2962677059 - Mass Customization at In many mass markets,...

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Mass Customization at In many mass markets, companies are facing a predicament. On the one hand, cus- tomers are demanding that their orders be fulfilled ever more quickly. On the other hand, they are de- manding highly customized products and services. Even without trying to customize their products, most companies have found it difficult to fulfill or- ders swiftly and at an acceptable cost. Is it possible, then, to mass-customize products, deliver them rapidly, and at the same time reduce costs? The Hewlett-Packard Company has confronted these pressures in many of its husinesses, includ- ing computers, printers, and medical products. It has proved that companies indeed can deliver cus- tomized products quickly and at a low cost. Some by Edward Feitzinger and Hau L. Lee companies in such industries as apparel, paint, and consumer electronics have had similar success: they have dramatically increased their product va- riety, slashed the time they require to fulfill cus- tomers' orders, and reduced costs. Other companies have not; they have mass-customized only to see their costs soar out of control. The key to mass-customizing effectively is post- poning the task of differentiating a product for a specific customer until the latest possible point in the supply network (a company's supply, manufac- turing, and distribution chain). Instead of taking a piecemeal approach, companies must rethink and 116 PHOTO BY TONY RINALDO
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integrate the de- signs of their prod- ucts, the processes used to make and deliver those products, and the configu- ration of the entire supply network. By adopting such a comprehensive approach, companies can operate at maximum cffi- ciency and quiekly meet customers' orders with a minimum amount of inventory. Three organizational-design prineiples together form the basic building blocks of an effective mass-customization program: D A product should be designed so it consists of in- dependent modules that can be assembled into dif- ferent forms of the produet easily and inexpensively. D Manufacturing processes should be designed so that they, too, consist of independent modules that can be moved or rearranged easily to support differ- ent distribution-network designs. D The supply network-the positioning of invento- ry and the location, number, and structure of manu- facturing and distribution facilities-should be de- signed to provide two capabilities. First, it must be able to supply the basic product to the facilities per- forming the customization in a cost-effective man- ner. Second, it must have the flexibility and the re- sponsiveness to take individual customers' orders and deliver the finished, customized goods quickly. Modular Product Design A product with a modular design provides a sup- ply network with the flexibility that it requires to customize a product quickly and inexpensively. Hewlett-Packard:
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2962677059 - Mass Customization at In many mass markets,...

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