Mass Customization
= The combination of mass production techniques, but delivering products tailored to the individual. "Mass customization is a half step towards true custom manufacturing since it offers the consumer a few, set choices about a core, unchanging product along specific, pre-defined configurations". [1]
Description
Frank Piller et al:
"In line of business strategies focusing on the creative consumer, mass customization can be regarded as the first elaborated concept, with a history of more than two decades (the term was coined in 1987 by Stan Davis). Mass customization now seems to become the standard of the 21st century. The term denotes to an offering that meets the demands of each individual customer, but that still can be produced with mass production efficiency. To reach this efficiency requirement, a mass customization system is defined by a fixed solution space, characterized by stable but still flexible and responsive processes. As a result, the costs associated with mass customization should allow for a price level that does not imply a switch into an upper market segment. The solution space is utilized by customers who are integrated in the value creation process of the manufacturer by defining, configuring, or modifying their individual solution within a given set of choice options. Without the customers’ deep involvement, the manufacturer would be unable to adequately fill each individualized product demand. Dedicated toolkits should enable the customers to perform this configuration tasks on their own.
A great industrial example of mass customization is American Power Conversion (APC). APC sells, designs, produces, delivers, and installs large complex infrastructure systems for data centers, and components for these systems. At the heart of its mass customization strategy of this company are a module-based product range and the use of product configuration systems for sales and order processing. In addition, the company has implemented a manufacturing concept, which involves the mass production of standard components in the Far East, and customer order-based final assembly at various production sites around the world within close customer proximity. The results of applying mass customization principles included a reduction of the overall delivery time for a complete system from around 400 to 16 days. Also, production costs were significantly reduced. At the same time, the company’s capability for introducing new products has increased dramatically. Due to the modular system architecture, new component technologies can be integrated within a matter of days, and not months as before.
Mass customization has been seen as the result of new flexible manufacturing systems like rapid manufacturing. But the real drivers of mass customization are consumers not any longer willing to compromise, and new tools allowing them to design their own offerings." (http://www.we-magazine.net/volume-01/mass-customization-and-beyond/)
Consumer Mass Customization
Frank Piller et al:
"many initiatives of consumer mass customization have been developed recently. Indeed, not a month has gone by without a major mass customization initiative by an established company or a new start-up. Some good examples of mass customization in consumer goods that were launched recently are Germany’s MyMuesli (customized cereal), Blends For Friends (create your own tea blend), Conde Nast’s TasteBook (customized cookbook with your favorite recipes), or John Maeda’s innovative configurator for Reebok that turns the favorite song of a user into a custom sneaker style. A segment of mass customization that has been exploding recently is the market of user-created photo books, including providers such as Picaboo, LuLu, CeWe, Blurb, Moo, and many others. Zazzle and Cafepress take a similar approach of selling custom printed T-shirts, coffee mugs, mouse pads, and more. There are also mass customizing companies producing children books (flattenme), customized jewellery (Paragon Lake), dolls (My Twinn) and even bras (Zyrra). All these companies reported high double-digit sales and growth in the last year.
Another very interesting approach has Zapfab or Fabidoo, two user manufacturing start-ups which offer a new way of delivering individualized, customized products. They are combining the creativity of user-generated content with the power of 3D Printing (fabbing). 3D Printing is rapidly gaining ground as a way of creating real, physical objects from 3D design data. Zapfab provides an easy way to access this technology: Once you have generated a 3D design you can choose to have it 3D printed: Zapfab will 3D print the design and deliver the finished object to you. Or consider the great custom USB sticks at Fabidoo, turning a ubiquitous commodity into a real piece of personality.
Mass customization offers companies the flexibility to minimize new product development risk, but this flexibility does not come without costs. This strategy requires a redesign of the products and processes. This includes the creation of modular product family structures and often heavy investments in new flexible machinery equipment. For mass customization, also an elicitation system has to be in place to access the preferences of each individual customer and to transfer them into a precise product definition. Thus, while mass customization has plenty of opportunities, it will not become the dominating strategy of user co-creation." (http://www.we-magazine.net/volume-01/mass-customization-and-beyond/)
Typology
Types of Modularity
From the Replicator blog:
" In the book Mass Customization author Joseph Pine offered up a taxonomy of customization/modularity that helps clarify thinking on the subject.
Component Sharing Modularity
Component swapping modularity enables customization of products by reusing a functional module across a variety of products. It could be a single motor across a line of power tools or, in the case of Bug Labs, reusing the computational module to enable customization of consumer electronics. In most cases the end user can’t customize the product themselves, but the modularity enables cost effective development for niche products. Value is created by reducing complexity in the supply chain which provides time and margins to introduce more products.
Component Swapping Modularity
Component swapping modularity adds value to commodity products. The print on demand market is a great example of of this, the base products are blank postcards, books, and coffee mugs, but when photo modules are added by customers significant value is created. Moo has created a service that allows people to design business cards and have unique images on each card. Unlike component sharing modularity the bulk of the value comes from what is placed on the “base”, not the base itself.
Cut-to-Fit Modularity
Cut-to-fit modularity is as simple as it sounds, you have a product that is functional at a wide range of sizes and sell just enough to meet the customers needs. Made to order clothing is the classic example, but the funky soap store Lush sells its esoteric offerings to customers by cutting off chunks of soap from large decorative batches.
Mix Modularity
Mix Modularity products are comprised of two or more components mixed together to provide additional value. Industrial soaps are the canonical example, but YouBar is a more customer friendly example. YouBar allows you to tailor your ideal energy bar combining various nuts, berries, flakes, and supplements. The individual elements aren’t hard to find or prepare, but the service simplifies the life of the customer.
Bus Modularity
Bus Modularity enables customization by providing an architecture that can contaim a diverse set of components while maintaining control over the final product. In the case of Ridemakerz they developed a magnetic connection system that allows kids to design a custom car by combining chasis, wheels, engines, and other parts while ensuring the finished product still looks like an attractive car.
Sectional Modularity
Sectional Modularity creates value by enabling the user to create something with a kit of parts then rearrange it if required. Office cubicles are one example of this, but Lego is far more fun and the images are infinitely better." (http://replicatorinc.com/blog/2009/04/6-types-of-mass-customization/)
Three types of Mass Customization
Sung Park:
"1. Digital Front End/Digital Back End
This describes companies like Amazon that serve unique pages based on your interests in a completely digital fashion.
2. Digital Front End/Physical Customization and Assembly
Most current mass customization companies would fall into this bucket. You design something with a web based cad interface and then some factory produces it using modified traditional manufacturing processes. Think NikeID, Fashion Playtes, or Paragon Lake.
3. Sensor based Front End/CAD-CAM Back End
This is a more passive experience best illustrated by Brontes. In their case a sensor makes a model of your mouth and then automated equipment (a 3D printer) produces a physical copy of the scan. There is very little human involvement or intervention." (http://replicatorinc.com/blog/2009/10/mass-customization-can-create-value-profit/)
Discussion
Mass Customization vs. Personalization
Frank Piller on the never-ending debate on the difference between mass customization and personalization.
"So: Is this the same, something fundamentally different, or something in between?
The starting point for mass customization and personalization fundamentally is the same: To turn customers’ heterogeneous needs into a competitive advantage. Or, as Bas Possen, a Dutch mass customization pioneer states his as the vision of his company (customax.com): "In general, too little use is made of the advantage that all people are different."
Bruce Kasanoff provided a good definition of personalization during his keynote at the MCPC 2009 conference in Helsinki:
- "After years of trying to simplify [the definition of] personalization, I finally got it down to two words: Personal = Smarter. The more you customize, the smarter you get. The smarter you get, the more competitive you become. It really is that simple. Doing it, of course, takes a lot of work."
According to Bruce's definition, personalization is using technology to accommodate the differences between people. Done right, it's a win/win strategy for providing a better outcome for both the service provider and the individuals involved.
For example, if a doctor gives a patient a test to determine which treatment will work best for her before the treatment starts, that's personalization. Likewise, if a company gives their clients the option to tell their service center when and how to contact them, that's also personalization.
Mass customization then could be seen as a process for implementing personalization.
Stan Davis, who initially coined the term in 1987, refers to mass customization when
- “the same large number of customers can be reached as in mass markets of the industrial economy, and simultaneously […] be treated individually as in the customized markets of preindustrial economies”.
B. Jospeh Pine II then defined mass customization in his 1993 seminal book as
- “providing tremendous variety and individual customization, at prices comparable to standard goods and services” to enable the production of products and service “with enough variety and customization that nearly everyone finds exactly what they want”.
A pragmatic definition was introduced by Mitchell Tseng and Roger Jiao (2001). According to them, mass customization corresponds to
- “the technologies and systems to deliver goods and services that meet individual customers’ needs with near mass production efficiency.”
Often, the mass customization definition is supplemented by the proposition that the individualized goods do not carry the price premiums associated traditionally with (craft) customization. However, we found that consumers are frequently be willing to pay a price premium for customization that reflects its increment of utility. Hence, I today opt for not including a price proposition into the definition of mass customization.
Also, mass customization does not demand lot sizes of one. Custom products can be produced in larger quantities for an individual customer. This frequently happens in industrial market, when, for example, a supplier provides a custom component that is integrated in a product of the vendor.
Indeed, one of the biggest lessons from my past research is that there is no one best way to mass customize. Take, for example, the widespread belief that mass customization entails building products to order -- a belief that also I followed for a long time. But today I agree that this is not necessarily true.
Customers are looking for products that fit their needs, and they do not necessarily care whether those offerings are physically built to their order or whether those items come from a warehouse – just as long as their needs are fulfilled at a reasonable price."
In summary:
" Both personalization and mass customization push a company towards being more responsive to the marketplace and thus being more nimble. Both result in a firm that can react faster and more effectively to volatility. Both enable a company to build defendable competitive advantages, because both require a firm to track, understand and accommodate the needs of its customers.
In the end, it is not the term, but the result and value created by applying these concepts. The core point I want to make here is that mass customization should not be seen as a dedicated business model or a specific form of competitive strategy." (http://mass-customization.blogs.com/mass_customization_open_i/2010/10/term-wars-personalization-versus-mass-customization-a-review-of-the-definitions.html)
Examples
- Spreadshirt, at http://www.spreadshirt.net/
- mi:adidas, at http://www.miadidas.com/
- Edelwiser, at http://www.edelwiser.com/