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Meeting customer needs more efficiently through mass customization

As consumers we expect to be able to personalize many of the things we buy—configuring a computer to meet our needs, choosing the color of a phone or tablet, or selecting the paint finish for a new car. Even a pair of sneakers can be personalized in terms of color and material, or with the buyer's own design or favorite sports team's logo.

It's no surprise that today's business buyers are increasingly influenced by their experience as consumers. In effect, the era of mass production is giving way to a new era of mass customization that has traits in common with the pre-industrial world, in which many things—from clothing to carriages—were made to meet individuals' needs.

Implications for make-to-order (MTO) manufacturers

By combining the personalization of custom-made products with the low unit cost of mass production, MTO manufacturers can meet the needs of a lot or market size of one more efficiently.

Instead of making every product from scratch to meet an individual order, an MTO manufacturer who embraces mass customization will blend standard and customized components in the production processes; or use assemble-to-order (ATO) techniques to build customized products from a range of standard, modular components. This flexibility allows the creation of a semi-customized final product that is personalized to the buyer's requirements, but can be produced more quickly and at less cost.

Drivers for success

Mass customization inevitably puts pressure on supply chains as manufacturers try to offer enough permutations of each product—without holding too much inventory and tying up capital in stock. Manufacturers must also ensure efficient scheduling of the machines, and optimize the use of raw materials and other resources needed at different stages of the production process, so that they can react promptly to customer requests and meet anticipated delivery dates.

This is where a manufacturing-specific enterprise resource planning (ERP) system can help, by providing real-time visibility of the data that's generated throughout the production process. By analyzing this data, you can gain actionable intelligence about, for example:

  • The precise stages of the production cycle at which inventory must be held ready for use
  • The best way to group orders so that similar products go into production simultaneously, for more efficient use of machines and raw materials

With this level of insight, you can respond more readily and cost-effectively to customer demand. And with more accurate forecasts to hand, inventory and machine throughput can be optimized, helping you to reduce the amount of cash tied up in stock, avoid lost production time, and maximize margins.

Discover more

To learn how the 'Amazon effect' is changing the world of MTO manufacturing, click through to the next blog in this series.

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