Working on the supply chain gang
By Janice Kleinschmidt
According to Donal Reddington, founder of MadeForOne.com, lead time is the “crucial customer variant” for mass customization.
“[A] customer is willing to pay 10 to 15 percent more for a mass-customized product over a standard product,” he says. “However, a customer is definitely not willing to wait longer for that product. For business-to-business transactions, there will almost always be some lead time, so an efficient supply chain can facilitate delivery of customized products within the same time frame as that for standard products, with the potential for higher revenues.
“In a mass-customization environment, it is not practical to keep finished product inventory in reserve, as the potential combinations of attributes that will be in demand cannot be fully predicted. Therefore, it follows that the enterprise should be in a position to promptly fulfill any order it receives and, so as to do this, it should ensure that component inventories do not fall below levels that create a risk of orders being delayed.
“It may seem unusual in an era of globalized trade, but some research suggests that, for mass customizers, it may be more favorable to use suppliers that are located geographically close to the mass customizer’s own facility.
“A well-designed mass-customization system will use ‘component modularity.’ This means that a small number of component product can be used in many combinations to satisfy individual customer demands, like the way that just 26 letters of the alphabet can be combined to make thousands of words.”
