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How can companies do this?

How can companies try and get accumulative capabilities?

So there are a couple of standard ways of doing this, and here I have a few listed.

So the idea of mass customization is a way of getting at cumulative capability,

where you have the advantages of mass production and

at the same time, you're able to customize the product for the customer.

So if you look at this list, starting up with modular designs,

let's talk some of these with a few examples.

So you could have a company such as Smart Cars, a company in Europe that

builds cars that are highly customized, and these have very modular designs.

So Smart Cars is a company that is a collaboration

between Swatch watches and the Mercedes car company.

And they had very modular designs which lets customers

choose what kind of combinations they want in their car.

So, they're able to deliver different combinations based on modular designs for

the fender, for the roof and for

different aspects of the exterior as well as the interior.

The second way of getting towards mass customization,

this idea of mass production with some customization for

the customer, is postponing the finishing of the product.

Benetton, which is garment company more popular in Europe,

uses this idea of postponement of finishing.

What they've done, is come up with a process of making their sweaters in white,

all the way, almost til the end of the production process.

And being able to dye them into whatever color is needed.

So postponement of finishing has helped them use the mass production idea and

customizing at the end based on whatever color orders

that come in from different stores.

Assemble to order, is the idea that was used a lot by Dell computers, and

Dell computers was known for giving their customers choices in

the kind of combinations they want and at the same time delivering at lower prices.

Customer involvement is used a lot in services.

If you go to a sandwich shop, which involves you in building the sandwich,

they're involving you in whatever kind of sandwich you're going to have.

So it's customization based on that customer involvement.

And, finally, the idea of using customer intelligence.

So companies have started using information about customers in customizing

the kinds of coupons that they send, the discount coupons that they send to

their customers based on the information that they have about the previous sales.

Online sellers do this based on previous purchases.

They make suggestions to customers about products that they might be interested in.

So that's one idea of mass customization, using information technology.

Now, it's going to be your turn to think about products that

use this idea of mass customization.

If you reflect on products that you see around you, you've

probably come across some products that have used this idea of mass customization.

That involve the customer in some way in customizing the product for the customer

and personalize it for whatever the customer needs are.

So, what we're going to do here, is you're going to think about a few of these

products, and then we're going to make inferences.

I'm going to ask you to make inferences about how they would've

achieved this kind of customization for

their customers from a process that otherwise is not very high cost.

So, hopefully you've thought of a few products where mass customization or

mass production and personalization have been combined in a good way.

I have a few examples that I'm going to share with you over here.

So, Hallmark is a company that's known for their greeting cards.

And they have this product called Recordable Storybooks,

which lets customers send in their audio stories and

is able to customize the products for them.

In terms of the production process, this company uses information technology and

the Internet to be able to achieve this objective for their customers.

Another example that you may be familiar with, is customized shoes from Nike.

How is Nike able to achieve this?

Again, using information technology involving the customer and

having a production process that makes some products in

a mass production environment, in a make to stock kind of environment.

And then, customizes at the end based

on different aspects that a customer is able to choose.

Ford Fiesta is an example much like

the Smart Car that we talked about earlier in this session.

It allows combinations of different exteriors and

interiors based on modular production.

The same idea that is used in Smart Cars.

The idea that pieces fit into each other relatively easily, and

so you can have multiple choices in each feature of the car and

are able to combine them in different combinations.

Personalized M&Ms with a happy birthday message,

with a photograph, are things that are produced by the company,

based on a process that is able to print.

If you think about it, quite a sophisticated process, that is able to

print the Ms on one side and flip each M&M over and put a message on the other side.

So mass customization based on

a production process that they have pioneered.

What you notice in all of these mass customization ideas

is the role of information technology.

In the first three of these, you see that information

technologies plays a big role in terms of what customers are able to do.

They're able to go in and request what they want, and

get the product for themselves.

And the last one, what you'll see, is the idea of Subway sandwiches, where mass

customization is based on, again, customer involvement, the customer going

to the store and picking and choosing some of the things that they want.

1-2.3b Tradeoffs and Combinations

Operations Management

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