What is Mass customization?

Mass customization can be described as "enabling a customer to decide the exact specification of a product or service, and have that product or service supplied to them at a price close to that for an ordinary mass produced alternative".

The first part of this definition, the 'involvement of the customer in deciding the exact specification' means that the relationship between the vendor and the customer is different to a mass production siutation, where the vendor offers a product on a 'take it or leave it' basis. In a study entitled "Approaches to mass customization: Configurations and empirical validation", Rebecca Duray and others state that mass customization takes place when a product which is designed to meet the needs of a particular customer. Whereas increased product variety is sometimes cited to support descriptions of mass customization, here it is argued that the customer must be involved in specifying the product for true mass customization to take place.

This type of mass customization is sometimes known as 'collaborative customization', a term which was coined in a 1997 Harvard Business Review article 'The Four Faces of Mass Customization', by B. Joseph Pine and James H. Gilmore.

Collaborative customization is where the business conducts a dialogue with the individual customer to help them articulate their needs, to identify the precise offering that fulfills those needs, and to make customized products for them. This approach is appropriate for businesses whose customers cannot easily articulate what they want and grow frustrated when forced to select from a plethora of options.

This involvement of the customer in the design and production stage means that the customer becomes a 'prosumer' as described by futurologist Alvin Toffler in the 1970 book, 'Future Shock'. The prosumer is producer and consumer in concert, defining and producing the product.

The second part of the definition refers to the price, which must be 'close to that for an ordinary mass produced alternative'. This addresses the 'mass' in mass customization. This separates mass customization from the traditional 'made to order' approach, which by nature involves high cost, for example in tailored suits.

An issue relevant to achieving customization at or near mass production cost is the need to avoid creating inventories of finished stock. The use of build-to-order methods, where an item is not constructed until an order is received, is an important factor in minimising the cost of a customized product. Pine's book described an early attempt by a computer company to implement mass customization by building up inventory of servers in every possible configuration. Naturally, the company was left with a large stock of unsold product, underlining the importance of waiting for the customer to make an order before producing the item. Therefore, to avoid build up of finished stock, the producer must have in place a system that can quickly produce an item only when an order is received.

At the extreme of Collaborative customization is 'Pure customization' as described by Henry Mintzberg in 1988. This is where an enterprise supplies a product designed and produced from scratch for each individual customer. Pure customization includes the customer in the entire cycle, from design through fabrication, assembly and delivery, and it provides a highly customized product.

Gilmore and Pine also identified three other types of mass customization. The definition at the top of this article may need to be changed to reflect these other possibilities.

One of these three types is Adaptive customization, where one standard, but customisable, product is designed so that users can alter it themselves. This strategy is described as being appropriate when the customers want the product to perform in different ways on different occasions, and available technology makes it possible for them to customise the product easily on their own. It is the product itself, rather than the provider, that interacts with customers.

Therefore, to take into account the possibility of adaptive customization, the definition at the start of this article can be modified as follows:
"Mass customization is enabling a customer to decide the exact specification of a product or service at or after the time of purchase, and have that product or service supplied to them at a price close to that for an ordinary mass produced alternative".

Adaptive customization is similar to Adjustable customization described by David M. Anderson in his book "Build-to-Order & Mass Customization". This is a reversible way to customise a product, as in mechanical or electrical adjustments. In Anderson's definition, the adjustments can be set by the factory, distributor, store or customer. Adjustment may be infinitely variable, or use discrete adjustments, or configurations, such as those provided by electronic switches, jumpers, cables, or discrete software-controlled configurations.

An example of this type of customization is the adjustable office chair, which can be adjusted for one or more of the dimensions including back height, arm height, back angle, seat angle and seat height. Realistically, adaptive or adjustable customization only applies where multiple settings can be adjusted. This would rule out items which have only simple adjustments on a single dimension, e.g. a torque wrench.

The two other types of mass customization described by Pine and Gilmore sit outside the general concept of the customer being in control of the product specification. The first of these is Cosmetic customization, where a standard product is presented differently to different customers. The cosmetic approach is appropriate when customers use a product the same way and differ only in how they want it presented. Rather than being customized or customisable, the standard offering is packaged specially for each customer. For example, the product may be displayed differently, its attributes and benefits advertised in different ways, or the customer's name may be placed on each item. This type of customization is sometimes called 'personalization'.

To include this type of customization in the definition, we can say that:
"Mass customization is enabling a customer to decide the exact specification or personal attributes of a product or service, at or after the time of purchase, and have that product or service supplied to them at a price close to that for an ordinary mass produced alternative".

The second of these other customization types described by Pine and Gilmore is Transparent customization. This applies where the company provides individual customers with unique goods or services without letting them know explicitly that those products and services have been customized for them. The transparent approach is appropriate when customers' specific needs are predictable or can easily be deduced, and especially when customers do not want to state their needs repeatedly. Transparent customisers observe customers' behaviour without direct interaction and then inconspicuously customise their offerings within a standard package.

To become a transparent customiser, a business must also have a standard package into which its product's customized features or components can be placed. Transparent customization is the direct opposite of cosmetic customization, with its standard content and customized package.

If this final type of customization is to be included in the definition of mass customization, the definition would read like this:
"Mass customization is enabling a customer to decide the exact specification or personal attributes of a product or service, at or after the time of purchase, and have that product or service supplied to them at a price close to that for an ordinary mass produced alternative, or have this exact requirement supplied using the vendor's knowledge of the individual customer's needs".

It is clear, therefore, that the mass customization concept can be applied using a variety of methods, but one overwhelming characteristic is always present: the product is built to satisfy the needs of the individual customer, and the cost will be similar to the standard mass produced alternative.

References

Anderson, David M. 2002, Build-to-Order & Mass Customization, Cambria, CA USA: CIM Press

Duray, Rebecca, Ward, Peter T., Milligan, Glenn W. & Berry, William L. 2000, 'Approaches to mass customization: Configurations and empirical validation', Journal of Operations Management, Vo. 18, No. 6, pp. 605-625

Gilmore, James H. & Pine, B. Joseph II 1997, 'The four faces of mass customization', in Gilmore, James H. & Pine, B. Joseph II (eds.), Markets of One, President and Fellows of Harvard College, Boston MA, U.S.A. pp. 115-132

Mintzberg, H. 1988, 'Generic strategies: toward a comprehensive framework', in R. Lamb and P. Shrivasta,(eds.), Advances in Strategic Management. Vol 5., pp. 1-67

Toffler, Alvin 1970, Future Shock, New York, USA: Bantam Books
Pine, B. Joseph II 1993, Mass customization, The New Frontier in Business Competition, Boston, MA USA: Harvard Business School Press