Skip to main content

Mass Customization vs Lean


Trends in technology has enabled companies to take customized or diverse orders from customers. Internet has also created many opportunities for companies to make mass customization easier. In the HBR article by Pine and Boynton, they explains how continuous improvement and mass customization are different. They also point out that continuous improvement should be should be a pre-requisite for mass customization. Toyota failed to differentiate mass customization and continuous improvement. They found out hard way that these two concepts are different in terms organizational structures, training, management and customer relations. In my opinion, mass customization in one way reduces waste expenditures and creates value for customers by giving them what they want. On the other hand, there are challenges such as finding right workforce with vast amount of creativity, flexibility, breaking cross functional teams, long response times etc that are all required to make mass customization work. Mass customization has more benefits that outweigh cons. Meeting customer demands is more likely to be effective. Mass customization needs close communication between the firm and its customers compared to traditional production.

I am not sure if a complete or true mass customization is possible where customer has total freedom.  Modularity or setting the right amount of customization options will be the key for mass customization success. Pine talks about 4 process modules, one of which is being “cost less”. Apart from initial investment, the system should add very little cost later on while making the product for mass customization to work. Probably to gain some control on costs, companies offer modularity. For example, we know that Dell eliminated mediators in its supply chain. It interacts directly with its customers via their website. They give customers the option to choose from only from a set of options such as different memory sizes, processor speeds, hard disk sizes etc. This also removes/reduces certain steps in supply chain such as wholesalers and other middlemen thus making the operations more cost-effective. 

One should analyze if mass customization works for their business or not. The nature of the product also impacts the degree of mass customization. Some products may not be suitable mass customization. As mentioned in our Operations & Supply Chain class by Dr. Agarwal, public utilities have to be homogeneous and customization is not an option due to regulations and other risks involved.

Continuous improvement on the other hand can only be done on known or established processes so that wastes can be eliminated. My internship project requires me to coordinate various admin tasks for a continuous improvement program. From what I see, the employees that initiate the lean projects are motivated by their managers that encourage them to participate in lean training. After training the employees learn draw flow charts of their work processes and determine which processes add value and remove the non-value adding steps. To do so, they need to have full understanding of the processes and how the function affects others as well. 

At the end of the day, manufactures/companies love low operational costs and short lead times. This is possible with lean but, is a challenge in mass customization. In my mind I have questions such as, can continuous improvement be done at in mass customization that offer modularity? When modularity is offered, the operations become sort of predictable. I can’t think of how agile the entire supply chain management should be to achieve low cost, high quality, individually customized product that customer wants especially in an ever-changing market. 

Comments

Post a Comment

Popular posts from this blog

Two Sides of Corporate Social Responsibility

Corporate Social Responsibility (CSR) -- it is the hottest topic out there. Should we trust that companies live up their values or there are any underlying motives? But, let's first start by exploring the definition of Corporate Social Responsibility (CSR). It is defined as the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life ( World Business Council on Sustainable Development, 2000 ). So, CSR is based on the belief that companies make positive contributions to society. Some examples of CSR activities that organizations participate to be socially responsible are as follows: Philanthropic CSR- Companies donate to the needy via charities. Their donations include clean water programs, helping those affected by natural disaster etc. Environmental CSR- It is very important to limit pollution. Companies participate in CSR by lim...
1 comment
Read more

Tesla's PESTEL Analysis

Political factors Tesla was able to set up its Gigafactory 3 in Shanghai, China. The factory is the first wholly owned foreign auto factory in China. This shift, where China allows a foreign manufacturer to build their facility without partnering with local companies may mean that Tesla can tap the Chinese market without paying high tariffs on US cars (CNBC). However, Tesla might still risk retaliation from Chinese consumers amidst US-China trade war.   Economic factors More people are moving towards electric cars to save on the added expenses. All electric cars purchased during or after 2010 are eligible for a federal income tax credit of up to $7,500 ( US department of Energy ). These governmental incentives for electric automobiles could encourage people to buy more electric cars.   Also, the US government has incentives for plug-in hybrid cars from $2,500- $7,500 based on battery capacity. These plug-in hybrid cars have high-capacity batteries that can be charged to ...
Post a Comment
Read more

Rethinking SWOT Analysis.....

“Traditional SWOT analysis” … SWOT analysis is a powerful tool that is used by companies to build business strategies. It stands for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is usually done in an organized way using a 2*2 grid like pattern. By observing where they are, companies can develop strategies that help them to stand out from the rest. Strengths Strengths are positive attributes of a company. These are internal factors and can be controlled. The following questions help to identify strengths: What do you do better than others? What do customers/competitors see in you as your strengths? What physical assets or human capital do you see as strengths? What is the advantage that you have that competitors don’t? etc Weaknesses Weaknesses are negative attributes and can weaken strengths of the company. These are internal factors and can be modified for betterment. The following questions help to identify weakness: What issues c...
Post a Comment
Read more