Risk Management of Mass Customization in Supply Chain Management

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.

Supply Chain Management: An International Journal, Volume 7, Number 5, 2002, pp. 271 – 282;

Success for many organizations depends on the firm’s ability to balance product and process changes while exceeding customer expectations for improved cost delivery and quality. In lieu of these issues firms have started to implement principles of supply chain management. Supply chain management mainly involves managing the flow of incoming materials, manufacturing operations, and downstream distribution has to be in alignment that is responsive to change in customer demands eliminating a surplus of inventory.

The supply chain management is considered as a management concept from past two decades as the customers are concerned about timely and safe delivery. The competitiveness has been increasing among the companies to deliver the products as quickly as possible to the customers all around the world. This has made the supply chain management as a vital tool for the management. This is also measured as a competitive parameter for the companies.

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)

Supply chain management is a practice that involves the planning, supervision, and implementation of strategies and controls to direct the movement of goods and services provided to customers. The intent of this essay is to incorporate a synopsis of existing literature and to provide the reader with a general understanding of how supply chain management correlates with the organizational design and structure of modern firms. The essay comprehensively reviews the components of supply chain management and their integration with functional areas within an organization. The information presented in this essay

The lean supply chain helps to imrprove efforts focusing waste, improve manufacturing schedule and economically produce small quantities. It is also flexible to react to changes in the market. Hence, BMW has this facility of allowing a customer to change its order within a week of placing and still maintain the original delivery time and high quality. Similarly, agile supply chain helps in carrying a generic inventory. The best part is that it helps in reducing risk of keeping too much stock as well as being out of stock. Mass-customization can be easily pursued through an agile supply chain which offers variety at a lower total

All activities, functions, and facilities involved in producing and delivering a product or service from suppliers to customers (Russell & Taylor, 2014). The term Supply Chain Management varies across the academicians. Supply chain management is the integration of trading partners’ key business processes from initial raw material extraction to the final or end customer, including all intermediate processing, transportation and storage activities and final sale to the end product customer. (Wisner, Tan, & Leon, Supply Chain Management. A Balanced Approach, 2012)

* A company’s competitive position and profitability can be improved through the use of Supply Chain Management System (SCMS) which if successfully implemented will lead to exemplary customer service. (Oz, 2009)

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

From a production management perspective Hobday (1998) discusses that product characteristics – especially those of complex product and systems (CoPS) – play a major role in shaping organisational structures and industrial coordination. Novak & Eppinger (2001) further argue that product complexity and vertical integration are also directly related. Vertical integration is the degree to which a firm decides to own its upstream or downstream supply chain (Novak and Eppinger, 2001). Novak & Eppinger (2001) argue that coordination of product engineers, designers and purchasing agents will result in improved performance, as they each play a role in “make or buy” decisions that determine the level of vertical integration (Novak and Eppinger, 2001: 202). Salvador et al. (2002) claim that despite the interdependence of product, process and supply chain design there is

The purpose of this report is to evaluate how M&S survives in the changeable market. Moreover, its concludes how macro- and micro-environment affect M&S to make its marketing plans and investigates the strengths, weaknesses, opportunities and threats of M&S. By analysing current business situation, M&S

1) Increasing Number of Products and Services: With the increasing consumerism and competition among the organizations to attract more and more customers, customer has become more demanding and uncompromising. Companies are customizing products more and more to retain old customers and attract new customers, to fulfill increasing customer demand and gain competitive advantage over rival firms. This has led to the introduction of large number of new products with multiple SKUs which have very short life cycle. All these factors have led to increased complexity in supply chain which needs to be

The integrated management of the supply chain is a topic that is becoming more important in the business world, given its importance, conjurations and development of enterprise networks. Which is why, today is the underlying logic of the structure of dynamic alignment ca, companies need to be integrated with your customers or markets in the context of a prevailing operating environment. The power of this structure rests on its ability to reveal the interaction between customer needs, helping to formulate appropriate response strategies, and then the successful implementation of these strategies by the relevant leadership, through the formation of cultural capacities internal, by raising awareness of the fundamental needs of customers and their buying behavior already dominant is necessary, as well as reducing delivery times [1].

Thus, the content of service is standardized but the standard elements can be combined in many ways when delivered”. Modulisation therefore combines the advantages of customization, by offering personalized services that increase the customer satisfaction, together with the advantages of standardization that focus upon increasing the productivity. In this way, the company has control over the costs and the customer is satisfied because he feels he receives an individual service (Sundbo, 2002). In addition, through modulisation, a service provider profits from large-scale manufacturing, while the production is “specialized and modulised, and yet is simultaneously flexible” (Sundbo,