If Mass Customization is the Future of Manufacturing, Can Your Company
be Agile Enough to Compete?
Joseph Pine and Brian Maskett say, YES!
The phrase "mass customization" seems to be an oxymoron, a contradiction, a paradox. After all, how can you produce masses of customized products?
Nevertheless, it is the paradox that Joseph Pine, Brian Maskell, and other are asking manufacturers to contemplate. And they make a very strong case for doing so.
Joseph Pine II, author of Mass Customization: The New Frontier In Business Competition, defines mass customization as the production and distribution of customized goods and services on a mass basis.
Brian Maskell, author of Software And The Agile Manufacturer: Computer Systems And World Class Manufacturing, defines agile manufacturing as the ability to use a flexible, diverse production environment to quickly create products that meet or exceed customer expectations for customization, variety, low cost, and high quality.
Pine and Maskell agree, that for practical purposes, the phrases "mass customization" and "agile manufacturing" are virtually interchangeable. To provide a definition of the ultimate in mass customization, Pine quotes a Nissan Corporation manifesto of the Five As: "Any volume, Any time, Anybody, Anywhere, and Anything."
Maskell and Pine say that at the core of mass customization is the ability to increase product variety and customization without corresponding increases in costs. In fact, they say it may be imperative for many manufacturers to achieve such a customization/cost balance if they are to stay viable.
Pine points out that with mass customization, low costs are accomplished primarily through economies of scope rather than scale: "Economies of scope are realized by the application of a single process to produce a greater variety of products and services more cheaply and more quickly." This process needs to be comprehensive and involve everything from adjustments in management styles to manufacturing techniques.
Nor is mass customization just an extension of a sophisticated make-to-order factory. "In fact, today's average make-to-order shop requires lead times that are simply too long." Maskell says. "To be agile, you have to be fast as well as flexible. And to increase speed without driving up costs, you have to change the way you manufacture. Even the best make-to-order manufacturers will be rethinking the ways they do things because agile manufacturing is not a set of techniques but a total change in the way they approach their businesses. Continuous improvement and total-quality efforts are the precursors to mass customization, but those are only a start, and you must apply them in the context of the agile enterprise."
Companies such as Bally Engineered Structures, Black & Decker, Chrysler, Lutron Electronics, Peerless Saw, and Toyota have taken steps to implement various aspects of agile manufacturing. Lutron, for example, can create one-of-a-kind lighting controls and systems in a day. Black & Decker used mass-customization principles to reconfigure 122 basic tools so they could be produced from a small set of standardized components. The company was able to drive down costs and increase variety and, as a result, forced some competitors from the business. Toyota sees mass customization as a means to deliver the customized car of our dreams to you in five days. Chrysler is working on a three-day car: from order to delivery in 72 hours.
Not for Everyone
"The controlling focus of mass customization is to create variety and customization through flexibility and quick responsiveness," Pine comments. "The question is, will you, as a manufacturer, need to make the shift to a manufacturing environment which will require you to be very agile in how you run your business?" Pine provides numerous guidelines for making such a decision. "Manufacturers should consider customizing all along the value chain which includes: development, production, marketing, and delivery." He also recommends using the Market Turbulence Mapping System (see graphic) that measures the amount of uncertainty, instability, and lack of control in your marketplace. "This analytical tool," he says, "helps managers take a fresh view of their firms and industries to determine if mass customization is, indeed, the direction to take."
"There will always be a place for the mass production," Maskell concurs. "When SONY introduced the Walkman and hit a home run, a key competitive competency was to mass produce the product. SONY kept a continuous flow of a variety of Walkman models coming from factories to maintain real clout in the marketplace."
Maskell believes that with the growing trend toward greater quality, flexibility, and lower prices, manufacturers will continue to focus on faster and faster processes and procedures to turn customer requests into product. "To do that, to become more agile," he advises, "you need a flow of information that makes you faster and better and less expensive. That means the software itself much be agile." Maskell has identified several underlying characteristics of software that are essential for agile environments. (See sidebar at the end of this article).
Pine agrees that "an absolute key to success with mass customization is the personal and electronic integration of the value chain through instant communication linkages, common databases, and multifunctional and cross-organizational teams. Without timely data that accurately reflect exactly what is happening, manufacturers will be whipsawed."
Motorola's Bravo Pager factory in Boynton Beach, Fl., seems to have mastered the mass customization process. The plant receives customer orders via a sales representative's laptop computer. Within minutes of the transmission, a bar code is created with all the steps the mass customization system needs to produce the pagers (and to deliver them within a few days). As incredible as it may seem, Motorola can produce up to 29 million different pagers on the same line with one customized pager directly following another.
A Glimpse of the Future
"Iím seeing more and more companies moving toward mass customization," Pine observes. "They are the leading edge of a very big wave. That means there is still tremendous opportunity for manufacturers to determine if mass customization holds strategic advantage for them."
With a lampoon directed at the title of his own book, Maskell concludes, "The phrase agile manufacturing is one of those irritating pieces of jargon. But the phrase is useful in helping us think about the future. And agile manufacturing practices are real and are here to stay. Using them can provide significant competitive advantage."
Maskell's Characteristics of Agile Software
- Integration: Systems must be fully integrated so information is entered only once, and is up-to-date and accurate.
- Simplicity: Programs, screens, and reports must be designed to be simple and easy to use.
- Flexibility: Users must be able to introduce new techniques in one area while retaining an old approach in others.
- Openness: Software must lend itself to easy interfacing with other systems and networking. Typically these interfaces will involve real-time quality control, CAD/CAM, shop-floor data collection, and automated warehousing systems.
- Accessibility: Information must be readily accessible to users of the everything from creating performance measures to ad-hoc analysis reports.