Production and enabling technology

Pan and Holland (2006) state that most research on mass customization has focused on consumer marketing perspectives and technological achievements. There has been less feasible applications developed for the total process of an industry supply chain, and in addition there has remained a great division between design and production. In fact, this interface between design and production is crucial in implementing mass customization strategies. (Pan & Holland 2006) Production of mass-customized products requires special adjustments. Traditional line production is widely used in mass production of jeans and other clothing, but it lacks many requirements for manufacturing of customized products, especially it lacks flexibility. New challenges arise when the customer can take part in design and configuration, instead of only being the final user, and the product is produced after the purchase (Piller et al. 2004). These are the most significant changes compared to a traditional supply chain. Producer’s resistance to change from existing manufacturing methods may present potential obstacles (Pan &

Holland 2006).

In the last decades, there have been tremendous enhancements in shortening the lead times of a traditional supply chain, with development of more flexible operations such as vertical integrations of different parts of the supply chain, computer-aided design and electronic-data interchange and locating production close to customers. It is possible to get new products into stores even within two weeks instead of months. In some cases of traditional mass production of apparel, it can take even over one year from planning to finally get the finished products into the stores. In mass customization, lead times have to be very fast, and integration of customer as part of the chain increases the importance of production technologies, data transfer, and operation management in supply chain.

These systems are the basis for creating and planning production for mass customized made-to-order products. More time is required for product design and development, and managing of the production and the supply chain. In traditional production, product variations and varied features have become crucial in meeting fast changing demand of customers, and tailoring is too expensive to sustain. Processes need to change from specialized mass production to more flexible and responsive with shorter production times. (Pan & Holland 2006, Oleson 1998)

Mass customization has become an important manufacturing strategy against current levels of market globalization, rapid technological developments and intense competition (Da Silveira et al. 2001).The role of manufacturing strategy is an important precursor for achieving agility needed in mass customization, and the ability to become agile as well as to manufacture mass customized products can only be achieved by

combining skills, technologies, know-how, processes and alliances with other players.

In order to enhance and utilize these capabilities, manufacturing strategies need to be developed. A comprehensive manufacturing strategy includes a range of internal factors such as manufacturing data management, schedule management and forecasting, quality, capacity planning, product development, process technology, inventory management, and innovation, as well as strategic external linkages within networks.

Efficient production management is important in controlling overall profitability of an industrial unit, and implementing and realizing the strategy on operative level. (Brown

& Bessant 2003; Chiplunkar et al. 2001)

Production planning includes a decision about the production method, which also affects the lead times and efficiency. Customized products can be produced in batches of unique products or in a “batch-size-of-one”. Both ways have advantages and disadvantages. Batch production is more similar to mass production, where economies of scale are pursued. Anderson (2004) argues that manufacturing in batches drastically raises costs and lead-times because of its effect on space, throughput times, work in progress inventory, recurrent defects, flexibility, and disruptions caused by more important rush jobs, which are interrupting scheduled production (Anderson 2004).

Gathering of the batches automatically increases the lead-times, since the orders have to wait that a requisite amount of certain kind of orders are ordered. Also if the orders are sent to manufacturing in batches depending on time, for example weekly, the customers who have ordered in the beginning of the week have to wait a week longer than the customers who have ordered in the end of the week. On the other hand, one-piece production lacks the possibility to divide manufacturing tasks with high volumes so that one worker is concentrating to produce certain part of the product, while others are concentrating to another parts. However, this depends on the similarity of the products.

If the customized products are repeating pre-designed details, batch production is much more efficient. From the customer’s point of view, the shortest possible delivery time is required, especially in the apparel markets with lots of competition and substitutive products.

Tu et al. (2001) study the relations between time-based manufacturing practices (TBMP), value to customer and mass customization. Time-based manufacturing is defined as externally focused production system that emphasizes quick response to changing customer need, and its primary aims are to improve responsiveness and enhance competitive advantage by focusing on time compression techniques listed in figure 7 (next page). Value to customer is an external measure, which describes the customer’s degree of satisfactions with the company’s products. This is affected by customer’s perceptions of the value of product variety, customer satisfaction with product quality and features, and customer loyalty. Time-based manufacturing enhances value to customer directly, because customers value high quality, short response time,

and low cost even when customization is not offered, and on the other hand is a requisite when customization is offered.

Figure 7. Impact of time-based manufacturing on mass customization and value to customer (adapted from Tu et al. 2001, partly according to Koufteros et al. 1998; Dean and Evans, 1994; Juran1989; Ohno 1988).

Tu et al. (2001) introduced three hypotheses, which are also shown in figure 7:

H1 Firms with high levels of time-based manufacturing practices will have high

Shop floor employee involvement in problem solving -Finding out customers’ needs

-Essential in building rapid response

-Matching the best options from selection of variables for customers

Reengineering Setups

-Compressed setup time permits to quickly switch between products, which increases flexibility

-Enhances responsiveness to changing customer needs -Can eliminate waste, which benefits customer directly through cost reductions

-Unreliable machines and processes lead to expanded throughput time and missed production deadline

-Prevent reduced product quality -Reduces production costs

-Scheduling preventive maintenance and allowing operators to complete it should increase equipment reliability and system availability

Quality Improvements Efforts -”Do things right at the first time”

-Reduce throughput time

H2 Firms with high levels of time-based manufacturing practices will have high levels of value to customers.

H3 Firms with high levels of mass customization capabilities will have high value to customers.

The findings of the research were that TBMP has a significant impact on mass customization as it enables organizations to eliminate waste, increase speed, and enhance flexibility. These competencies are part of the requirements needed to achieve customization responsiveness, cost effectiveness, and volume effectiveness. In addition, TBMP has a great impact on value to customer as the seven dimensions of the TBMP reduce cost, improve product quality, and shorten the time from an order to delivery.

The positive impact of mass customization in adding value for customers was also verified. Customers value products that meet their needs better than standard products, and firms with mass customization capabilities should have possibilities to capture high sales volumes, loyal customer base as well as generate greater profits than competitors without them. However, these firms should have high offering of variety, rapid delivery, high operations for their fixed assets, and competitive prices. (Tu et al. 2001)