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Mass Customization (AKA Customer-Made & Build-to-Order)

Mass Customization (AKA Customer-Made & Build-to-Order). Marcus Holm. What Will Be Covered. Mass Customization Defined Nuts and Bolts How it Works A Real World Example Summary. Mass Customization Defined. History Joseph Pine II described this paradigm at the beginning of the 90’s

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Mass Customization (AKA Customer-Made & Build-to-Order)

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  1. Mass Customization(AKA Customer-Made & Build-to-Order) Marcus Holm

  2. What Will Be Covered • Mass Customization Defined • Nuts and Bolts • How it Works • A Real World Example • Summary

  3. Mass Customization Defined • History • Joseph Pine II described this paradigm at the beginning of the 90’s • 8-figure-path • Early on bankruptcies (e.g. Cannondale) • Internet made it possible

  4. Mass Customization Defined-Contd • Definition • 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

  5. Mass Customization Defined-Contd • Types of Customization • Collaborative Customization • Adaptive Customization • Transparent Customization • Cosmetic Customization

  6. Reasons For Mass Customization • Individualism • Competitive Advantage • Profitability • Technological Progress

  7. Benefits of Mass Customization • Higher Profits • Lower Costs • Market Exploitation

  8. Brainstorming • Make a list of parts you can standardize • Make a list of parts to make available for customization • Assess the costs involved with each—is it practical to customize certain parts?

  9. Brainstorming-contd. • Determine effective ways for customers to customize • Hasten customization/manufacturing process

  10. Nuts and Bolts • Goal: to provide customers with the ability to customize a desired product without paying a premium

  11. How it Works • Mass Customization requirements • Promotion • Design • Sales • Production • Servicing • Processes • Feedback • Organization • IT

  12. How it Works-Contd. • Process • It draws on the long tradition of modular design • Level of Mass Customization

  13. How it Works-Contd. • The Mass Customization Process is: • Customer co-design • Define • Configure • Match • Modify

  14. How it Works-Contd. • The Mass Customization Process is: • Meeting the needs of each individual • Fit • Style • Functionality

  15. How it Works-Contd. • The Mass Customization Process is: • Stable Solution Space • Value Creation • Reinventing products/processes • Responsive • Flexible

  16. How it Works-Contd. • The Mass Customization Process is: • Adequate price and cost level • Affordable • Reflect added incremental utility • Same market segment as standard goods

  17. A Real World Example • Dell • Gateway • USAA Insurance • Chubb & Sons • Acumin Corp. • Sony

  18. EuroShoe • Company Aims • Product • Process • Enterprise Organization

  19. EuroShoe: From Customer to Customer • Social Impact • New jobs • Higher individual satisfaction • Proactive vs. passive consumer role • More efficient use of materials • Better working conditions

  20. EuroShoe: From Customer to Customer • Economic Impact • Improve global competition • Introduce shoe customization on grand scale • Increase in product quality • Decrease in product costs/materials • New market segment • Increased customer satisfaction

  21. EuroShoe • Conclusion • Improved level of personalization • Additional employee training • Information dissemination • Mobile research

  22. Exercise • Form a circle of 4-8 individuals • Each individual pick a dream car • List wanted options • Paint color • Interior features/seat material • Engine power

  23. Exercise-Contd. • Compare your specs with others • Identify similarities vs. differences • Determine what to mass produce • Determine what to customize/allow personalization • Conduct cost/benefit analysis of various options to determine optimal efficiency

  24. Summary • Focusing on Mass Customization • Definition • History • Process • Real world example • Customization exercise

  25. Readings List • Mass Customization, John Sanders, http://www.managingchange.com/masscust/whyissue.htm, 1998 • Mass Customization, Encyclopedia, http://en.wikipedia.org/wiki/Mass_customization, 2005. • Understanding Customer Satisfaction in Product Customization, Xuehong Du, 2006. • EuroShoe Press Conference, Claudia Roberta, Nov. 11, 2002, Milan, Italy.

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