Manufacturing for an audience of one

6 min read

Mass customisation means some serious rethinking of everything from the design of your products and production floor, to the scale and nature of the supporting IT – at every level of the extended enterprise. Dom Pancucci explains

At first glance it sounds contradictory, but ‘mass customisation’ is now a key aspiration for a growing number of manufacturers. It represents an almost complete inversion of the mass production ideas of Henry Ford – which radicalised both the substance and style of manufacturing early in the 20th century, with notions of standardisation and assembly lines. Mass customisation theoretically means making products en masse but configured specifically for each individual – and it requires that the entire manufacturing base be transformed. In fact, any company engaged in lean and/or agile manufacturing initiatives could reach the goal of mass customisation, although these practices do not lead to individualised products alone. So without stretching the concept or context too far, it can also be described as a way of developing production processes to address niche markets and the specialised needs of particular customer groups. Making bespoke products out of commodities can also be included, through slight changes to a recipe or variation in packaging. In fact, three dimensions to mass customisation are defined by the Cheshire Henbury consulting firm, taking this concept beyond a mere focus on production issues. These are: customised marketing, customised services and customised products. They’re placed vertically within a grid against another axis – showing options which range from standard products and services through to full customisation. And significantly, Cheshire Henbury stresses the importance of a strategy to back up mass customisation, while also pointing out that not everything can or should be customised. Either way, the grid shows how to place products and services within an overall approach based on manufacturing agility. Strategy is key In all these contexts, having a clearly defined strategy is the real key to success. “To apply mass customisation techniques without first determining strategy may lead to missed opportunities and sub-optimal returns,” says the firm’s Paul Kidd. “Ultimately this course of action may also leave firms vulnerable to the actions of more astute, strategically driven competitors.” Another interesting take on mass customisation can be gained from the website of consultancy, SM Thacker and Associates. Here the approach is described as “achieving an individual customer product from standard components”. Mass customisation in a manufacturing context can be defined in three forms, according to the consultancy. These are pre-sales configured products, post-sales configured products and circumstances where the customisation is postponed and is enacted by a third party. Pre-sales configuration is where a company works closely with the customer to define a specification prior to manufacturing. In the case of post-sales configured products, the customer can choose accessories and product options after receiving delivery. Examples here could be attachments for a vacuum cleaner, or the precise form of software purchased. Postponement takes in the addition of logos, particular branding requirements and food packaging. Giroflex, the office chair manufacturer based in South Wales, has embraced the concept and practice of mass customisation wholesale, following a radical transformation. Back-end integration is vital to success, according to Ewan Tozer, its technical director, yet he sees this as merely the foundation – the rest is about dealing with a great deal more complexity and sophistication. All Giroflex products are effectively custom, so the manufacturer faces a billing and order stocking situation covering millions of possible permutations. Tozer stresses the need for a company-wide strategy to deal with this, in Giroflex’s case starting with outsourcing all its non-specialist manufacturing activities. The firm now only produces the foam and upholstery elements, getting suppliers to handle all other fabrication, such as chair casters and bases. To pull this together, Tozer swears first by a modular system design, making it easy to cater for high levels of change. Another key is tighter control over what Tozer calls “complex physical processes” – basically ensuring that the supply chain is attuned to the Giroflex replenishment frequency. “When you are looking at a ‘make-to-order’ situation an efficient factory based on JIT (just in time) is essential. Our work in progress (WIP) batches represent an hour’s worth of finished goods – all customer specific, with high levels of variety from order processing right through to shipping.” A natural for advanced planning and scheduling (APS) you might think, but no, Giroflex rejected the approach. It’s not that Tozer doesn’t rate APS: he accepts its useful where one or more bottlenecks can hold up an entire facility, and where lead times are such that late orders are difficult to handle conventionally, or where ATP (available to promise) is otherwise difficult to get. But Giroflex runs with no sales forecasts, sorting everything on lead times only. And to make this work, Tozer says it’s more valuable and practical to ensure simply that most supplier’s are local. “APS is overkill for us,” he says. “Giroflex has no master scheduling and we only perform rough cut planning alongside real-time MRP, with 10 people working on this task in a flexible manner.” Web-based configurator And that’s almost enough for this company’s mass customisation, apart that is from its prime enabler – its web-based product configuration software, deployed in conjunction with the company’s Fourth Shift (now AremisSoft) ERP system. Says Tozer: “The configurator is at the heart of our IT solution to support mass customisation and we have enjoyed great success with it. This software supports both our production side and activity-based costing and also works as a knowledge base – even including shop floor documentation – as well as handling all external communications.” And it works at the front end too: “The configured information is provided in user friendly terms and not just based on product codes.” Through this root and branch approach to mass customisation Giroflex reckons it’s improved profitability, market share and customer service, kept inventory low, achieved faster and more reliable deliveries and shortened lead times by at least 25% over conventional methods. And all the result of a £500,000 investment in its total project. Volvo Cars is another example of mass customisation in action. The company recently introduced a web-based supply chain system from enterprise software vendor JD Edwards to enhance collaboration between it and its 350-strong supplier base – reducing the order processing timeframe to one week. The outcome – a service providing customised cars covering everything from order taking, to planning, production and delivery on the eighth day after the customer signs off the custom specification. Orders are passed to Volvo via local dealerships. By accessing the Volvo website, customers can configure their cars based on three base models and around 1 million potential combinations. Thereafter, the system is geared to making its mass customisation promise work profitably. One key element is ensuring that inventory and transportation costs are minimised – and Volvo does this in part only by making stocks available to production (with the requirements reflected all the way up the supply chain) according to a particular day’s build list. Another is harnessing the system’s management visualisation tool, which allows exceptions and failures in the plan to be spotted fast, so that the company can quickly deal with, for example, components or assemblies delayed from suppliers for whatever reason, re-planning production accordingly. Think very modular JD Edwards’ own recommendations are all-embracing: Joel Reed, director of product marketing, says if you’re serious about mass customisation you have to include modular product design and attend to the key areas of adopting lean principles, with appropriate shop floor redesign and the necessary process changes in the supplier base. On the IT side that means implementing top class product configuration software, alongside kanbans and modern ERP and supply chain software focused on lean manufacturing and make-to-order manufacturing. Reed sees some companies going down this route, particularly in the high tech and electronics sectors, but indicates that most have focused only on lean manufacturing, less the design side. Some mass customisation efficiency can be gained this way, he says, but it’s insufficient to deliver best benefit. “To be truly successful the manufacturing area must be totally reconfigured. [But] the big step is taken when it synchs up with other complete redesign schedules,” he says. He accepts that the costs and time scales involved will be significant, and recommends a staged approach. In terms of the management, planning and cultural issues, Reed observes that new flexible practices just have to be observed. For example, to achieve the goal of little or no finished goods inventory, an organisation has to move people to where they are actually required, even stopping production in one area if there are no relevant orders. A skilled and cross-trained workforce is essential and genuine partnerships with suppliers must be cultivated, he opines. And if it’s done properly the benefits will indeed include increased customer satisfaction, large inventory reductions, reduced cycle and delivery times, along with reduced space and labour needs. It sounds attractive, and it’s applicable across more manufacturing sectors than you might think. David Tudor, senior principal for the industrial sector at Oracle notes that the aerospace and defence sectors are totally predicated towards mass customisation. But he points out that with globalisation and increasing demands for consumer choice putting pressure on manufacturers to increase product variability, any supplier of high value items can gain from the lessons of mass customisation, probably through APS. Even the apparel businesses, with its emphasis on colours, patterns and yarns, could get into the act, he says. Robert Gordon, UK country manager for TXT e-solutions, the fast-growing Italian ERP company now expanding across Europe and the US, points to customers like Case New Holland, the third largest maker of construction equipment in the world. With its sheer range of tractors, dump trucks and the rest, it’s harnessed the company’s APS to make its mass customisation work. There is growing APS take-up. Ultimately, Tudor insists that mass customisation means manufacturers recognising that a traditional bill of materials (BoM) and MRP are redundant – so business processes and IT systems need to cater for this, with seamless flow of information to support more sophisticated activity management throughout an extended organisation. Mass customisation is an issue that many manufacturers will need to assess in the future, based on increasing levels of customer sophistication and associated demand for greater choice. Yet it remains to be seen how many have the vision, IT and the will to transform their businesses to succeed in addressing a audience of one.