Differentiation of Products And The Mass Customisation.

Differentiation of Products

And The Mass Customisation

Traditional business model

Built-to-forecast

Built-to-replenish

Monopolize

Business always try not to customise if they have a choice

"In the clothing industry, about half of all products are sold at a huge discount or shredded because they were manufactured in a size or color that nobody wanted,"

David Anderson, management consultant for Cost & Customization Consulting

Motivation

Customer relationship building, to win over the one-size-fit-all, low price products

Experience Economy, to make buying an creative, enjoyable experience

Optimisation of marginal utility

Customisation

Customisation VS small-batch production

eg. Swatch, Benetton, Book-on-demandMass-customisation features

Built-to-order (BTO) Customers have to wait One-of-a-kind

Customisation VS personalisation

Is engraving names on ball-pen mass-customisation?

Mass-customizing an objects usually affect its function

Customisation VS modularisation

Is IKEA cabinets and LEGO mass-customisation?

Post-production customisationDesign as variantsOne-of-a-kindEnhanced buying experience

Customisation VS Custom-made

Is cupboard from street-corner shop mass-customisation?

Predefined design variant(On-line) variant building interfaceOperator intervention free manufacturing, orReduce operator intervention by process

standardisationNear mass-production speed

In the electronics industry alone, sales of custom-manufactured goods will grow from $60 billion in 1998 to $150 billion in 2003, according to Technology Forecasters Inc.

For manufacturers in most industries, AMR's Burkett said, customization isn't "a question of if, but when."

Mass Customisation

Mass-customisation

VariationalProduct Structure

CustomisationInterface

FlexibleManufacturing

AdvancedLogistics

User input(Optional)

Major application

It reduces material stock and dead-stock Personal computers (Dell)

It makes a more manageable product-line Heavy machineries Automobile (Ford)

New buying experience Apparel Toys

Mega Tech approach

Agile production Flexible

Manufacturing Cell (FMS)

High-speed machining

Robots

Process improvement approach

Product Data Management (PDM)

Enterprise Resources Planning (ERP)

eg. DELL

My Twinn

Customers send in pictures of the child

Choose from 7 skin tones ranging

from porcelain to black brown

15 hair and eyebrow colors

4 eyelash colors 26 eye colors

IMX Mixing Station

Customer configure the colour and scent of lip gloss using a console interface

Machine whip up a batch of custom gloss on the fly

www.designinteract.com/features/

NIKE id

Web customers select the color and size of the footwear they want to buy

Place a message of up to eight characters on the back

The Web-based configuration system transmits the design to manufacturing systems at Nike factories in Asia, where the shoes are made

The shoes are sent directly to the consumer in two to three weeks.

Small batch approach

Layered ManufacturingRapid Tooling

Chaos stir-up by mass customisation

I want this radius increase by 5mm, make all necessary change to make it look as good as before

The motor is changed from Brand A to Brand B, change all necessary parts so that the product still work, and remind sales department that the product is now cheaper by $0.5

Tell me how much more time is need if the customer increase the order from 100,000 to 1,000,000 and what price should I charge, NOW

Comment by NIKE id

The service works through an amalgamation of homegrown and off- the-shelf software that includes online customer relationship management tools, a Web-based configurator and software that translates the dynamic HTML data into a format that can be processed by the legacy manufacturing systems operated by Nike's manufacturing partners in Korea and Taiwan.

"The configuration tools and other systems out there are pretty robust, but they don't typically operate at this level of detail," said Allen, who declined to reveal the software vendors involved in the project. "There was a lot of integration work."

Product data chain

Drawbacks to aware

Users not always know how to articulate what they want (NikeID has to check for bad IDs)

Too many options will: Make the configuration process time consuming Complicate the consumer interface Make error checking on spec. changes difficult

Very demanding on logisticsMaintenance headache