Business strategy, Information technology

Mass customization

Mass customization is mass production while selling products and services that meet the needs of individual customers . Mass means “mass production” and customization means “customization”. Simply put, it means “custom-made mass production”.
In the 1990s, Joe Pine wrote “Mass Customization Revolution: Innovative Management Aimed at Reengineering”, which was still difficult to realize when the concept became widespread, but as a result of recent technological advances, mass customization Is now possible.
Making products that match customer tastes at low cost is a top priority for the manufacturing industry, and although custom-made products that meet customer demands increase customer satisfaction, an increase in manufacturing costs is unavoidable. Hmm. On the other hand, in mass production pursuing low cost, we can only provide products tailored to the masses and cannot meet the needs of each customer. “Mass customization” is an effort to improve the manufacturing process to solve this problem. While adopting a mass production method for the mass (popular), we will carry out customization tailored to the customer and aim to maximize customer satisfaction .
For example, Dell, a major computer sales company, prepares several patterns for each PC part (CPU, hard disk, etc.) and uses a build-to-order (BTO) mechanism based on a direct sales model to customize custom orders according to customer needs. We sell products.
In addition, BMW in Germany provides a service of “MINI Yours Customized” that allows customers to change the design of interior and exterior parts of the passenger car “MINI” from the website. Customized parts are manufactured using 3D printers and laser machines with the improvement of BMW.

 

How to make a mass customization mechanism

Products that have diverse customer needs and can be divided into appropriate units

It is important that customer needs are diverse for products suitable for mass customization, such as the computers, automobiles, shoes and clothing mentioned above. For example, there are various customer requests such as specifications required for computers and size and design for clothing. It can be said that mass customization is suitable for mass customization if the parts and parts that make up a product or service can be classified into appropriate units in order to meet these demands and not to miss the strength of mass production.
 

 

Utilization of IT for production and sales

In mass customization, it is necessary to have a mechanism that enables customization of products and services after understanding the customer’s taste in detail. We also need a production system that lowers costs and shortens the lead time to product sales. For example, like adidas and BMW, it is essential to utilize information technology such as 3D printers and CAD at all automobile factories and production sites. This is because if the design information is digitized and transmitted, the 3D printer can manufacture by appropriately selecting colors, accounting, materials, etc. In addition, there is a large presence of IOT (Internet of Things) that monitors the operating status of machine tools and production lines, and Harley-Davidson, which is famous for motorcycles, leads the delivery to customers by the factory that introduced IOT. The result is that the time is shortened by 2 to 3 weeks.
In order to flexibly change the production process, modularization of each process is a prerequisite. If one process has a large impact on another, it is difficult to customize at low cost, so mass customization can be achieved because the process is easy for robots and 3D printers to handle.
 

 

 

Technology required for mass customization

Design technology

Design technology is the first entry point needed to digitize customer needs and reflect them in product design, and a typical example is the technology called “generative design.”
With generative design, for example, with adidas, customers can design their own products by entering the color, shape, and design of their favorite shoes on the web browser (front end) . The completed design data is sent to the factory and used for production to realize manufacturing in a form that is as close as possible to the needs of customers.
 

 

Manufacturing technology

Manufacturing technology refers to factory technology and equipment (back end) for actual manufacturing based on customer needs data sent from the front end side.
Specifically, a technology called “ digital fabrication ” is mentioned, and materials are cut out, processed, and molded based on data using digital machine tools such as CAD and 3D printers. It is also important to have equipment that can flexibly change the production line according to the order status. Therefore, autonomous vehicles, industrial robots, IOT technology for transmitting and receiving data between machine tools, and wireless communication by 5G are also included in the back-end requirements. Mass customization is expected to become even more sophisticated in the future when smart factories are expected to be realized.
 

 

Digital twin

A digital twin is a virtual model that is reproduced in digital space using real-world data so that reality and virtual become twins . The main feature is that data can be synchronized in real time by utilizing IoT, etc., and not only individual products but also processes such as production processes and operating environments of products can be reproduced.
Since mass customization is a multi-product production, there is a problem that the movement of parts and machine tools in the manufacturing process is complicated and difficult to manage, so by utilizing the digital twin, the actual movement of the factory and the virtual It is possible to detect in real time the part that does not match the result of simulation in space. The digital twin is a technology in the empirical research stage at the moment, but it has excellent compatibility with mass customization, and it is expected that the production control capacity will be dramatically improved.
 

 

Advantages of mass customization

You can get the benefits of mass production and customization at the same time

Mass customization is a business model that can balance the merits of mass production and the merits of customization to some extent. As you can see from the cases of Dell and BMW above, mass customization secures the production volume for each pattern by preparing a number of “patterns” of parts to be combined. As a result, mass purchasing and mass production can reduce product depreciation and production costs . Also, by shortening the assembly time, the lead time to shipment can be shortened, which can be said to be an advantage of mass production.
At the same time, mass customization allows you to change specifications according to customer needs and reduce the risk of inventory generation compared to holding a wide variety of parts. These are the benefits of customization, as customers’ products have added value that is not unique .
 

 

Acquisition of fans

According to a survey by American consulting firm Bain & Company, about 30% of consumers want to buy customized products for themselves.
For young people who post their daily lives on social media, they want a customized experience that they want to share with others. Therefore, many fans will come to the customer-centered company that fulfills each individual’s request.
 

 

 

Disadvantages of mass customization

It is difficult to achieve both mass production and customization

If you put too much effort into customizing mass customization, you will approach pure customization, that is, tailor-made. At first glance, it may seem like a good thing in terms of meeting customer needs, but be aware that excessive pursuit of customization will undermine the economies of scale advantage of “cost reduction through mass production.” .. However, if too much standardization is promoted for efficiency, the added value of the product will not be created by commoditization (= homogenization). Therefore, it is important to promote commonality in order to obtain the benefits of mass, while holding down the key points of the options that users can choose .
In addition, the transition to mass customization will require a review of the company’s existing production and sales systems. Resistance from the existing system is also expected in the review.

 

 

Mass customization company example

adidas

Sporting goods maker adidas is a company that is focusing on selling products by mass customization, and its big weapon is “ Speed ​​Factory , which is a fully automatic factory of adidas in Germany. > ”.
At Speed ​​Factory, we use computer-based knitting machines and robots to automate almost the entire shoe manufacturing process. In addition, the factory uses 3D model technology that can design an appropriate shoe design for each individual based on information such as shoe material and foot shape. These technologies make it possible to manufacture shoes that meet customer needs at low cost. In addition, because the ordered products are manufactured in factories close to the place of consumption, transportation costs and time can be drastically reduced. Adidas has traditionally been produced by low-wage workers in emerging markets, but rising wages in emerging markets have made it impossible to take advantage of costs. Therefore, we have developed a production line centered on robots in Germany, which is the main consumption area and the location of our head office, so that we can flexibly respond to customer requests at low cost.
 

 

Harley-Davidson

Harley-Davidson, which provides large motorcycles, is also one of the companies that carry out mass customization.
Harley’s appeal lies not only in its power but also in its “customizability”, and Harley-Davidson’s strength lies in its ability to build only one motorcycle in the world.
Harley-Davidson provides services that utilize mass customization after understanding the characteristics of such motorcycles. In 2011, Harley-Davidson, which has manufactured and sold many genuine optional parts, launched “ Build your own bike” and provided a service that allows you to purchase custom motorcycles “from the beginning”. Did.
Customers can get their own bike from the start by uniquely combining all the parts such as seats, steering wheel, wheels and muffler. Harley Davidson’s mass customization is supported by a technology called “ smart factory “, which is the connection of lines, sensors, and various equipment in the product factory to the network. So, it is a production concept that visualizes all information in production by centralized management of data. By managing product quality, production status, etc. with a system, we will maximize the benefits of systematization and maximize production efficiency.
“Industry 4.0”, which the German government works on as a national project, has the same concept as a smart factory.
 

 

 

Making the manufacturing industry a service industry

Traditional manufacturing has optimized the production process with the aim of delivering cheap and good products, but with mass customization,
The business model is changing to optimize the “buying experience” for customers rather than the product itself. Looking at the recent situation in the manufacturing industry where even low-wage workers and robots can produce, it is thought that the management resources that can be in charge of manufacturing and assembly have become commoditized. Therefore, we have entered an era in which it is difficult to differentiate the production process itself. If it is difficult to differentiate in the production process itself, it is desirable to differentiate by product planning and customer service, and attempts are being made to increase fixed fans by grasping the needs of each individual through customer-centered marketing and raising brand awareness. Create better added value. Customers also find value in companies that have short lead times to delivery and good after-sales service and maintenance.
As the cases of Adidas and Harley Davidson tell, the manufacturing industry is not just a business model that delivers products, but it is optimal for products that meet customer needs so that customers can “self-realize” with products customized only for themselves. It has changed to a business model that offers prices and lead times. The manufacturing industry is changing beyond “manufacturing” to a “service industry” that fulfills customer needs.
 

 

Summary

“Mass marketing” has been used for a long time in corporate marketing, but in recent years, “ one-to-one marketing ” that tries to meet individual customer needs has been conscious. .. Mass customization seeks to efficiently handle the individualization of these companies. Mass customization is not a factory-closed concept and requires optimization throughout the supply chain, reducing the cost of receiving customer requests and delivering them in a short amount of time during the entire process from order receipt to delivery. It is.
Efforts to advance the manufacturing industry by making full use of information technology such as mass customization are a global trend. In the United States, it is called “ Industrial Internet “, and GE and IBM are playing a central role in aiming to create new business models. It is called “ Industry 4.0 ” in Germany and “ Fourth Industrial Revolution ” in Japan, and it is advanced information such as robots, artificial intelligence, and IOT that realizes them. Technology. Mass customization can be achieved because human control is minimized and robots and other devices autonomously adjust the manufacturing process. We aim to be a factory with customer satisfaction in order to meet the needs of each customer, and since the lead time is significantly shortened, it is also effective in reducing inventory and delivery costs.
The Fourth Industrial Revolution is about to begin, and like leading companies, implementing this concept requires major corporate transformation. In order to completely robotize a production line, there are issues such as securing highly skilled human resources who can handle advanced technology as well as technological development.
Furthermore, mass customization, which increases collaboration between companies, requires standardization and modularization of technology, and appropriate investment and management efforts are required to realize the ideal of achieving both differentiation and cost reduction.
 

 

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