“Any customer can have a car painted any colour that he wants so long as it is black.”
Henry Ford (circa 1909)


More and more, I’ve been reading (and thinking) about the subject of Mass Customization which, I’ve come to respect, will become increasingly relevant in the decades ahead.  For the interest of brevity and clarity, I share a few key excerpts below:

BusinessDictionary.com defines:

Production of personalized or custom-tailored goods or services to meet consumers’ diverse and changing needs at near mass production prices. Enabled by technologies such as computerization, internet, product modularization, and lean production, it portends the ultimate stage in market segmentation where every customer can have exactly what he or she wants.

Wikipedia.com summarizes:

The concept of mass customization is attributed to Stan Davis in Future Perfect and was defined by Tseng & Jiao, (2001, p. 685) as “producing goods and services to meet individual customer’s needs with near mass production efficiency”. Kaplan & Haenlein (2006) concurred, calling it “a strategy that creates value by some form of company-customer interaction at the fabrication and assembly stage of the operations level to create customized products with production cost and monetary price similar to those of mass-produced products”. Similarly, McCarthy (2004, p. 348) highlight that mass customization involves balancing operational drivers by defining it as “the capability to manufacture a relatively high volume of product options for a relatively large market (or collection of niche markets) that demands customization, without tradeoffs in cost, delivery and quality”.

Digging slightly deeper, in chronological order —

Harvard Business Review introduces:

We have identified four distinct approaches to customization, which we call collaborativeadaptivecosmetic, and transparent. When designing or redesigning a product, process, or business unit, managers should examine each of the approaches for possible insights into how best to serve their customers. In some cases, a single approach will dominate the design. More often, however, managers will discover that they need a mix of some or all of the four approaches to serve their own particular set of customers…

  • 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…
  • Cosmetic customizers present a standard product differently to different customers…
  • Transparent customizers provide individual customers with unique goods or services without letting them know explicitly that those products and services have been customized for them…

Source: The Four Faces of Mass Customization, January-February 1997

The Economist teaches:

…Mass customisation is made possible by the use of information technology. Levi Strauss, which pioneered the idea in 1994 with its Original Spin jeans for women, measured customers in its stores and sent their details electronically to its factory. The customised jeans were then cut electronically and mailed to the customer.

The internet has greatly increased the possibilities for mass customisation. For example, Dell, a computer company, established its leadership of the PC market by allowing customers more or less to assemble their own PCs online. The company put together the components as requested at the last minute before delivery. Ford likewise allows its customers to build a vehicle from a palette of online options.

Companies that have difficulties introducing mass customisation tend to have them on two counts:

  • They fail to define clearly the dimensions along which they are prepared to allow their customers to individualise their purchase. This leads to unnecessary cost and complexity. Dell and Swatch do not offer consumers infinite choice. They are not trying to be all things to all customers. In any case, consumers generally prefer to be told what their limits are, and then to be allowed free rein within them. Successful mass customisers first find out what limits their customers are happy to live within, and then organise their operations accordingly.
  • They fail to shift their production satisfactorily from a system based on a series of tightly integrated processes, as demanded by mass production, to a system of loosely linked autonomous units that can be configured as and when the consumer wishes. As Joseph Pine, an early writer on the subject, put it: “Mass customisation organisations never know what customers will ask for next. All they can do is strive to be ever more prepared to meet the next request.”

Source: Mass customisation, October 29, 2009

IndustryWeek reports:

…SCM World, in cooperation with the non-profit association MESA international, recently completed a survey of 174 supply chain and operations executives to understand perspectives on the future of manufacturing. The key takeaway from the research is that manufacturing is now entering a new phase of customization-oriented production that is less concerned with productivity and efficiency and more focused on agility and responsiveness. The emphasis going forward will be on making to individual requirements, sometimes thought of as mass-customization, rather than high throughput, low variability mass production.

Forcing this shift is a dramatic increase in the complexity of demand coming from consumers. Surveys on the impact of digital demand—including e-commerce, mobility, social media and omnichannel retailing—all point to a big increase in the number of SKUs, variety of fulfilment modes and range of options expected by the modern shopper. Retailers struggling to keep up are putting pressure back on manufacturers to deliver more customized formulations, packages,and configurations for all kinds of products. Intense personalization like that offered by Nike, whose NIKEiD initiative lets consumers customize their running shoes and then have them made and shipped direct, is typical of a wave of customization that all manufacturers are seeing…

Source: Mass Customization and the Factory of the Future, January 14, 2015

Two eye-opening videos —

Above: The Future of Retail Mass Customization – April 27-28, 2015

 

Above: Mass Customization and Digital Enterprise with Robert Keane, CEO, Cimpress / Vistaprint – August 28, 2015

Finally, insights into Cimpress (2016 Investor Day Slides) from Matthias Riechert of Polleit & Riechert Investment Management at Wide-Moat Investing Summit 2015 on July 8, 2015: