Mass customization is about:
- producing a customized product on demand
- for a specific, named customer
- after receipt of an actual order, and,
- producing it with the same efficiency as one would expect from a mass-produced product.
Most manufacturers of “customized products” produce them under sub-optimal business models called “build to order,” “assemble to order,” “configure to order,” “make to order,” or “engineer to order.”
It is one thing to be a “customizer”—it is quite another to be a “mass customizer.”
A customizer does not benefit from the efficiencies that can be derived from mass customization. Industry experts estimate a customizer’s inefficiencies nominally cost 1.5-3.5% of gross revenues year after year and sometimes much more.
Many customizers experience low single-digit profits that they are constantly challenged to attain as the cost of variety increases which further erodes profits. There is nothing worse than working your tail off to make almost no profit quarter after quarter, year after year.
To realize enterprise-wide efficiencies, I have long advocated that manufacturers offering configurable products move to the “mass customization” business paradigm. I have written about this in my recently published book, Mass Customization: An Enterprise-Wide Business Strategy, widely spoken about this, and, apply this principle with my clients as well.
I have written that mass customization will do for manufacturers the 21st century what mass production achieved in the 20th century.
In 1998, Fortune Magazine declared mass customization the organizing principle for manufacturers in the 21st century. I would caution that mass customization is not for all manufacturing–just some. There will always be a need for mass produced products in our economy. You will find those goods in retailers like Wal-Mart, Target, Macy’s, drug stores, etc.
Mass customization has broad applicability for manufacturers of customized products–products where the customer influences the final product that they desire.
If you are a customizer, isn’t it time you implemented a solution that improves efficiency and profits inherent in an effective mass customization implementation?
Dave Gardner is a management consultant, speaker, author of Mass Customization: An Enterprise-Wide Business Strategy and blogger who resides in Silicon Valley. He helps his clients conquer the challenges that plague manufacturers of configurable products. He can be reached through his website at www.mass-customization-expert.com.