Mass Customization
Used in marketing, manufacturing and management, mass customization represents the use of
flexible computer-aided manufacturing systems to produce custom output, combining low unit
costs of mass production processes and flexibility of individual customization.
Different interpretations have been given to this concept. Among them, Kaplan and Heinlein
define it as "a strategy that creates value by some form of company-customer interaction at the
fabrication / assembly stage of the operations level to create customized products with
production cost and monetary price similar to those of mass-produced products". (Source:
Kaplan, A.M., Heinlein, M.(2006): Toward a parsimonious definition of traditional and
electronic mass customization, Journal of Product Innovation Management, 23(2), 168-182.)
Although the term was initially coined by Stan Davis, Joseph Pine II also discusses about it in his
book Mass Customization: The New Frontier in Business Competition (ISBN 0-87584-946-6),
presenting an image of this paradigm at the beginning of the 90s.He even suggested a business
model, „the 8-figure-path”, which describing the process from invention to mass production to
continuous improvement to mass customization and back to invention.
An article on Harvard Business Review in 1997, written by Pine and Jim Gilmore, talks about
four types of mass customization:
Collaborative customization –after discussing with individual customers, firms try to
determine the exact product that best serves the customer's needs (see personalized
marketing and personal marketing orientation) and then specifies and manufactures a
product that suits that specific customer (for example, some clothing companies will
manufacture blue jeans to fit an individual customer).
Adaptive customization - a standardized product is being produced, but it has the quality
of being customizable in the hands of the end-user (the customers alter the product
themselves).
Transparent customization - unique products are provided for individual customers,
without making them aware that the products are customized. In this case there is a need
to accurately assess customer needs.
Cosmetic customization - a standardized physical product is being marketed to different
customers in unique ways.
Implementation
Software-based product configurations, offering the possibility to add and/or change
functionalities of a core product or to build fully custom enclosures from scratch, are just some
examples of implementations of mass customization that are operational today. Only limited
adoption must be taken into consideration in such cases, being known the fact that individual
products (atomic market fragmentation) aren’t necessarily products produced individually, but
rather similar variants of the same mass produced item.
True "mass customizers" in the original sense are not the companies which supply purely
electronic products (even if these are more successful with mass-customization business model),
since they do not offer an alternative to mass production of material goods. Among the
companies producing tangible goods and services immediately directed by customer demand
must be included:
Dell's famous "build-to-order" model, which facilitated its rise to dominance in the PC
direct-purchase industry.
The Architectural Skylight Company, a Maine firm using CAD to automate the
production of windows to architects' specifications.
Companies throughout the tourism industry, offering package holiday alternatives
through mass customization.
Most mass customization applications which are still in business-to-business industries.
Notable failures
Due to the fact that lengthy supply-chains, as well as the economics of configurability do not
allow many of the industries to economically offer mass customization, some well known early
businesses which attempted mass customization went out of business. For example, in the
industry of bicycle production, in 1999 Cannondale was considered the new model fit for mass
customization, as stated in a 1999 report : "Cannondale [...] for example can configure over 8
million different frame and color variations in its bicycles." Still, the mass customization action
could not help preventing the company's subsequent bankruptcy in 2003 (also blamed on other
causes such as a failed attempt to enter the motorsports market), and the model was no longer
taken into consideration by business gurus, sometimes the company’s business model being used
even as an example whilst it was out of business.
Configuration system
In the process of combining the low unit cost of mass production with the flexibility of
individual customization, customers must also be efficiently integrated into value creation
activities. In relation to this process and to the concept of „mass customization” there is another
term, „configuration system”, seen as the interactive interface between customer and
manufacturer, enabling customers to add and/or change functionalities of a core product or
making fully custom enclosures from scratch. The success of mass customization depends much
on this configuration system, whose development is strongly connected with the customer’s
actions and the sales: a poorly developed configuration system means decreased customer
satisfaction and loyalty, leading to low sales.
