Mass Customization

Mass customization allows firms to produce only things their customers want. This approach, make-to-order, brings many benefits to firms in terms of cost and profit because of lower inventory levels, maximum sales, elimination of material waste, flexible production and, most of all, customer satisfaction. However, mass customization may not be the panacea for all organizations. While some companies are very successful with mass customization, others are not.

The process of delivering wide-market goods and services that are modified to satisfy a specific customer need. Mass customization is a marketing and manufacturing technique that combines the flexibility and personalization of "custom-made" with the low unit costs associated with mass production. Many applications of mass customization include software-based product configurations that allow end-users to add and/or change certain functionalities of a core product. Sometimes called "made to order" or "built to order.

Mass Customization calls for flexibility and quick responsiveness. In an ever-changing environment, people, processes, units, and technology reconfigure to give customers exactly what they want. Managers coordinate independent capable individuals, and an efficient linkage system is crucial. Result: low cost, high quality, customized goods and services. 

Mass customization requires the operating network have to be flexible or dynamic because the original purpose of mass customization is to adapt one-to-one; its goal is to allow customers to design needed products themselves. With that goal, the demands of customers become predictable. To be flexible, operations should be a system of units or modules; each of them is typically a task or process.

Quick responsiveness is a broad concept that is evaluated by some criteria such as capability of offering exactly the features that customers need, delivering on time as promised, supplying the quantity as contracted, etc. Very importantly, mass customization demands that besides satisfying at most customers’ demands, operation cost (thus price) and the quality of products must be improved. It is unacceptable if mass customization results in a big additional cost that is out of acceptable price.

Advantages Of Mass Customization 

Maximized market share by maximizing customers’ satisfaction and number of customers.

Cut cost of inventory and material waste: materials and inputs are pushed into production just in time. Also, very low inventory of finished products because of production to orders, not produce to stock.

Increase cash flow: Lower inventories, prepayment (thus lower receivables)... increase cash flow.

Shorten time of responsiveness (accumulative time from receiving orders to delivering): organization structure and flexible manufacturing in mass customization allows the company to adapt to different demands rapidly.

Ability to supply a full line of products or service with lower costs: the purpose of mass customization is to differentiate products to particular demands, resulting in broader product lines of the company and a much lower risk of obsolete inventory.