Mass Customization: Letting Customers Have it Their Way, Right Away

By BARB SCHMITZ | Published: JAN 16, 2012

Product development organizations answer to a new boss these days: the customer. With an ever-expanding variety of product choices from which to choose, customers are now dictating the direction of products in nearly every market more than ever before, rendering the concept of “mass market” in nearly every product category somewhat meaningless.

As a result, manufacturers are scrambling for ways to innovate and produce products that fulfill increasingly finicky customers’ demands as quickly as possible, but without adding additional costs to the process. After all, customers want what they want, but they don’t necessarily want to pay more for it.

So where does this leave manufacturers today who are facing increasingly stiff global competition and tighter-than-ever profit margins? Thanks to advances in manufacturing processes, information technology, communication, and product design, manufacturers can now transition to mass customization to better respond to existing customer demands and serve the needs of smaller niche markets.

Mass customization at its core is as much a business practice as a technology practice and, as such, requires manufacturers to think differently; be more market-driven and customer-responsive. Thanks to the Internet, manufacturers now have a great mechanism through which to communicate with customers—and vice versa—to garner interest in new products or determine which ones aren’t meeting expectations.

By definition, mass customization is the ability to design and manufacture tailored to meet customers’ needs at mass production costs and speed. Sounds great, but challenges abound. In order to deploy mass customization efficiently, organizations must keep costs low to match those of standardized products; achieve high quality and high variety in products; and produce these products quickly in order to respond to rapidly evolving markets.

Several key industry trends, such as modularization of products, design configurability, and more flexible automation in manufacturing processes, provide organizations with the ability to build a large variety of end products at costs comparable to mass-produced products. Let’s take a look at each of these trends to understand their impact in the deployment of mass customization.

Modularity. Developing product families around a modular product architecture greatly enhances an organization’s ability to transition to mass customization. This requires the creation of a product platform, a set of subsystems and interfaces that form a common structure from which a family of related products can be developed and produced efficiently. Standardization and flexibility—achieved through the modularization of products, processes, and the supply chain—all play an important role in mass customization initiatives.

Product configuration software. These play a vital role in facilitating manufacturers’ efforts to transition from mass production to mass customization. Product configurators are software tools that enable customers to order exactly what they need or want based on allowable choices and is typically deployed through the Internet or Extranet. A configurator allows the convergence on a valid configuration within the product line’s capabilities, precisely summarizes the customization, and becomes the source of information transmitted to the order entry system and ultimately to the factory.

Parametric design tools. Parametric modeling technology is another important enabler to mass customization. Parametric modeling tools enable users to create flexible product models that are easily modified geometrically. These engineering changes can be linked to analysis software, such as FEA and CFD, allowing designers explore design variations and perform ‘what if’ iterations to see the effects of slight design variations and determine if failure occurs.

Flexible automation. In the same way that design tools now facilitate more flexibility in product design, virtual factory design software tools are now being used to design more flexible production processes. Also, simulation and analysis tools can be used to optimize these processes. More responsive manufacturing systems can be quickly reconfigured to allow flexibility not only in producing new products but also in changing the system itself. Such systems require the use of sophisticated automation systems that are flexible, extensible and re-usable.

Supply chain management. Perhaps one of the biggest hurdles to deploying mass customization is the lack of flexibility and responsiveness of the supply chain. Simplify the supply chain to reduce the variety of parts and raw materials so materials can be procured spontaneously by automatic and pull-based resupply techniques. Reducing the part and material variety can also help shrink the vendor base, further simplifying the supply chain.

Feds Raid Gibson Guitar amid Allegations of Illegal Rare-Wood Exports

By SCOTT MCCARLEY | Published: NOVEMBER 14, 2011

Gibson Guitar is best known for the legendary Les Paul guitars and the musicians who play them, including Jimmy Paige, B.B. King, Slash and Paul McCartney. But lately, Gibson’s been feeling the heat from the Feds after being raided on allegations of illegally importing ebony from India and failure to comply with the Lacey Act. This is the second time in two years that Gibson factories have been raided for non-compliance with this regulation.

The Lacey Act bans the import of illegally harvested wildlife and plants. It requires companies to make detailed disclosures about wood imports and forbids the purchase of goods exported in violation of a foreign country’s laws. And, as with other regulations, the price of non-compliance is high. Henry Juszkiewicz, CEO of Gibson, told the Wall Street Journal that the government raids over alleged violations of the Lacey Act have cost Gibson roughly $1 million in seized products and production disruptions alone.

The story has many interesting facets and demonstrates the risks manufacturers face from evolving compliance regulations and the complexities involved with a global supply chain.

The Lacey Act requires Gibson and others like it to track every species of wood used in all components of its guitars. It’s not enough to know that the guitar has spruce and maple in it. It’s also necessary to know what the bridge is made of, for instance. Records must show where wood is harvested and where components are made.

Numerous other regulations—such as REACH, RoHS, CA Proposition 65 and even the new Conflict Minerals law—require manufacturers to collect the same type of information for all components, whether it is to ensure that products don’t contain hazardous levels of toxic substances or to prevent use of minerals mined in areas of armed conflict and human rights abuses.

On the surface, collecting this information may seem daunting, though it need not be.

Today’s PLM (product lifecycle management) solutions and associated technologies enable manufacturers to automate the collection of product data from the supply chain and then report against multiple compliance requirements.

It’s good business for manufacturers to know exactly what’s in their products and where it came from. The value of this data goes far beyond compliance. For example, only when armed with this information can manufactures properly mitigate the risk of supply-chain disruptions and forecast cost changes based on fluctuations in the price of rare materials.

A robust PLM system with an exhaustive audit trail for each product component— showing who made it, what it is made of, and where it was made—can provide the due diligence necessary to prove compliance, and help identify and resolve potential compliance issues before they become costly problems.

Gibson continues to make headlines as the company responds to the allegations and the government presses on with a criminal investigation. Gibson contends it has not violated the Lacey Act.

Juszkiewicz defends Gibson in a Huffington post editorial. “The recent raid of Gibson, however, did not come about because the wood was illegally harvested. Rather, the U.S. government alleges that the wood was imported in violation of an Indian export restriction designed to keep wood finishing work in India. To make matters worse, although the Indian government certified that the wood was properly and legally exported under this law, the U.S. Fish and Wildlife Service substituted its own opinion and reinterpreted Indian law.”

Scott Paul, a Greenpeace official in New York responsible for forestry issues, sums up Gibson’s positive environmental efforts and the complexity of compliance in a Wall Street Journal article, pointing out that Gibson has done “great work” to promote better forestry practices. The question, he said, goes to whether Gibson did everything possible to avoid buying wood from dubious sources.

Is Your Global Supply Chain A Disaster Waiting to Happen?

By KANDACE PROUD | Published: OCTOBER 19, 2011

Mother Nature has been tough on us this year. The recent floods in Thailand are just another example of how she can wreak havoc. With the flood waters in the Nava Nakorn Industrial zone currently at two meters, 250 factories—including Western Digital, Toshiba, Nestle, Toyota, Seiko and Casio, as well as many others—have suspended operations.

In today’s age of global supply chains, when disaster strikes, it’s not just local companies that are impacted.

Knowledge & Skills: These disasters are felt on a local and global scale. In Japan, 15,824 people died in the earthquake and tsunami earlier this year—more than five times the casualties of September 11th. How many of the victims were product or service experts or skilled workers? How many workers fled the country? In addition to the devastation of lost life and property, years of knowledge and expertise may also have been lost.

Competition: As the hard disk drive (HDD) industry (which supplies PC makers) recovers from the earthquake in Japan, it’s facing new floods in Thailand. The rising waters are creating havoc for Western Digital Corp and Seagate, the two largest providers of HDD’s. Sixty percent of Western’s drives come from Thailand and this isn’t the only factor hitting the HDD market. With the current shortage smack in the middle of the upcoming holiday season and rising prices, this could provide an even bigger window for competitors—think Apple—to gain an advantage.

Manufacturing: In March, US auto manufacturers started to run out of parts made in Japan. The disasters in Japan are forcing the auto industry to re-evaluate. Suzuki Motor Corporation has decided to spend serious money to relocate facilities away from earthquake and tsunami zones as well as nuclear power plants.

With global manufacturing comes the heightened risk of disruption. Companies need to think about how much stock they should have on-hand and whether multiple vendors can supply the same part in case one supplier is suddenly shut down. Do we need to reevaluate just-in-time delivery?

Product Quality: Disruptions can cause all types of repercussions. When supply is limited, prices increase, products are not in stock and your customers look to the competition.

Product quality may suffer as companies scramble to get orders out the door after a disaster. Poor product quality could tarnish your brand for years to come.

In global sourcing, flexibility and planning is becoming much more important. Is your company ready for the next curveball?