How to achieve successful mass customization?
To achieve successful mass customization, managers need first to turn their processes into modules. Second, they need to create an architecture for linking them that will permit them to integrate rapidly in the best combination or sequence required to tailor products or services.
Is automation the key to mass customization?
For mass customization, you need automation that is flexible enough to support the options you want to give your customers. In any case, investing in automation makes only sense if you produce large quantities. The larger your output, the easier it is to move toward mass customization. At the same time, you cannot give the customer total freedom.
What is mass customization in retail?
The flexibility of mass customization enables the customer or retailer to mix and match the modules into different configurations and eventually realize a final custom-made product. Mass customization is more common in the retail industry but may also apply to other fields.
What is the difference between mass production and customization?
Customization is the opposite of mass production. The customer gets exactly what he wants, individually customized to his needs. Of course, this takes time and effort as well as significant expertise and hence raises the price tag significantly.
How is mass customization applied to service firms?
Mass customization refers to a business process of providing customized goods and services that best meet individual customer's needs. It reaps the benefits of flexibility, integration, and personalization to produce custom-made products with low unit costs at near mass production efficiency.
What is mass customization and give example?
Mass customization is a technique that makes manufacturing processes flexible enough to produce products according to precisely what the customer wants while keeping costs at a low level. This concept makes the most of both personalization and mass production, which leads to a cost-efficient manufacturing system.
What techniques or approaches can be used to achieve mass customization in practice?
Four Approaches According to Gilmore and Pine (1997), there are four main approaches to mass customization: collaborative, adaptive, transparent and cosmetic.
How can a company use mass customization to effectively meet the needs of individual customers?
A common way to carry out mass customization is to offer a basic package for a product and then offer customers a range of features they can add or subtract. That way, businesses can provide a certain set of options for modifying a product without the costs associated with making a 100% unique product.
What does mass customization in business mean?
Mass customization combines the efficiencies of mass production with the ability to customize individual products according to customer specifications. Previously limited to software and services, digital manufacturing techniques have made mass customization viable for physical products as well.
What is the main characteristic of mass customization?
The key feature of mass customization is the capability to integrate the product varieties derived from the individual customer's needs with repetition of modularity and the efficiency of mass production, so that the products are affordable due to low product cost achieved by the scale of economy in production.
Why is mass customization important?
Mass customization is a useful marketing solution for acquiring and retaining consumers and building long term relationships with them. As consumers and retailers co-create new products, consumers gain an opportunity to purchase more favorable products, and their willingness to pay extra costs increases.
Which of the following is an example of mass Customisation?
Mass Customisation Product Examples The retail companies, creators of software, financial service companies, modular home builders, furniture manufacturers, and others are some of them. Companies offering customisation gain an advantage over the companies which offer only generic products.
Which of the following best describes mass customization?
Which of the following best describes mass customization? It is the production of goods or services tailored to meet customers' individual needs cost-effectively.
What company does mass customization?
NikeNikeId. Back in 1999, Nike was the first to implement the idea of mass customization. With NikeiD, the company created the industry's first popular platform, allowing potential customers to buy shoes with a customized look and feel in terms of comfort, color, and style.
What are the advantages and disadvantages of mass Customisation?
Pros & Cons of Mass CustomizationHigher customer retention since products have options and are tailored to personal tastes.Fewer unfinished goods need to be stored, reducing overhead costs.Quick, efficient production process from start to finish.A higher price point for customized products, which means higher profits.More items...
Is Netflix an example of mass customization?
Segmentation is a cornerstone of any mass customization practice. Netflix, for example, does not laboriously create new home screens for each of its customers. It divides its subscriber base into segments (called “taste communities”), and serves each of these segments a customized version of its product.
Which of the following is an example of mass customization?
Examples of Mass Customization Certain furniture companies offer mass customization by providing multiple options for various components or features. This flexibility may include different fabrics, furniture legs, or pieces that combine in numerous configurations.
What is an example of customization?
What is customization? Customization is done by the user. Users are asked to identify their preferences and they are then shown things that they prefer. For example, when customers sign up for Netflix, the service asks users to select a few shows they like and then displays a list of options based on those choices.
Is Netflix an example of mass customization?
Segmentation is a cornerstone of any mass customization practice. Netflix, for example, does not laboriously create new home screens for each of its customers. It divides its subscriber base into segments (called “taste communities”), and serves each of these segments a customized version of its product.
Which of the following is not an example of mass customization?
The answer is Option A. A custom degree program created by a college is not an example of mass customization.
What is mass customization?
Mass customization or made-to-order allows customers to receive personalized products and services at a relatively low cost. Using this business strategy, a company delivers unique value to its consumers based on specific requirements. The flexible manufacturing process involves using computer-aided information and individual customization to design and develop a custom-made product. Stan Davis, a business thinker, first introduced the concept in his book “Future Perfect.“
What is customization technique?
In this customization technique, customers get a standard product or service with the option to personalize, modify, or reconfigure it per their preferences.
What is a built to order strategy?
This business strategy utilizes a flexible manufacturing process. It also integrates information technology for developing items with personalized features compared to generic ones. It gives businesses a competitive advantage and increases their economic value. Industries like retail, financial services, software and technology, home construction and interiors, etc., use this built-to-order approach to satisfy consumer needs.
What is the process of businesses providing unique products and services within a standard package to specific customers without informing them that?
It is the process of businesses providing unique products and services within a standard package to specific customers without informing them that they are customized. Companies accomplish this by observing consumer behaviors over time and predicting their preferences without interacting with them directly.
How to calculate unit cost?
It is calculated by adding fixed and variable expense and dividing it by the total number of units produced. read more
Why does the burden of cost on manufacturers to maintain excess inventory levels?
Puts burden of cost on manufacturers to maintain excess inventory levels because of variable demand
What is built to order?
Built-to-order is the cost-effective and large-scale production of custom-made products. Mass production is the production of standardized products on a large scale.
WHAT IS MASS CUSTOMIZATION?
It deals with making changes to a product or service to satisfy a given consumer group. The changes could be as small as a variety of different flavors or colors or as complex as developing a completely new product for a particular client-base.
Why is mass customization important?
Moreover, the concept is also utilized in the development of marketing strategies for product and service lines and during the process of recognizing the target audience of a brand or business.
What is chemstation delivery system?
For instance, Ohio based detergent manufacturer, ChemStation, uses an inventive distribution system, which makes use of 41 digitally connected production units all across the country to combine its custom cleaning products. The company began offering customized detergents to clients according to the kind of stains they were battling against.
How long does it take for mass customization to become a household name?
Mass customization is going to take a few years before it becomes a household name. Even then, it will more likely be a rough adaptation of conventional mass production, according to some theorists. On the contrary, products that cannot exist without customization will be customized no matter what happens to this concept.
Why has the power structure changed forever?
In fact, with the alert public of today, the power structure has been altered forever because businesses have to focus on customers if they wish to stay in the competition and this shows that mass customization will keep moving forward.
How has the internet changed the delivery system?
This has renewed the delivery systems with customers always staying on top of the updates through various mobile apps, emails, regular updates from the company or the online progress tracking system (if the company has any).
What is collaborative customization?
Through decreasing options for an individual client, a collaborative customizer helps to understand the needs of the customers and strives to make it clear to them .
How does mass customization work?
Certainly, technology must augment people’s knowledge and skills, but the elements of mass customization require that technology must also automate the links between modules and ensure that the people and the tools necessary to perform them are brought together instantly. Communication networks, shared databases that let everyone view the customer information simultaneously, computer-integrated manufacturing, workflow software, and tools like groupware (such as Lotus Notes) can automate the links so that a company can summon exactly the right resources to service a customer’s unique desires and needs.
Why did Westpac become a mass customizer?
It wanted to install software building blocks that would allow it to create new financial products like mortgages and securities more quickly. Strategically, the move made sense. Deregulation had spawned a dizzying array of new products and services, and intensifying competition had caused significant downward pressure on prices.
How does technology affect mechanistic organizations?
In mechanistic organizations, the primary use of technology is to automate tasks, replacing human labor with mechanical or digital machines. People are sources of variation and are relatively costly, so mass producers often try to automate their companies as much as possible. This has the natural effect of reducing the numbers and skills of the work force.
Why is customer feedback important?
Capturing customer feedback on capability failures is crucial to sustaining any advantage that mass customization yields. A company that does this well is USAA, which targets its financial services and consumer goods to events in a customer’s life, such as buying a house or car, getting married, or having a baby. Its information system allows sales reps to get customer feedback quickly on the phone and route it instantly to the appropriate department for analysis and action.
What is instantaneous process?
1. Instantaneous. Processes must be able to be linked together as quickly as possible. First, the product or service each customer wants must be defined rapidly, preferably in collaboration with the customer. Mass customizers like Dell Computer, Hewlett-Packard, AT&T, and LSI Logic use special software that records customer desires and translates them into a design of the needed components. Then the design is quickly translated into a set of processes, which are integrated rapidly to create the product or service.
How did Westpac improve?
Westpac tried to leapfrog continuous improvement by going from mass production directly to mass customization. The challenges of automating inflexible processes, building on ossified products, and trying to create a fluid network within a hierarchical organization—particularly at a time when the company was in poor financial condition due to intensifying competition in depressed markets—proved too difficult. Westpac has had to scale back significantly its ambitious dreams of becoming a tailored-product factory.
Is mass customization continuous improvement?
But as Toyota, for one, seems to have finally realized, mass customization generally cannot be a subset of continuous improvement.
What is mass customization?
Mass customization promises us individually customized products at the price of a mass-produced item. We get something that is customized to our needs but doesn’t have the luxury price tag usually associated with custom-made products. While challenging, numerous different companies have managed to achieve customization with only marginally higher prices than standard products. In this post I want to look in more detail at how to achieve mass customization.
Why is automation important for mass customization?
Often, however, automation reduces flexibility. For mass customization, you need automation that is flexible enough to support the options you want to give your customers. In any case, investing in automation makes only sense if you produce large quantities. The larger your output, the easier it is to move toward mass customization.
What happens if you have an automation system that can be programmed to flexibly adapt?
In general, if you have an automation system that can be programmed to flexibly adapt, you have the potential to automate the customization and therefore reduce the price of customization.
What is customizing a suit?
Customization is the opposite of mass production. The customer gets exactly what he wants, individually customized to his needs. Of course, this takes time and effort as well as significant expertise and hence raises the price tag significantly. For example, a mass-produced suit can be as low as $200, whereas a custom suit can easily cost ten times as much.
What companies make mass customization?
There are many companies that move toward mass customization. Besides automotive (which has done it for decades), there are many other industries. For example, the German company Mymuesli sells a higher-end breakfast cereal mix, but also gives the customer the option to design their own muesli mix. From hundreds of potential ingredients you can choose which ones you like, at a price only marginally higher than the premixed cereals from the same company.
What is final assembly?
Only during the final assembly is the final customized version of the car produced. Much effort goes into creating a flexible final assembly line that can handle such a wide variety of different products. For example, it is estimated that BMW sells, on average, only two identical cars on of every variant per year.
What is the fourth corner of a business?
For completeness sake, the fourth corner is the death of a company . If your products have less customization and higher prices than the competition, it will be very difficult to have a good business model. You have a significant risk of ruining the company because the competition is better.
What is mass customization?
Mass customization is the middle ground between personalized products and mass production. In essence, the product a customer receives won't be an original, but it won't be a copy either.
What are the types of mass customization?
While the concept behind mass customization is simple, the term itself is broad. Mass customization for one company might look dramatically different from another company's utilization. Under the umbrella of mass customization are four subtypes:
The benefits of mass customization
Understanding the types of mass customization helps clarify the benefits for many companies. Here are the five overarching benefits of mass customization.
Final thoughts
Nearly every type of business can benefit from some aspect of mass customization. From giving your customers options to choose from to adding personal elements to packaging and delivery, mass customization is an incredible opportunity to connect and profit.
What Is Mass Customization?
Mass customization is the process of delivering market goods and services that are modified to satisfy a specific customer's needs. Mass customization is a marketing and manufacturing technique that combines the flexibility and personalization of custom-made products with the low unit costs associated with mass production. Other names for mass customization include made-to-order or built-to-order.
Why is mass customization important?
Mass customization can also help a company with the costs associated with excess inventory.
What companies use mass customization?
Various companies employ mass customization techniques, including retail companies, software creators, financial services companies, and modular home builders. Companies that offer mass customization can give themselves a competitive advantage over other companies that only offer generic products.
What is collaborative customization?
Collaborative customization: companies work in partnership with clients to offer products or services uniquely suited to each client
What is innovative manufacturing?
Innovative manufacturing techniques help companies produce interchangeable parts that can be combined in a variety of ways to build a cost-effective product that satisfies a specific customer's needs.
What Is Mass Customization?
Approaches to Mass Customization
- There are four basic approaches to mass customization, depending on customization of the product itself or its representation.
How It Is Helpful For Entrepreneurs?
- It is true that mass customization caters to the masses, but that does not mean that it is only meant for big corporations and brands. In fact, it provides a lot of assistance, food-for-thought and motivation to entrepreneurs as well. First and foremost, as you apply the concept of mass customization to the designing process, as an entrepreneur you will have a remarkable amount …
Insights Into Modern Concepts Related to Mass Customization
- How mass customization has evolved?
The global production industry began with mass production, which focused on producing standardized products for the masses. However, the focus began shifting to the consumers in the 20th Century where all commercial sectors such as retail, service, technology, and manufacturin… - Distribution Channels
An effective distribution and sales system is required to enable customization, as it needs a system through which the product could be channeled to the end customer. In fact, some companies use the distribution method as the mass customization process whereas other com…
Mass Customization Challenges
- Challenges with higher costs:Probably the biggest challenge of mass customization is the fact that it is not an appropriate option for all markets, clients and products. Most customers are not interested in having a customized light bulb or washing detergent. Moreover, customized products cost more and clients have to wait in order to get them. For instance, regular Chinos b…