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Product Customization
Part 1 of 4

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The concept of "Mass Customization"—greater product variations at affordable prices—has been identified as a key competitive strategy of the 90's. (1) High volumes of custom-configured products increase the chances of costly configuration errors cascading throughout the life cycle of orders. Recent documented research reveals numerous opportunities to reduce substantial errors in order process­ing, manufacturing and shipping.(2) In such a business environment, effective Information Technology becomes a key factor.

To gain the benefits of Mass Customization, classic MRPII systems based on "Make-to-Stock" techniques need to incorporate the capabilities of Configurators—rules-based systems to create, manage and maintain high volumes of complex product information related to options and varia­tions of the product. The spread of Mass Customization concepts has stimulated numerous software offerings to support the demanding Information Technology needs of companies fighting for survival.

Overview of Presentation

In this presentation, the concepts of Mass Customization will be briefly introduced in order to provide a strategic perspective on Configurator systems. The role of Informa­tion Technology (and the component of Configurator sys­tems) can be better understood—and justified—within the concept of Mass Customization. The remainder of the presentation will describe Configuators: background, re­cent developments, sources of software and the implica­tions of integrating Configurators with other enterprise systems. Finally, some conclusions will be stated regard­ing the future of Configurator systems.

Overview of Mass Customization

The concept of Mass Customization has been comprehen­sively described in Pine's book.( 1) The definition is "Devel­opment/Production/Marketing/Delivery of customized prod­ucts and services on a mass basis." There are several reasons why the concept of Mass Customization is impor­tant to the APICS community:

1. The concept of Mass Production is no longer applicable; long production runs to lower unit costs has been destroyed as a paradigm. Manufacturing companies can now achieve both short runs and low cost—and with high quality with effective use of Information Technology, low volume manufacturing techniques and substantial organizational and cultural improve­ment.

2. The marketing environment of the 90's promises to be more turbulent and the customers more demanding. In fact, the market niches seem to be narrowing;
market researchers no longer identify markets, but customers, maybe even individual customers!

3. Survival!

The concept of Mass Customization encompasses a series
of strategic decisions regarding the product design as related to a company's vision of customer service. There are several choices:

1. Customize services around standardized products and services.
2. Create customizable products and services.
3. Provide point-of-delivery customization.
4. Provide quick response throughout the value chain.
5. Modularize components to customize end products andservices.

Pine also recognizes the significance of the many newer manufacturing techniques (e.g., setup reduction, etc.) to support Mass Customization. Though Configurators are not discussed in the light of the product design choices listed above, the relationship is clear—Configurators must be a key component of Mass Customization. For more detail, refer to his book.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and go to Series 01


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