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Mass Customization
Part 1 of 5


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MASS CUSTOMIZATION REALLY MEANS: "DON'T MAKE IT UNTIL YOU SELL IT!"

As companies begin to fully understand the impact of make-to-order mass customization, they soon rec­ognize that increased inventory levels of standard stocked products or semi finished modules fail to ac­complish the desired customer service objective. Some have sampled supply chain elixirs to achieve more sophisticated forecasting and planning solu­tions, but because of unsuspected complexity, most often realize suboptimal results. Facing product lines with ever-increasing numbers of options, they have most likely abandoned the use of statistical planning B/Ms for forecasting. They are nearly impossible to maintain and have merely confused the requirements planning explosion logic of their classical ERP/MRP processes.

They finally recognize the absolute necessity to squeeze cycle and lead times out of the field sales, internal order entry, engineering, and manufacturing processes. This realization, applied to nonconfigured products, is normally achieved through setup reduc­tion and smaller and more frequent lot sizing. For optioned products, the ultimate result is to produce just exactly what the customer wants in as short a time as possible using current parts or raw material inventories plus scheduled pipeline material—after the order is booked.

As more and more companies arrive at this conclusion and adopt a mass customization mentality, they begin to reengineer factory layouts and resulting product structuring strategies. According to a recent sur­vey of large manufacturing companies by Advanced Manufacturing Research (AMR), "73 percent are scheduling production based on ac­tual orders, rather than an (exploded) plan"—or, in simple words: "Don't make it until you sell it!" Since most configured products are engi­neered to provide zillions of option mixes that cannot be uniquely and successfully forecasted ahead of order bookings, an alternative strat­egy needs to be implemented in order to "response-ize" the order-to-shipment cycle times.

WHO WILL BE THE FIRST TO ORGANIZE THESE NEW CUSTOMER RESPONSE STRATEGIES?

Street-smart managers within factory operations instinctively know what to do—simplify and focus their factories around product family-oriented lines or cells that are designed to handle in-line option mixes. Where appropriate, fabricated-to-order component manufacturing ve­locity is also achieved through setup reductions to accommodate a lot size equal to a single customer order. In reality, shop floor reorganiza­tion repeatedly precedes the other potential functional improvements that often sluggishly remain as part of the cycle time critical path. En­gineering readily responds to this strategy when the option B/M main­tenance becomes excessive; production control when shop floor paper changes becomes cumbersome or JIT component visual replenishment prevails; and marketing when competitors achieve significant lead time reductions or mature Web home pages. The common denominator that enables all of these functional improvements is robust and multifunc­tional product configuration software that spans the entire continuum of the company's requirements. "From the customers lips—till the or­der ships."

Product Configurators are like part-numbering schemes—everyone wants to get into the act to make sure their requirements are covered. The initial interest, however, is often sponsored by the single functional area staff who first perceive the benefits to their, own function. This can lead to a very skewed outlook that can so easily become subbptimized. When looking for product configuration packaged software, a company's task force team quickly realizes that most offerings are highly specialized around the needs of a single functional area.

Marketing often gets impressed with "cutesy" graphical front ends or Internet e-commerce potentials designed specifically to aspirations of their field sales force and selected customers. Production management is concerned about integration with a legacy MRP/ ERP system, and engineering is consumed with drawing systems, flatten­ing their B/Ms, and CAD/CAM interface potential. In any case, it be­hooves the company to thoroughly expose a task force to all the ramifica­tions of Configurator implementation in order to properly balance imple­mentation efforts for maximum return on a significant investment. This should prevent any single function from making commitments that may turn out to be inappropriate and short-sighted.

Most manufacturers of optioned-to-order products will eventually choose to migrate configuration functionality to the field to automate remote activities for interactive selling (quoting and order entry). Se­lection of configuration software that was not architected to be de­ployed on nomadic, stand-alone detached laptops, or on the Internet, would be a significant oversight. MRP/ERP vendors often provide Configurator modules that are part of their host system and have been by necessity architected on a hierarchical top-down model/modular-B/M concept. However, users soon discover these solutions offer weak func­tionality compared to the bolt-on offerings of highly specialized "best-of-breed" configuration software solutions. Likewise, a company should no longer need to consider the necessity of developing a homegrown unique configuration solution. Also questionable is a choice to employ more than one configuration solution since configurator nomenclature and rules will embrace the common product language across all func­tional areas of the company. Consistency, simplicity, and ease of user maintenance, therefore, become key selection considerations.

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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