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Mass Customization is the cost effective manufacturing and delivery of goods and services to people according to their individual tastes, needs and desires.
World’s first 3Dprinted shaver, by Twikit and Philips
Mass Customization as an idea
Futurist Alvin Toffler first alluded to mass customization in his books Future Shock and the Third Wave. In the Third Wave, he spoke of a third wave of civilization to follow the agrarian and industrial revolution. Toffler invented the concept of the prosumer where the client is involved with the manufacturing and design process of a product. He also predicted the rise to prominence of knowledge work, a reduction in standardization, the devolution of the nation state, a loss of consensus amongst citizens and a decentralization of democracy. In his book Future Shock he foresaw the prevalence of disposable products, an acceleration of obsolescence in products, greater volatility in industries, need for people to learn and unlearn new skills as knowledge more quickly becomes outdated and a more nomadic existence of peoples worldwide. Future Shock was published in 1970 and the Third Wave in 1980. Toffler really created in his mind a model that by and large holds true of the future. It is within this model that the idea of the prosumer held sway and has continued to influence us many decades later. Another notable thinker Marshall McLuhan noted 1964, in reference to industry and media that,
“Automation affects not just production, but every phase of consumption and marketing; for the consumer becomes producer in the automation circuit, quite as much as the reader of the mosaic telegraph press makes his own news, or just is his own news.”
Once again a very prescient comment from a previous decade. McLuhan and Toffler laid the conceptual groundwork for a much more information driven variable universe.
Defining Mass Customization
In 1987 Stan Davis coined the term Mass Customization in his book Future Perfect.
Joseph Pine then framed and defined the term mass customization in his 1992 book Mass Customization: The New Frontier of Business Competition. Pine defined mass customization as, “a synthesis of two long-competing systems of management: the mass production of individually customized goods and services.” In another definition he describes it as, “developing, producing, marketing and delivering affordable goods and services with enough variety and customization that nearly everyone finds exactly what they want.” Later on in an interview Pine said that, “Today I define Mass Customization more exactly as the low-cost, high-volume, efficient production of individually customized offerings (which, incidentally, may be goods, services, experiences, or transformations). Or even more simply, to use the phrase coined by my friend Steve Goldstein of Growth Advisors, it is efficiently serving customers uniquely.”
Challenges and Issues with Implementing Mass Customization
The Harvard Business Review Article he coauthored in 1993, “Making Mass Customization Work” outlined the challenges in adopting mass customization in industry. He states that, “While executives are correct in thinking that continuous improvement is a prerequisite for mass customization, one thing is becoming clear from the experiences of companies such as Toyota, Amdahl, and Dow Jones. Continuous improvement and mass customization require very different organizational structures, values, management roles and systems, learning methods, and ways of relating to customers.” “What all this boils down to is that mass customization is a totally different world from continuous improvement. It is a world in which the unpredictable nature of each customer’s demands is considered an opportunity. To exploit that opportunity, the organization must perpetually generate new product teams. The key to success is designing a linkage system that can bring together whatever modules are necessary—instantly, costlessly, seamlessly, and frictionlessly.”
Instantaneous requires the wants of the customer to rapidly turned into a list of required components and then a process that fulfill the order. In costless he emphasizes that once the initial investment has been made, a custom order should be costless for the company. A company needs to be integrated well enough to make and present this custom product to the customer, and this is the importance of seamless. Frictionlessly, teams will have to be assembled and be in communication with each other to fulfill and implement customization.
Types of Mass Customization Defined
“Mass customization has been adopted by many companies to avoid the unnecessary costs of catering to each and every customer want. Four basic approaches are used singly or in combination and they are: collaborative, which involves a dialogue between the firm and its customers; adaptive, which involves the creation of one standard that can be altered by the customer; cosmetic, where the presentation of one standard varies according to the type of customer; and transparent, where a different product is made for each customer.”
In Collaborative Customization, “Collaborative customizers conduct a dialogue with individual customers to help them articulate their needs, to identify the precise offering that fulfills those needs, and to make customized products for them.”
“Adaptive customizers offer one standard, but customizable, product that is designed so that users can alter it themselves.”
“With Cosmetic Customization, “Rather than being customized or customizable, the standard offering is packaged specially for each customer. For example, the product is displayed differently, its attributes and benefits are advertised in different ways, the customer’s name is placed on each item, or promotional programs are designed and communicated differently.”
“Transparent customizers observe customers’ behavior without direct interaction and then inconspicuously customize their offerings within a standard package.”
Mass Customization Nuanced
Fabrizio Salvador, Pablo Martin de Holan and Frank Piller in their Cracking the Code of Customization article give a more nuanced view of Mass Customization.
“The key is to view it basically as a process for aligning an organization with its customers’ needs. That is, mass customization is not about achieving some idealized state in which a company knows exactly what each customer wants and can manufacture specific, individualized goods to satisfy those demands—all at mass-production costs. Rather, it is about moving toward these goals by developing a set of organizational capabilities that will, over time, supplement and enrich an existing business.
That set of fundamental capabilities is threefold: (1) the ability to identify the product attributes along which customer needs diverge, (2) the ability to reuse or recombine existing organizational and value-chain resources and (3) the ability to help customers identify or build solutions to their own needs.”
Requirements for Mass Customization
Frank Piller and his team at RWTH Aachen University go on to define the prerequisites a company must have in order to do mass customization.
“Solution Space Development A mass customizer must first identify the idiosyncratic needs of its customers, specifically, the product attributes along which customer needs diverge the most. Once that information is known and understood, a business can define its “solution space,” clearly delineating what it will offer — and what it will not.”
“Robust Process Design Next, a mass customizer needs to ensure that an increased variability in customers’ requirements will not significantly impair the firm’s operations and supply chain. This can be achieved through robust process design — the capability to reuse or recombine existing organizational and value-chain resources — to deliver customized solutions with near mass-production efficiency and reliability”
“Choice Navigation Lastly, a mass customizer must support customers in identifying their own problems and solutions while minimizing complexity and the burden of choice. It is important to remember that, when a customer is exposed to myriad choices, the cost of evaluating those options can easily outweigh the additional benefit from having so many alternatives. The resulting syndrome has been called the “paradox of choice,” in which too many options can actually reduce customer value instead of increasing it. In such situations, customers might postpone their buying decisions and, worse, classify the vendor as difficult and undesirable. To avoid that, a company can provide choice navigation to simplify the ways in which people explore its offerings.”
A Retreat in Mass Customization
Mass customization was an interesting idea bouncing around inside great thinkers minds for decades. It then became a management buzzword and seemed to be a magical miracle cure for any kind of stagnating business. In 2004 Frank Piller in “Mass Customization: Reflections on the State of the Concept” asks why, “do many firms fail during and after the introduction of mass customization?” and tries to understand, “why the present state of practical implementation of mass customization lacks behind the description and discussion of the phenomenon in the management literature.” More than a decade later his questions are still valid. Mass customization continues to be a exciting thing for companies to try. Often however the prerequisite care or attention or organizational transformation is not carried out in lockstep.
Even though the thinking is by now well established practical implementations often snag on very practical problems.
Beyond Mass Customization
Joseph Pine in a 2011 article Beyond Mass Customization that we should, “go beyond niches to embracing the truism that every customer is his own market” and “recognize that every customer is multiple markets” that today mass customization, “is an imperative in industry after industry to discover and fulfill the multiple markets within each customer.” To make mass customization work we need to “modularize our capabilities” and “link them together” to “work with each individual customer, creating a design experience through some sort of design tool that helps customers figure out what they want” then to “get that information back into operations to do something different for that customer” and finally to “remember your customers’ preferences.” He warns us that, “the most frequent mistake mass customizers make is overwhelming their customers with too much choice. Fundamentally customers don’t want choice; they just want exactly what they want.”
Just Want Exactly What They Want
And herein lies the rub. The paradox of choice freezes consumers overwhelmed by too many choices. Creating a “design tool that helps customers figure out what they want” is a difficult challenge. This is not one that a company is likely to ever attempted to do previously. Part art, part design, part psychology, part marketing, part customer service such design tools must give a person just enough choice. Like Goldilocks choosing three porridges and three beds to determine which one is “just right” consumers have to be given the right perceived and actual outcome while selecting and purchasing the item. If the client does not have a feeling that they’ve made the right choice then they will be motivated to make no choice at all or regret whichever choice they make. There has to be a payoff during the purchase process whereby the client is reaffirmed in the choice they make. This can either be done through visualization, data or cues to the person. Or through the person seeing, tasting or experiencing the “rightness” of their choice to such a degree that they can make a sufficient determination to be happy with it. If their choice process seems unnatural, finicky, too rushed or too overwhelming the client will shut down. If the choice process or design process is affirming and pleasant the person will arrive at a resolution that feels right to them.
Mass Consumption and Mass Marketing Kill Mass Customization
If a company is coming from a mass consumption and mass marketing baseline they will be ill prepared for the types of communication and dialog that they will have to have with their prospective customers. In a mass marketing scenario a strong message told well and loud enough will convince millions of people to buy an identical thing that is not by any means a suitable item for any of them. The message itself however and any values that the product conveys to them at the time of purchase will reaffirm their mass choice. People choose ill suited items each day because these choices are foisted on them. In a mass customization scenario you can tell the consumer that they are in the driving seat or that the product is “theirs” or unique; increasing their affect. They must however feel that the tool in question and the choice is just right in order to get a direct affirmation of their choice and to begin to experience the endowment effect. Once this happens then a consumer becomes a prosumer. Before that, he’s just a confused consumer looking at a tool he doesn’t understand. Most mass customization initiatives fail because they lead to confused consumers faced with new behaviors to learn.
Expectations of choice
Additionally communication from the outset must be clear about the types of choices that can and will be made and how the product is increased in value. Any overclaim by the company will be directly detrimental to conveying the feeling of endowment. In mass marketing it is a valid strategy to claim that XYZ Candy is the best, fruitiest, yummiest candy in the world even if you know it isn’t. Attaching a popular bear character to a snappy ad and uppity song will be enough to get people to buy it. The customers may in retrospect not believe some of the core claims of the brand or the individual message; but they may continue to purchase that item. More importantly they’ve already bought it by the time they’re disillusioned. The client is lead by the message and is by now cynical enough, after having watched hundreds of hours of commercials and bought thousands of things, to know that regularly; they will continue to be deceived. The client knows he may be deceived and indeed in some cases may expect this. If however you promise that person the experience of creating her ideal sunglasses, then at the point of purchase the customer will believe that they are being deceived if the proposed or actual sunglasses are not what you led her to believe. In the case of XYZ candy we remember the sugar high and the song. This may be enough for us to fool ourselves once again some days hence. If marketers claims however center on some magical ideal of “be a designer” and the interaction is making two choices than the consumer will not be prompted to buy because they found out that they were being deceived at the time of purchase.
Hotdogs and hygienics
If a hotdog vendor on the street screams to you that he has the “World’s Best Hotdog!!” you will automatically assume that he is exaggerating or directly lying. After all it is evident that the man is trying to sell hotdogs. You know he has to make a living and he is just trying to sell as many as he can. Depending on how good his cart looks or how many people are waiting in line this lie may be believable or not believable at all. From the get go however you doubt him at his word because you are cognizant of the fact that he is out there trying to make money. With hygienics or claims or reviews he could stave his marketing message. But, once you try the hotdog and find out that this particular street dawg is pedestrian at most and nowhere near the mouthfeel taste explosion depth of flavor conga party in your mouth that you believe that the ideal hotdog should be, will you be disappointed? Well not really because you kind of knew it in advance. What if the hotdog is terrible? You kind of knew that this was a risk too. But, do you blame him? Hate him? No, he’s just someone looking to meet ends. Meanwhile, if the same man conversationally approaches you and offers to teach you to together with him create the perfect hotdog for you, what happens? You are a team. You are a partnership. You’re working together for a common goal that benefits you uniquely. We’ve gone from pedestrian hotdog experience to a singular event: your day is interrupted by someone claiming to offer you an extraordinary experience that you never knew you wanted, the creation the perfect hotdog for you. If at the end of this process the entire creation process was terrible will you buy it? Maybe if you felt bad for the effort the man put in. Generally however you will be disappointed in yourself, in your former partner and in the hotdog: before you buy it. In the previous scenario you buy the dog and then are disappointed. In the mass customization scenario you were singularly happy and excited by the prospect and are disappointed before you hand over your money. Managing expectations, the design of the parametrization and the nature of the design tool and design process are key elements to designing successful mass customization initiatives. This is not a skill that many companies have ever attempted let alone mastered. By communicating in the same old push type manners they exacerbate negative feeling. A true dialog and process that is done in partnership and good faith with the consumer is key to making mass customization initiatives a success.
Marketing Dreams that die in ops
Companies implement ideas but do not change the teams, organizations or systems to manage these ideas or series of unique individual choices. Mindset or methodologies or culture often inhibit mass customization implementations. If you are in the business of designing one thing and making it a million times exactly to spec, using the same SOPs a mass customization plan is going to make half your organization want to dive underneath their desks. Systems and thinking as well as educating your staff can be crucial. Especially on the manufacturing and fulfillment sides of a business a mass customization initiative is often perceived as burdensome. It seems to add layers of poorly understood complexity with a potential increase in costs and error rates. If mass customization initiatives are to be implemented properly within the current structure of a business, this business and the people will have to change. In order for this to happen sufficiently for the mass customization project to be successful staff and partners need to be part of this transformation and understand its value to the business. Alternatively mass customization can much more easily be implemented in Skunkworks or small start ups where procedures, habits and people are not as regular. The interests of the business in mass customization are often counter to those people who have to actually carry out the plan. If manufacturing employees are not incentivized or motivated to implement a mass customization initiative often they see it as something that adds complexity and risk to their jobs whilst having a minimal possible payoff for them. Marketing and sales staff are seen as the tip of the spear. It is they who can reap the financial and ancillary rewards from a mass customization implementation. Supply chain, IT, QA and production workers are those that have to do the heavy lifting in a mass customization implementation however.
They are not compensated in the same way nor to they often stand to gain in the same way from the success of the implementation. Worse still, they often have KPIs in place that directly conflict with or are in danger of being harmed by the mass customization initiative. These KPI’s are often not changed to fit the implementation. If James has a machine capable of making a thousand metric tonnes of corn flakes an hour, John has to source 3 kinds of dried fruit in various quantities, Tom has 3 different boxes to pack and Mary has 10 SKU to QA than this is the old situation. In the new situation happy bunny from marketing hops in and tells them about a fairy tale land whereby individual batches of corn flakes will have 15 different varieties of fruit in them in different proportions and quantities and effectively increase their SKUs to a million while adding an order of complexity to everyone’s job.
Most mass customization implementations at this point assume that these people, who are incentivized by producing the least amount of errors, will welcome a significant increase of complexity to their jobs without any recompense. Most mass customizers will at this point then assume that everyone will go home and high five their partners because of the exciting new challenges that popped up at work today. If an internal mass customization initiative is to succeed it must be dreamt up by marketing and operations. They both must wholeheartedly be part of the design process for the final product and understand the process needed in order to get there. In other words, mass customize your mass customization initiative. If you do not do this it will be a marketing dream that dies in operations.
Mass customization is an interesting process that potentially can engage your customers through enabling them to choose and design exactly what they want to have at affordable prices. The theories are beautiful and there are many thousands of implementations worldwide from PCs to cars, jewels, apparel and consumer electronics. Companies are outcompeting the market, entering new markets and unlocking real value and growth through mass customization initiatives. Mass customization however is not easy. If mass customization is implemented within existing processes and with existing structures in place it will have to be transformational and be supported to succeed.