University DeVry Operations Strategy BSOP206
Group Final Mass Customization & Postponement in SCM
Krystal Obando Mahanaim Peterson Jannie V. Gonzalez Professor Zalila December 8, 2006
Mass Customization & Postponement Postponement is the delaying of any modification or customizations to the
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product as long as possible in the production process. When someone places an order with Dells build to order website, production is held off until after an order is placed. The company has the basic computer made with stock software and other components. Dell will not finish any production until the customer sets their specifications of what they want in their new computer. "Holding ,,components in inventory and assembling them only after the customer has placed an order, is a postponement strategy that is more appropriate for Dell." 1 The requirements for a postponement strategy to work are that a company must have a high variety of product, flexible manufacturing systems, and real time information and communication. The real time information is very important because once an order is placed by a customer the company must receive the order as soon as possible to begin the process of customizing that computer to the customers needs. This allows the company to complete an order quickly so it can be sent out to the waiting customer as rapidly as possible. There is very little time when a good is finished and when it is sent out. This lowers the holding cost greatly by having less finished goods stored in inventory. The other advantage of postponement is the low transportation costs, an easy customizable product, and the improved competitiveness.
Mass customization is a rapid, low cost production that caters to constantly changing unique customer desires. Mass customization involves a high volume of products and a wide variety of product. A big risk is being taken when
Mass Customization & Postponement someone wants to start mass customization of a product, but it will pay off with big rewards. Some advantages of Mass customization are that a company will have fewer inventories to hold in storage which will reduce holding cost. It also eliminates the need to forecast, since the company does not know what product to make until the order is completed by the customer. Effective scheduling is another advantage of mass customization, seeing as the products will move swiftly through the facility once a customers order has been received.
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Dell took a huge step in mass customization when they allowed the customers to build their own computer. This move was a risk which has paid off with huge success for Dell. "Dell is able to configure each computer that it sells to meet the needs of the individual buyer."
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Dell customers have a lot to choose from, they
can pick the memory space, storage, processor, and other equipment like web cameras, keyboard, and printers. A fast processor would be used mostly by gamers, all-in-one printers are used by small business and home offices. Dell finds a way to suit anyones needs. No other company has achieved the level of success that Dell is achieving in mass customization.
Mass customization and postponement have a lot in common. In fact, postponement is a huge part of mass customization and postponement work together is the computer company Dell. Dell uses mass customization, which lets the customers, chose the features and software they want on their computers. Each computer from Dell is made exactly how the customer wants it when they
Mass Customization & Postponement want it. Postponement means the product isnt until made it is ordered by the customer. Dell is one of the most successful companies that use mass
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customization and postponement. It is a great way to satisfy every customer with what they desire.
There is a huge change going on with supply chain management in many businesses because they are noticing that customers enjoy customizing their items. Not only that, mass customization reduces cost, inventory, forecasting, and improves competitiveness. With every product being different, there is no need to forecast and make in advance the products. The business doesnt know what the demand will be until the product is ordered. Since the company only makes what is ordered, there is also a less risk of having surplus or stock-out. Inventory is reduced because the only material need isnt known until the products ordered. Dell has beaten many other companies because Dell has managed to offer a provider-customer relationship, which no one can duplicate.
There are different methods of mass customization. Some companies decide to assemble some parts before the product is ordered. For example, Dell assembles all of the hard drives, which makes it easier to make the computer when ordered.
These are the steps to customize your own Dell computer. The first step is to go to the Dell website and select the product you would like to customize. This will
Mass Customization & Postponement either be a notebook or a desktop. Your next step in customization will be to choose a processor that best fits your needs. You will also need to choose an operating system which will most likely be Windows XP. In 2007 the new Windows Vista operating system will be coming out to the public and you have the option of choosing that if you plan to upgrade in the future to Vista. Now the next steps will decide how your computer runs. The memory you choose will be
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a factor in how much space you can take up with your music, games, and photos so decide how much space is necessary for you. A hard drive and optical drive are next on the list. Someone will want a rewritable CD drive if they like to make their own music mixes or make picture CDs. Dell also lets you decide what size of monitor you want. Size range from 17 inch to 20 inch and also comes in widescreen. A video card is a must if you plan on doing a lot of gaming with your new Dell. But if you plan on gaming you will want a great sound system and speakers which is next on the list to choose from. The other accessories you will choose for your new Dell are: printers, a webcam, and the essential keyboard and mouse. The last options are all optional too but deal with your internet and storage. A wireless networking card is very convenient for a notebook. Back up storage is great for those who do a lot of business on their computers and dont want to lose crucial data. A media reader is easy access to digital pictures and a floppy disk drive is also an option for those who still use it. The step in customizing your Dell will be choosing software. You will choose software from antivirus, internet security, to different games and media players. Building your own Dell is a great way to have your home or business run smoothly.
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REFERENCES
Whatever Happened to A Mass Customization? Laurence P. Feldman, Ph.D.; Laurence P. Feldman & Associates [Source]. Retrieved November 29, 2006 from the World Wide Web: http://www.pdma.org/visions/oct98/feldman.html
Business Intelligence [Source]. Retrieved November 29, 2006 from the World Wide Web: http://www.cfo.com/guides/guide.cfm/3242196?f=insidecfo&origin=archive