Resource Implications of Manufacturer- Customer Interactions in Mass Customization

Resource Implications of Manufacturer- Customer Interactions in Mass Customization

Emmanuel T. Kodzi Jr. (Strathmore Business School, Kenya) and Rado Gazo (Purdue University, USA)
DOI: 10.4018/978-1-60566-260-2.ch003
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Abstract

This chapter explores the relationship between the capabilities of a manufacturing system and the participation of end-users in order determination. Using a simulated customer-direct mode for the customization of selected wood products, the authors examine manufacturing system attributes that enhance direct interaction with customers. The authors discuss strategic implications of the choice of customization-mode on fundamental resource requirements, and set out practical recommendations for deploying mass customization as a competitive strategy. End-user participation in configuring customized products requires that beyond desirable attributes such as agility in manufacturing systems, compelling service capability be developed to enhance customer experience.
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Introduction

Given a specific mode of customization, an organization’s ability to engage customers in collaborative order determination is a function of the resources it possesses or develops (Brown and Bessant, 2003; Hart, 1995). The desired resources for mass customization include the capability to manage the increased levels of complexity associated with integrating individual customer preferences into product offerings in a cost-effective way (Mok et al, 2000). To enhance successful collaboration, market-driven organizations must also posses the capability for linking customers effectively (Day, 1994). Relative to a scenario where the order-determination process is moderated by retail channels, a manufacturing system that interfaces directly with the end-user may require a more comprehensive deployment of resources. However, though customization may be offered through retailers (especially where product options may be selected and incorporated at the point of sale) retail-driven customization may not always be an attractive proposition from the standpoint of managing a manufacturer’s brand. The opportunity to leverage customers’ loyalty to a brand, and its implications for trust and long-term relationships, may provide sufficient basis for a manufacturer to consider direct collaboration with the customer (Berger et al, 2005). Thus, the complexity inherent in direct collaboration must be recognized and managed proactively through building the necessary capabilities.

In a study of a customer-direct offer of customized signage, Kubiak (1993) outlined how the iterative co-design process for determining and fulfilling customer preferences slowed down operations and increased costs as a company expanded its hitherto successful offering. The inability of the company to provide guidance for customers severely eroded earlier competitive gains; cross-training of employees needed to support the consultation for co-design was found to be lacking. We consider the proposition that specifying the key resource interactions that exist at the onset of the customization offer, can facilitate a more systematic translation of the essential mass customization principles in the growth phase of the business. From a resource development perspective, any competitive gains from an initial offer of customization could then be more easily retained as the company’s operations expand.

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