Identifying potential contributions of lean production to business model evolution towards mass customization in

1. Identifying potential contributions of lean production to business model evolution towards mass customizationin the wood furniture industry Matheus Pinotti Moreira – Ph.D. Candidate Sophie D’Amours – Research Director Robert Beauregard – Research Co-director Riadh Azouzi – Research Co-director

2. The Furniture Industry In Quebec • Important manufacturing sector; • Current situation is very difficult; • Furniture manufacturers believe that mass customization is a promising alternative to regain competitiveness. MCPC 2007 Boston, USA, October 07-09, 2007

3. The challenge of mass customization for the wood furniture sector in Quebec (Lihra et al., 2005; Poulin et al., 2006) Popularizing Varietizing Accessorizing Configuring Tailoring Servicing Adjusting Monitoring Component manuf. Retailing Engineering Supply Assembling Packaging Distribution Finishing Design Sale-2O Ship-2O Pack-2O Finish-2O Assembly-2O Make-2O Supply-2O Engineer-2O Design-2O MCPC 2007 Boston, USA, October 07-09, 2007

4. 1950 1970 1960 1980 2000 1940 1990 Popularizing Varietizing + Accessorizing + Configuring OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com Jan. 2005 J.D. Power Customer Satisfaction Alemagne 2005 Why Toyota as a reference? • Similar radical complex change MCPC 2007 Boston, USA, October 07-09, 2007

5. Research questions • What are the common competencies of lean production and mass customization? • What are the specific competencies needed for mass customization in the wood furniture industry? • What are the opportunities and barriers for the development of these competencies using lean production as a reference? MCPC 2007 Boston, USA, October 07-09, 2007

6. Competencies for mass customization Moser (2005) Anderson (2004) Muda & Hendry (2002) Da Silveira et al. (2001) Alford et al. (2000) Feitzinger & Lee (1997) Kotha (1996) MCPC 2007 Boston, USA, October 07-09, 2007

7. Lean production & Mass customization Correspondent on lean production Liker (2004) Shimizu (1999) Fujimoto (1999) Shimokawa (1987) ... MCPC 2007 Boston, USA, October 07-09, 2007

8. Delphi Technique 1st round 2nd round Answers and comments Final report Participants Analysis & synthesis Selection of participants Analysis & synthesis 1) What is the competitive advantage of the competencies? 2) What is their development level in the industry? Researchers MCPC 2007 Boston, USA, October 07-09, 2007

9. Perceived competitive advatange Median for each question: > 3  yes < 3  no = 3  verifyμ Adapted from: Barney (1992) MCPC 2007 Boston, USA, October 07-09, 2007

10. Perceived competitive advatange Ratio Σσ/Σμ If < 0.3, acceptable consensus MCPC 2007 Boston, USA, October 07-09, 2007

11. Perceived Perceived 2. Integration of client 2. Integration of client competitive competitive information information advantage advantage 7. Sales & Marketing 7. Sales & Marketing integration with other functions integration with other functions 11. Coordination with 11. Coordination with retailing network retailing network Durable Durable 9. Efficient development 9. Efficient development advantage advantage of new products of new products Furniture enterprise Furniture enterprise 12. Flexible logistics and 12. Flexible logistics and handling of final products handling of final products of the future project of the future project Commercialization Commercialization 1. Employment of 1. Employment of 13. Utilization of a 13. Utilization of a Temporary Temporary product modularity product modularity & Marketing & Marketing structured problem structured problem advantage advantage New production & New production & solving methodology solving methodology 4. Information and 4. Information and management management communication mgmt communication mgmt . . technologies technologies 14. Continuous 14. Continuous learning & retention learning & retention Human capital Human capital 10. Efficient fabrication & 10. Efficient fabrication & of employees of employees assembly assembly Business models Business models 3. Product configuration 3. Product configuration system system Competitive Competitive 5. Management of 5. Management of 6. Flexible production 6. Flexible production parity parity product variety costs product variety costs scheduling scheduling 8. Efficient supply 8. Efficient supply chain management chain management Current level of Current level of development development Elevated Elevated Average Average Weak Weak development development development development development development MCPC 2007 Boston, USA, October 07-09, 2007

12. New competencies suggested • Cooperative network • Development of new markets and offers • Change management • Reverse logistics • Polyvalent employees • Management of individual competence profiles MCPC 2007 Boston, USA, October 07-09, 2007

13. Lean production can contribute much more to mass customization: From order to delivery  From concept to commercialization Knowledge front-loading, heavy-weight product manager, revenue cost management, set-based CE,... Complementary references needed: Delivery services Product configuration systems Limits: Researchers’ point of view vs. Industry point of view Is a structured problem-solving methodology important for mass customization ? Conclusion and further questions MCPC 2007 Boston, USA, October 07-09, 2007

14. THANKS FOR YOUR ATTENTION!QUESTIONS? MCPC 2007 Boston, USA, October 07-09, 2007