory, is a chart which shows the breakdown of a system to its lowest manageable levels. They are used in structured programming to arrange program modules into a tree. Each module is represented by a box, which contains the module's name...
- The Long TailThe Long TailThe Long Tail or long tail refers to the statistical property that a larger share of population rests within the tail of a probability distribution than observed under a 'normal' or Gaussian distribution...
- Variable Data PrintingVariable Data PrintingVariable-data printing is a form of digital printing, including on-demand printing, in which elements such as text, graphics and images may be changed from one printed piece to the next, without stopping or slowing down the printing process and using information from a database or external file...
External links
- http://www.masscustomhome.com Research on a mass custom design approach to sustainable housing at the Mackintosh School of Architecture, The Glasgow School of Art, UK
- http://www.milkorsugar.com International repository of mass customized products
- http://www.iimcp.org International Institute on Mass Customization & Personalization which organizes MCPC, a biannual conference on customization and personalization
- http://www.konfigurator24.de Online tool to create personalized exhibition booths and give aways
- http://www.citiuscorporation.com Cloud based configurator tool for Mass Customization