SWATHI. A (2T2-38)
CH. UDAYA LAKSHMI (2T2-15)
* 1970’s – Slowing Economy – Rising Oil Prices
* Need for alternative approach
* 1970’s-1980’s – Increasing competition within U.S. market from outside countries, esp. Japan * Late 80’s-early 90’s: Literature proposing MC
* Development of internet (esp. product configuration systems) in mid-1990’s opens door to widespread use of Mass Customization * Mass Production – example: Ford
* Division of work
* Low variety of output – ‘any colour as long as it’s black’ * Constantly rising volume sales, and lower input costs = lower prices (economies of scale) * OK in permanently expanding economy with favourable demographics
* Mass Customization Defined
* Nuts and Bolts
* How it Works
* A Real World Example
* Mass production, or the ability to produce large amounts of uniform products, first became popular around the turn of the 20th century. Henry Ford used the concept to produce high quality and inexpensive vehicles starting as far back as 1910. One of the flaws of mass production, however, was that the final product was always the same, and any deviation or customization was minimal. It wasn’t until midway through the 1980’s that the term ‘mass customization’ was first used and became in vogue.
* Stanly Davis is credited with first using the term in 1987. The basic idea of mass customization is the ability for custom products to be produced on a scale, as well as price, similar to mass production. Although this concept seems almost obvious and inevitable in today’s world, true mass customization would never have been possible without the internet, computerization, as well as other technologies that would have been inconceivable almost fifty years ago.
* Mass Customization is the use of flexible computer-aided manufacturing systems to produce custom output * Meeting individual customer's needs with near mass production efficiency * Creating customized products with production cost similar to those of mass-produced products IMPLEMENTATION:
* Many implementations of mass customization are operational today, such as software-based product configurations 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 centers 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.
* Types of Customization:
* Collaborative Customization
* Adaptive Customization
* Transparent Customization
* Cosmetic Customization
* Collaborative customization - firms talk to individual customers to determine the precise product offering that best serves the customer's needs. * 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...
References: * www.MadeForOne.com (naturally!)
* Living in Dell Time (www.fastcompany.com/magazine/88/dell.html)
* Pine, B. Joseph, Mass Customization: The New Frontier in Business Competition, Harvard Business School Press, ISBN 0-87584-946-6 (paperback)
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