Executive Summary
In this essay, the author will explain impact of the mass customization in the world nowadays. Some relevance with economy keys also will be explained to show the importance of mass customization. The author will also provide value chain of mobile phone manufacturing regarding mass customization. Furthermore, the essay will include some perspective and challenges that faced by Mass Customization Company, and also the New Product Development Stage, using Apparel Industry as example.
Introduction
In business nowadays, the trend of manufacturing is shifting from mass production (MP) concept into mass customization (MC) concept. Mass production is an “old” concept practiced and popularized by Henry Ford that produces a
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Figure 1 taken from (http://www.docstoc.com/docs/9186677/JIT-Kanban-Concept-in-TPS)
In Mass Customization Concept, the relationship with customer is one of the important point need to be consider. They should respond to customer demand and implementing it into work (planning, production, shipment) using system named CRM (Customer Relationship Management). Besides that, CAD (Computer Aided Design) also become one of the important techniques that applied by the company in order to transfer the needs of customer into the computer that will visualized them and sent them to manufacturing plant. * Company’s Competitive Advantage
Application of the MC into the manufacturing process of the company wills directly and indirectly creating competitive advantage for the company. Using “lean production” principal that focused on the reducing of the wastages (primarily is inventory cost). For example is Nissan company, by applying the JIT concept from “lean production”, they are successfully reduce their inventory cost (see figures 2) by 26% from 2008-2009 that worth 354.5 billion yen. (http://www.nissan-global.com/EN/IR/INSIDE/INSIDE-SP/FCF/page02.html)
Figure 2 taken from (http://www.nissan-global.com/EN/IR/INSIDE/INSIDE-SP/FCF/page02.html)
Besides that, using the MC as the core manufacture concept will lead them gaining the long term relationship with the customer by providing them with superb and unique value that cannot be provided by another company
Many companies and business entities achieve higher levels of market success through extensive supply chain management. Market success within these industries and companies is possible through implementation of mass customization strategy. Mass Customization represents an approach within the business entity that seeks to be innovative, enhance quality, minimize cycle time, improve agility, and generate consumers who want to only associate with the firm or organization. The main objective of the mass customization strategy rests on the provision of products and services to satisfy unique tastes and preferences at affordable prices that relate effectively with target groups. A visit to Lutron Organization generates clear indication of how mass customization applies in relation to its application in business entities. Lutron organization adopts the strategy of mass customization to meet the needs and expectation of the consumers. Mass Customization is also effective and efficient in developing competitive advantage over other entities within the same industry. The approach of maximizing revenue while expanding the market coverage by Lutron draws from new technologies and knowledge in relation to forces of consumers and company demands. The main aim of the strategy within Lutron is to enable consumers acquire any product or service they want, anytime, in any way, and anywhere while enhancing the profit levels.
The design should be utmost unique and further differentiated, not conforming to culture. Design is could be one competitive advantage so it is important that the manufacturing of the products are conformed to the original ideas of the maker, uninfluenced by any other factors involved in its manufacturing process. Example of this idea is the use of differentiation strategy of companies to gain competitive advantage.
Lean operations emphasizes the understanding of the customer by producing units only as they are needed. As individual units are manufactured this reduces inventory drastically. This also would reduce any waste of products created and not sold. Both of these processes would have been a benefit to my company as there were several units of certain brands that were not desirable or meeting customer needs. This caused a loss of revenue by having units that were produced but not sold. The lean operations and Just In Time methods would eliminate this problem from the manufacturing side of my company.
Despite the fact that there are better manufacturing technologies to be found in today's modern world, it is still quite difficult for every Tom, Dick and Harry in business to manufacture their own products. This is because the cost of setting up a manufacturing plant is significantly high; in addition, one requires a team of professionals with a high level of expertise in various aspects of manufacturing in order to have everything up and running as smoothly as possible.
While mass customization is a viable option in manufacturing with digital factories and employing lean manufacturing designs, service firms have to employ a more productive environment to make mass customization profitable. Mass customization refers to using mass production technologies to quickly and cost-effectively assemble goods that are uniquely designed to fit the demands of individual customers (Daft, 2016, p. 271). The key challenge for service mass customization is to translate information about consumer preferences gained through market research into a format that can be easily used for service modularization decisions and customer-contact personnel training (Haas & Kunz, n.d., p. 603). In the service arena, mass customization becomes an ongoing configuration process with direct involvement of the customer coupled with professional advice by service personnel who understand the configuration rules and know them by heart. A clear understanding of the customer’s needs is required, as well as a requirement by service personnel to provide the customer clear and concise configuration options that strike the perfect balance between flexibility and complexity. Also, a continuous interaction between frontline contact personnel and the customer is a consequence that must be
Mass production is inflexible because it is difficult to alter a design or production process after a production line is implemented. Also, all products produced on one production line will be identical or very similar, and introducing variety to satisfy individual tastes is not easy. However, some variety can be achieved by applying different finishes and decorations at the end of the production line if necessary.
Lean Manufacturing is actually a concept by way of the removal of all waste from any process associated with expense with the goal of a greater return by introducing additional products or processes that would be invested for a greater return on every dollar spent. For instance, how much more groceries can a family purchase if they could get paid for the right purchases made throughout the month, without sacrificing quality and usefulness.
“The Goal” is a novel which entirely discusses the ongoing improvement and the new manufacturing global principles. The book subsequently explains more in the process of continual improvement in company’s manufacturing operations. The book also outlines the different advantages these improved manufacturing operations to all organizations because it is more concerned with the people who try to know what makes the world tick so as to make an improvement in these activities and make it better. The people at this moment achieve the same improvements thinking logically and consistently about problems making it easy to determine cause and effect about actions done and results brought in.
Supply Chain Management: The JIT inventory model may assist in being more efficient in the way we handle supply chains and use our parts to assemble products. We can provide lower costs throughout the manufacturing process; which can be passed on to our customers. With our lower costs, we could produce a more affordable product for our customers and thereby help to stay ahead of our competitors.
Customized products describe manufacturing in the Twenty-first century. This has led to the complex production planning and control systems making mass production of goods interesting. Many organizations, particularly railway and automotive organizations, struggled in the new customer driven and globally competitive markets. These factors present a big challenge to organizations to look for new tools and methods to continue moving up the ladder in the changed market situation [5]. This creates more problems for new companies that are eager to break into the markets.
For mass production to occur a process must be created which aims to fabricate a product in the easiest and the least redundant way. This process is highly designed to create products which are virtually identical in mass quantities (Image 01.1). The final outcome caters to the product rather than to the individual. A process, on the other hand, which allows for a product to be produced based on the needs and wants of the individual requires a link to be created between the person and the system. (Image 01.2) For this relationship to exist, the individual must have a knowledge of the different
Mass Customization has gained momentum over Mass Production in the apparel & footwear industry. This paper talks about why we should look at this business strategy and how this concept has evolved over a period of time. There are many apparel & footwear players adopting this concept but at intermittent stages. The prime drivers of mass customization are technology, supply chain transformation and organizational restructuring. There has been major advancement on technological front starting from taking customer’s measurement through body scanning, to product development and finally to deliver the right kind of customized product to customer. There are
Employees pay structure was revamped which focused on incentive for product innovation and creativity. Alteration from fragmented system to modularized system resulted in proper utilization of injection molding operations and the manufacturing plants were relocated to low costs of locations. Hypothesis driven method was used to change and improve the processes. Customer oriented philosophy was endorsed which was based on feedback from the customer base. Company’s brand ambassadors participated in conventions across the world to discuss about product innovation. The sourcing was more strategic by starting pilot programed focus on the cost rationalization of company’s raw materials. The distribution channels were moved closer to customers and companys marketing worked in conjunction with biggest retailers which aided in joint forecasting and product
Concept forces the company to be more innovative since more people buy their products because of its beauty and symbols of their lifestyle. Expanding to service areas increase its innovation because CDS can learn from design houses collaborated and from customer’s requirements. Design house also expect full service, including fast and tailored distribution service from CDS; thus, it forces CDS to improve its availability. Quality of new products and services can partly be guaranteed due to high quality moulds ordered from
Dealing With Customers. Jones, D., Helling, J., and Shimokana, K. provide their research about the relationship between mass production and its purchasers, lean production and its clients, and the future development trend in the customer relation of lean production in this section. In the beginning, they observe the way Henry Ford, an example of mass production, dealt with his consumers by letting the dealer perform it. His principle was putting the dealer under the mandatory contract to sell particularly cars from Ford’s production and allowing dealers to stock products in order of satisfying walk-in buyers. Some basic parts in Ford’s dealership rules are still considered nowadays. About the European delivery system, it is somehow similar to American’s, but it is almost thirty years late in some aspects because they have two-tier dealer system which was abandoned many years ago in America. To demonstrate the connection between lean producers and customers, the writers begin with a survey in Western countries, and they, subsequently, realize that the professional sellers there obtained training in marketing skills in order to make an efficient bargain. After that, they describe the way that Toyota use to operate their selling system by showing examples on Toyota products such as Corolla, Vista, Camry, Celica, and Supra. In addition, the lean dealership is also illustrated in this section by addressing some facts about car buyers in Japan, America, and Europe. Also, they