How mass customization redefines the nature of your business
Customer empowerment drives the value chainCompanies have always sought the best ways to respond to customers’ needs. In the 20th century, industry focused on mass production and the quest for economies of scale to come up with compelling value propositions. The late 80s and 90s saw the emergence of an opposing approach driven by the idea that customer satisfaction could best be achieved through individually designed products and services. The opposite of mass production, “mass customization” was born.
“Car manufacturers have offered configurable ‘options packages’ for quite some time,” Merijn notes. “Starbucks lets you create your own cup of coffee, and Nike gives you the freedom to design the look of your sneakers. But this degree of customization pales in comparison to earbuds made to fit the anatomy of your individual ears, or personalized diet plans based on a sample of your DNA.”
“Consumers’ mindsets have fundamentally changed – they now think in terms of what companies can provide for them, rather than relying on companies to figure that out,” continues Merijn. This trend is on the rise, with digital natives comprising an expanding consumer group and examples of mass customization emerging on all sides.
We see the same trends in in B2B. Think of Hoffman, a subsidiary of Pentair, which offers custom electrical closets, or Flying-parts.com, which produces co-designed parts at half the cost of those offered by conventional aviation parts manufacturers. Traditional B2B sectors such as construction and glass production are looking at mass customization models, often making use of 3D printing solutions.
Industry 4.0 technologies in the driver’s seat of “customer-obsessed” business models
In all of these cases, companies have created a new or an improved business and operating model, starting from the customer’s need.
“This is ‘outside-in’ or ‘customer-obsessed’ thinking,” Koen explains. “Industry 4.0 technologies have been introduced to both customize the customer experience and cutting out or automating tasks and assets that don’t create value.”
“Mass customization and outside-in thinking aren’t new, but new technologies make it accessible and profitable for many companies,” Merijn asserts. “Data analytics, digital factories, social media, 3D printing, intelligent configurators – these help businesses understand and anticipate customer journeys and deliver according to precise needs.”
Launching your mass customization questWhether it’s a new business model or the transformation of a traditional model, getting started on the mass customization journey requires a few key capabilities.
First, it’s important to define customization opportunities that create value for the customer. “An outside-in mindset is essential to define the right value proposition,” Koen explains. “Ask yourself: ‘what does the customer want customized? How fast? At which quality and convenience level? At what price?’”
The second capability is to create a profitable operating model made up of robust processes, systems, organizations and people that supports customer empowerment across the value chain. This challenge is about defining a manageable cost structure and a manufacturing environment able to fulfill customization levels.
“Lean thinking and quick response manufacturing (QRM) are highly relevant to mass customization, as creating added value for customers is at the core of lean thinking,” continues Koen. “Techniques such as value stream mapping are valuable in redesigning processes. Lean also favors flexible ‘pull’ production systems, which are appropriate for flexible value chain and manufacturing models vs. batch production systems.”
The third capability is an understanding of how best to help the customer make the right choices during the navigation process. “Too much choice can lead to indecision and paralysis, a phenomenon known as the paradox of choice,” Koen explains. “New technologies like AI-based variation matching or predictive choice anticipation with intelligent presets and intelligent configurators can help avoid this effect.”
Our added value: delaware as a strategist, architect and builder“These three roles are absolutely necessary to deliver a successful result,” Koen states. “First, you must design the right mass customization value proposition model based on customer ‘satisfiers’. Secondly, a profitable and flexible operating model supported by robust and flexible processes and Industry 4.0 technologies must be developed. Finally, it’s necessary to build capabilities on both the business and technology sides to put the customization model into practice.”
delaware is renowned for combining strategies, efficient business models, business processes and Industry 4.0 manufacturing and information technologies. All are invaluable assets in delivering your profitable mass customization model for tomorrow, today.