What Is Mass Customization?

Mass Customization (MC) is a system that integrates enterprises, customers, suppliers, employees and the environment. Under the guidance of system thinking, from the perspective of overall optimization, it makes full use of the existing resources of the enterprise. Supported by technology, modern design methods, information technology and advanced manufacturing technology, according to the individual needs of customers, low-cost, high-quality and efficient production of customized products and services is provided in mass production.

Mass customization

Mass Customization (MC) is a collection of enterprises, customers,

In new

What is mass customization

Development of scale customization

Scale customization ideas

Customized products and services

Technical revolution and changes in production methods

1860s, British steam engine, workshop handcrafted to factory

The basic idea of mass customization is to use modern information technology, new material technology,

Provide delivery

There is only one way to know exactly what a customer wants: Have the customer tell you or tell them what they really think at the point of sale. There is only one way to provide what the customer wants immediately: produce the product at the point of sale or delivery, or at least locally complete the final

Core competence performance

The core capability of a mass customization enterprise is its ability to provide customers with sufficient product space at a low cost and high efficiency, thereby ultimately meeting the individual needs of customers.

Compared with traditional customization

To meet the individual needs of customers, traditional custom-made enterprises can do it completely, but the traditional custom-made production mode can only produce a limited variety of products, except for small crafts.

Ability to accurately capture customer needs

With today's highly developed science and technology, especially information technology, the operating environment of enterprises has undergone fundamental changes. Whether the customer is satisfied with the company's products and services will be a key factor for the survival and development of the company, and customer satisfaction will be the source of the company's benefits.

Get exactly

Why it is difficult to implement effectively

Mass customization helps companies enter new markets and attracts a large number of customers whose personalized needs cannot be met by standard products. However, original mass customization was both costly and inefficient. If customized products exceed customer expectations in terms of time and cost, only existing customers will be lost. Of course, if you can't implement and fulfill the commitment to scale, this is also a loss for the enterprise. Therefore, if there is no corresponding low cost and high efficiency

Modular manufacturing system

Similar to the modular product design, the modular production unit has a standard interface and has good replaceability. When user needs change or unexpected failures can be achieved through the replacement of modules to meet dynamic demand changes, making the manufacturing system Flexible and fast response capabilities to meet mass customization requirements. According to the product type of the enterprise, the production line platform is constructed by some common modules, and the product range of the production line is adjusted by changing some modules for specific customers and applications. The key problem of modular manufacturing system is the interface between modules, including hardware interface and information interface. If the interface between the modules is standard, the production engineer can

"Dell" Application Analysis for Mass Customized Supply Chain Management

Background of mass customization implementation

1. Dell Company Profile. Dell, headquartered in Austin, Texas, is a leading global provider of IT products and services. Dell was founded in 1984 by Michael Dell. Dell is one of the fastest growing companies in the global IT industry. In 1996, Dell began to sell Dell computer products through direct sales through its website. Vendor. Dell has developed from a computer parts assembly shop to a Fortune 500 company in the past 20 years. Its straight-line ordering model and efficient supply chain management are the guarantee for its rapid development.

2. Reasons for "Dell" to implement mass customized supply chain management. At the beginning of Dell's establishment, it provided customers with computer assembly services. Innate R & D capabilities and core technologies have certain gaps with companies such as IBM and Hewlett-Packard in the industry. To occupy a place in the market competition, the computer value chain must be further split Opportunities, rely on management innovation to gain cost advantages. Therefore, although Dell has business and marketing model innovations in the development process, it focuses on cost control and manufacturing process optimization, especially the direct sales model, which can reduce intermediate channels and directly face final consumption. In order to achieve the purpose of reducing costs, the implementation of supply chain management for mass customization can help "Dell" to effectively cooperate with suppliers and achieve virtual integration, reduce inventory cycles and costs, and thus obtain the advantages of high efficiency and low cost. This is where its core competitiveness lies.

Mass customization implementation foundation

1. Standardization of components. The modular design of products and the standardization and generalization of components are the basis of mass customization. The products are divided according to their functions and modularized design, product families and component families are established, a series of functional modules are designed, and different products are formed through the selection and combination of modules. In this way, modular products facilitate rapid reorganization according to different requirements, effectively combining product variability and standardization of parts and components, which helps to transform the production of customized products into mass production. Although the requirements are different, they also have similarities, and mass customization is not 100% customized. Therefore, the key to implementing mass customization is to truly understand the individual and common needs of customers in essence, and then to individually plan the individual and common needs of customers, and organize production and supply according to different supply chains. To ensure high quality, low cost and fast delivery of customized products. The biggest feature of Dell products is complete standardization. From the development of "Dell" in recent years, although it has continuously expanded its product line, all products are standardized products. Its main products, including PCs, notebooks, and servers, including EMC's storage series and Brocade's switch series, are standardized and highly compatible products.

2. Assemble to order. Referring to the four categories of mass customization, Dell is a typical representative of the use of Assemble-to-Order. The order-to-order model is particularly suitable for personal computers based on the following reasons: fast product updates and rapid decline in parts prices make the after-sale inventory cost high; the modular design of the PC makes assembly very simple and fast, so labor costs only account for PC costs A small part of the customer; customers are concerned about product prices and services, but not too concerned about waiting time and unique design. The make-to-order production model focuses on meeting individual needs, and the premise of achieving this purpose is the timely and accurate acquisition and processing of market demand information. Relying on its modern information platform, through the sharing of information resources, Dell has enhanced the ability of all parties in the supply chain to obtain information, accurately and timely capture demand information, and has improved the company's response ability, making supply chain management a differentiated competition An important source of advantage.

3. Development of information technology. With the development of the Internet and the popularity of e-commerce, e-commerce platforms have partially replaced the functions of distributors and retailers. The customer makes customization requirements to the main enterprise through the e-commerce platform, and the main enterprise collects and organizes information from it through data mining and other technologies, and then decomposes the customer's order through customer relationship management. The decomposed order information becomes the basis for the enterprise to make purchases, and the main enterprise is also connected with its suppliers and manufacturers through procurement. The extensive application of information technology and electronic tools helps "Dell" achieve the above requirements. "Dell" electronic supply chain system provides users and suppliers at both ends of the chain with virtual platforms for online transactions. More than 90% of Dell's procurement processes are completed via the Internet. Through close communication with suppliers, the factory only needs to maintain inventory for 2 hours to meet production. In addition, "Dell" also launched an enterprise intranet called valuechain.dell. All suppliers can see their own company's material reports on the website. They can master the material quality, performance evaluation, cost budget and manufacturing process at any time. Changes and other information. Not only that, "electronicization" also runs through the entire process from supplier management, product development, material procurement to production, sales and customer relationship management, which has become the basis for Dell's implementation of mass customized supply chain management.

Mass Customization Supply Chain Master Model

In order to meet the needs of customer-driven production and enterprise alliances, "Dell" directly contacts customers through e-commerce platforms or telephones to understand customer needs, and uses a direct sales model to deliver products directly to customers. The core of this model is the rapid response capability of the supply chain, including a series of purchasing, production, and distribution links behind direct sales. It uses advanced information methods to keep the information flowing and interacting with customers, and understands the individual needs of each customer. . It can be seen that "Dell" 's direct sales model is based on direct ordering. With its efficient supply chain management, it responds quickly to the market and provides customers with diverse products and services. This model has also weakened or even disappeared the role of distributors and retailers, leading to a gradual transformation of the supply chain structure into an open network structure composed of raw material suppliers, manufacturers, main enterprises and customers, as shown in the figure below.

As can be seen from the figure above, with the development of the Internet and the popularization of e-commerce, e-commerce platforms have replaced distributors and retailers as the bridge between Dell and customers. The customer made customization requirements to "Dell" through the e-commerce platform, and "Dell" used the advanced technology of data mining to collect and organize information from it, and then decomposed the customer order through customer relationship management (CRM). The decomposed order information becomes an important basis for enterprise procurement, and through the purchase, Dell is also closely linked with component manufacturers and raw material suppliers. Second, since suppliers and component manufacturers initially determine their inventory based on demand forecasts, "Dell" should pass the customer information collected through the e-commerce platform to suppliers and manufacturers in a timely manner so that they Reduce inventory as much as possible. Finally, when "Dell" sends the customer's customized product to the customer, the customer's feedback information should also be passed to the CRM system in order to better communicate with the customer.

Features of Mass Customization Management

1. Strict selection of suppliers, virtual combination with suppliers, and establishment of partnerships. "Dell" has a complete set of supplier selection and certification systems. The evaluation criteria for suppliers are mainly to see if they can continuously provide flawless products. The objects of assessment include not only products, but also the entire product production process, that is, suppliers are required to have a quality control system that meets standards. To become a "Dell" supplier, a company must demonstrate that it has comprehensive comparative advantages in four areas: cost, technology, service, and continuous supply capacity. In particular, the supply capacity must be stable for a long time to prevent the impact of unstable supply "Dell" commitment to end users. In the evaluation of suppliers, "Dell" adopted the "SAFE LAUNCH" approach. Based on the evaluation results of suppliers, it gradually expanded the scale of procurement of its products in order to reduce the supply of newly selected enterprises. Risk of unstable capacity. Virtual combination with suppliers is a new model that is different from traditional management. It breaks through the physical boundaries of the organization and retains only the key functions that can represent the characteristics of the enterprise. According to the theory of comparative advantage and core competitiveness principles, Non-core business is outsourced to professional companies that are good at these functions. Because the needs of customers will change at all times, the production of product parts must also keep up with the market. If "Dell" produces parts by itself, it will not only require a large amount of capital and technical investment, but also a strong R & D capability Keeping parts and components in sync with market demand will increase costs significantly. Moreover, "Dell" does not have other suppliers more professional, so "Dell" has taken outsourcing the production of parts to those powerful large suppliers. The other party forms an alliance to meet customer needs together.

2. Efficient inventory management-low inventory of materials and zero inventory of finished products. In terms of inventory quantity management, "Dell" has always been known for its low inventory of materials and zero inventory of finished products. Its average material inventory is only 5 days. In the IT industry, its closest competitor with "Dell" also has more than 10 days. Inventory, the average inventory of other companies in the industry is about 50 days. Because the cost of materials will depreciate by 1% every week, the number of days of inventory has a great impact on the cost of the product. Low inventory alone gives Dell products a price advantage of more than 8% compared to other competitors. Customer orders are transmitted to the supplier's public warehouse through Dell's data center, and then managed by Burlington, a third-party logistics company of Dell's global partner. Burlington can quickly dispatch the goods within one hour after receiving the "Dell" list, and the goods can be delivered in less than 20 minutes. "Dell" 's inventory management is not just focusing on "low". Through two-way management of its supply chain, it takes into consideration the needs of users and the supplier's supply capacity, so as to achieve the best balance between the two, thereby achieving " "Dynamic inventory balance", this is the ultimate goal of "Dell" inventory management.

3. Effective customer relationship management (CRM). "Dell" can accurately and quickly grasp the personalized needs of customers through "one-on-one marketing" for key customers. In the mass customization model, the relationship between the enterprise and the customer is a coordinated and interactive relationship that completely transcends the connotation that the enterprise usually collects information and meets the needs of the customer. Producers and consumers are no longer the traditional supply-demand relationship. Production companies are no longer the party that actively provides products (services) just to win customer satisfaction and to make customers loyal; consumers are not traditional passive receivers of goods. Customer relationship management for mass customization requires production enterprises and consumer customers to interact and integrate with each other. When customers have identified their needs with the help of "Dell", the sales staff will provide them with the products they need based on their requirements. After the product is sold, the customer's understanding does not end. The sales staff will also establish customer information files through telephone, Internet or face-to-face communication, perform quality tracking services, and continue to explore new customer needs. Dell believes that understanding customers is as important as understanding themselves. To create a complete consumer experience for customers, the company should develop new products based on the customer's perspective, tailor-made for customers, and achieve "interactive effects".

The disadvantages of mass customization management

Even the best companies have their shortcomings. After experiencing rapid development until it became the dominant player in the PC industry, Dell has also encountered a series of problems such as declining performance and product quality complaints. This shows that with the fierce market competition and changes in customer needs, the inherent model must be constantly innovated and improved. "Dell" pursues standardization to meet the most commonly used needs of the most people, so that the purchase cost is too low, and product quality problems will inevitably occur. Although most of them are minor problems, which can be remedied and resolved by "Dell" after-sales service, but after all, it affects the realization of customer experience value. Because "Dell" adopts the build-to-order (ATO) production model, which can guarantee the mass production of standardized parts, but in terms of customer customization, due to the back of the customer order separation point (CODP), only Assembly activities and downstream activities are driven by customer orders. In an environment where customer needs are increasingly emphasizing personalization, customers may not be satisfied with the fact that they can only choose components of different specifications to achieve customization, but instead require that the product be customized in all aspects from appearance to function.

Mass customization conclusions and implications

Through the mass customization production model of "Assembly to Order", Dell uses the modern network technology to perfectly combine the low-cost advantages of mass production with the high value-added advantages of personalized custom production, which not only reduces its inventory costs , Collected information on customer needs, but also greatly improved their satisfaction. By establishing an ultra-efficient supply chain and production process management, "Dell" has realized immediate production and zero inventory, and has virtually integrated with suppliers to build core competitiveness, all of which rely on standardized product parts design and Advanced information technology platform. "Dell" is gradually shifting to a global comprehensive supply chain management. In this way, a huge supply chain system is formed between production plants and suppliers, which effectively achieves global integration and makes resource allocation more efficient and reasonable.

In the face of an increasingly competitive market, it is imperative for companies to innovate their production models and management thinking if they want to take the lead in market competition and continue to develop. "Dell" company's supply chain management model for mass customization has certain reference significance for domestic enterprises. Enterprises must solve three problems in the implementation of supply chain management oriented to mass customization. The first is to achieve effective integration of internal resources. Enterprises must recognize that the rationalization of existing products and the standardization of parts and components are the basis of supply chain management for mass customization. They should pay attention to the application of delay strategies and the construction of information platforms and the application of information technology, and ensure a flexible organizational structure to Take advantage of the supply chain. The second is to establish an external collaborative relationship of strategic cooperation, to quickly integrate the external resources of the enterprise, to ensure that the organization can supply quickly, and to uniformly allocate and integrate the manufacturing resources of all suppliers, effectively evaluate the overall supplier, and establish with the supplier. Strategic Cooperation Alliance. The third is to accurately and quickly grasp customer needs and establish customer-centric customer relationship management. Establish and manage customer database systems, carry out "one-on-one" marketing, and establish an online marketing platform to ensure the success of supply chain management for mass customization.