When we look back at the last century and ask the question “What was the most significant change that took place in industry?” I think that we would have to conclude that it was mass production. Prior to the ground-breaking steps taken by Henry Ford production was on a craft basis where one man or a small team started from raw materials and produced the finished product, Ford changed all that and introduced the mass production techniques and in doing so began a manufacturing revolution.
Well when our grandchildren look back at this century, I wonder what they will say was the major change that happened to industry. I’m sure that there will be many, such as the impact that China is going to have on not only industry but the world! However, in my opinion one of the things that will be up there of significance will be “mass customisation”. We are already starting to see examples of how consumers are wanting more and more unique and specific products which are produced to their own requirements and specification but without the traditional costs and lead times associated with customised products.
In fact, “purely in the interest of business research” I recently went on the web site for Barbie Dolls!! Once you have entered, you are lead through a series of screens where you choose the skin colour, eye colour, hair colour, clothes and accessories, you give her a name, she gets a birthday which is the date you specify, a “personality” profile, what does she like to do, interests, sports etc. Once complete you enter your Credit Card number and three weeks later your specifically designed Barbie is delivered directly to your house, along with a birth certificate and personality profile and all for the same cost as a Barbie would cost at a major toy retailer. Just think of all the “business rules” that this changes, where are all the retailers, distribution warehouses, finished good inventories, think of the sub assembly and component synchronisation process at the factory and the mixed model scheduling process. Of course, this is not a unique process to Mattel, Dell Computers virtually invented this process and other companies such as Nike Training Shoes and music CD manufacturers have adopted similar applications. However, in my opinion the future will be more and more about companies being able to provide mass customised products. Also its not only about giving the customer what he wants, think of all the customer specific information that Mattel (Barbie brand owner) now have about me. They know basic information such as name, address, but also know specifics about the “birthday of my doll”, I won’t be surprised when I get specific marketing information in the future which specifically relates to the choices that I made in my specification.
The information technology required to support this approach is not new and has been implemented by many companies. CRM, configuration, mixed model master scheduling systems have existed for many years, however what will be needed is the development of very knowledgeable users and the integration of all the technologies. Effectively mass customisation is about the introduction of a new product with every order. As well as integrated systems this will require an extremely effective new product introduction process which is completely integrated with the supply chain planning process and systems. The focus of the NPI process will need to be a step change reduction in time to market, which means a genuinely lean process which has eliminated all of the none value adding elements of the process, process acceleration of the NPI process will be a key facilitation of the mass customisation process. Because each order is effectively a new product the traditional disruption to the supply chain caused by new products will not be acceptable, hence the integration of the NPI process and the supply chain processes will be essential. Because it is significantly easier to introduce new products into a short supply chain than a longer one there will be a need to re-examine the supply chain and once again apply process acceleration to create a truly lean process.
One of the real insights to this issue was when Dell Computers redesigned their supply chain process which in turn enabled them to effectively adopt the mass customisation approach.
The big issue will be the need for integration, however there is a significant danger that companies will need to avoid. Once again this is not a new issue, but many companies have seen information technology and its integration as the silver bullet solution, forgetting about the basics.
Before processes are automated and hence integrated it is essential that they are first in control and secondly, they have been subject to the continuous improvement process so that the processes that are eventually automated and integrated are as “lean” and effective as possible.
Without companies recognising the need to have effective, lean processes based upon excellent data integrity then the technologies essential to support mass customisation will inevitably go the way of so many systems implementations and not deliver the potential opportunities for companies to make a step change to their competitiveness. After all its not new to say, “Garbage in, garbage out!”
It has been demonstrated many times that those companies who are the first to “change the rules” are the companies who will achieve a sustainable competitive advantage. Mass customisation certainly means a change of rules!