Part 1: Competing in the Age of Mass Customization
Frank Piller, Fabrizio Salvador & Dominik
The concept of "the customer is always right" is taking on a whole new meaning as the the ability to manage personalized products is starting to determine whether your company can keep up with the competition. In part one of this series, Frank Piller, a leading expert on mass customization, personalization and open innovation, discusses the goals, scope and core capabilities of mass customization. “It is the customer who determines what a business is” (Drucker, 1954). In the very sense of Drucker’s statement, the ability to manage the value chain from the customers’ point of view determines the competitiveness of many companies. An important part of this ability today are strategies to cope with the increasing heterogeneity of demand of customers.
In particular, consumers with great purchasing power are increasingly attempting to express their personality through individual products. Explanations may be found in the growing number of single households, a changing demographic structure, an orientation towards design, and a new awareness of quality and functionality that demands durable and reliable products corresponding exactly to the specific needs of the purchaser. Thus, manufacturers are forced to create product portfolios with an increasing wealth of variants, right down to the production of units of one. Companies have to process their customers’ demand individually.
What is mass customization?
Since the early 1990s, mass customization has emerged as one leading idea for achieving precisely this objective. In accordance with Joseph Pine, an IBM-executive turned consultant and author who is the father of the mass customization concept, we define mass customization as “developing, producing, marketing, and delivering affordable...
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