Introduction
Mass customization is modifying and making products available on the market to fit a specific customer’s requirements. It refers to a marketing and manufacturing strategy that combines the adaptability and individualization of products created to order with the lower per-item costs typical of mass production. Mass customization can be referred to as made-to-order customization or built-to-order customization. The article, Mass Customization at Hewlett-Packard: The Power of Postponement, will serve as the primary subject of this presentation, and its key concepts and ideas will be discussed in detail.
Reason for Mass-Customization
Customers seek products tailored to their needs based on the environment they plan to utilize. Without tailor-made items, it is difficult for organizations that make generic products used by consumers in various industries, such as hospitals, banks, security businesses, airports, and schools, to meet their clients’ needs. As a result, many companies prioritize the need to tailor their products to retain and expand their customer base and sales revenue. However, Fitzinger and Lee (1997) warn of the ramifications of mass customization without an adequate plan, which has caused numerous companies’ production costs to spiral out of control. In order to avoid incurring losses during the process, the business should consider sustainable customization.
Mass customization allows businesses to rethink their offerings to ensure that customers derive the most significant possible benefit from utilizing those offerings. It enables the company to review its product line and adopt an efficient distribution network. When this is done, the company can run at maximum efficiency while satisfying the customers’ expectations with the fewest possible supplies (Render et al., 2020). Firms should therefore put off the process of differentiating products while catering to a particular customer until the last possible stage of the distribution chain.
Concepts and Ideas Discussed in the Article
Hewlett-Packard (HP) is an American multinational corporation that has been in business for over three decades and specializes in developing computers and other computer-related goods. According to Feitzinger and Lee’s (1997) suggestion in the article, the company has successfully made an impression on the market by developing products that are useful to all its customers in various ways. The current status that it enjoys in the market is highlighted in these articles. They emphasize three critical concepts in mass customization embraced by HP, which have propelled it to its current status in the industry.
The fundamental notion behind these concepts is that the items produced should be composed of various components that are simple to put together. The manufacturing process should be composed of individual components, each of which may be arranged and moved to support the many distribution networks that the company may choose to use. They highlight the necessity of positioning the company’s inventory in crucial places that enhance the product supply’s flexibility and cost-effectiveness, further highlighting the fact that this must be done.
As a direct consequence, HP has adopted three fundamental concepts that have contributed significantly to the company’s success in the market: Modular Product Design (MPD), Modular Process Design (MPD), and Agile Supply Networks. The approaches to mass customization mentioned above maximize customer satisfaction while minimizing overall production expenses. The idea enables the development of high-quality goods that customers value since they are tailored to meet the specific requirements of individual customers (Render et al., 2020). On the other hand, the company gains when it makes the most of its available resources to enhance its output while simultaneously keeping its production costs low.
Modular Product Design
Creating an idea that an organization can use to create a complete product by combining or merging small, independent elements necessitates using modular design as an intrinsic component. A modular design has assisted the planning process by allowing for increased renewability, task management, and troubleshooting (Render et al., 2020). It has numerous advantages, including adaptability, reduced production time, and consistency throughout the project’s lifetime. The modular product’s components all adhere to a standard interface, allowing the elements to be combined to form the finished product (Render et al., 2020). Non-modular designs, however, are more challenging to customize and maintain due to their inability to be broken down into individual components.
When products are modularized, they can take the form of interchangeable modules that an organization can quickly modify to fit the specific requirements of individual customers. Render et al. (2020) highlights the significance of modularization as an essential part of the customization process since it shortens the total amount of time spent on the production process. Modularization allows the business to better cater to the needs of those customers. According to the order, multiple components are assembled to create completed goods that are suitable and beneficial for the customer’s intended purpose. As a direct result of this, mass production of the product can occur while focusing on a specific target market.
As a result of HP’s use of modularization, the company has been able to reduce its production costs. It can now access a more significant portion of the worldwide market due to the modularization and standardization of its goods. According to Feitzinger and Lee (1997), adopting this technique resulted in a reduction of 25 percent in the total expenses associated with manufacturing, shipping, and inventory management. They further advise that using modular elements to sustain mass customization may increase the cost of raw materials. Therefore, businesses ought to carefully evaluate whether the benefits of standardization outweigh the added costs to determine whether or not to implement standardization.
Modular Process Design
Modular process design and fabrication is a distinct method of creating process structures. Feitzinger and Lee’s article states that the approach entails breaking the manufacturing process into discrete sub-processes (1997). Typically, this means engineering the systems to be movable skids. These skids are self-contained components that can be combined or changed in various configurations to contribute to or develop whole operations. This approach is built on three fundamental components: process postponement, process resequencing, and process optimization. It provides corporate organizations with the flexibility that effective mass customization necessitates.
The concept is critical for any company that wishes to maximize productivity and revenue while keeping manufacturing costs low. According to Render et al. (2020), one of the benefits of adopting this paradigm is the implementation of mass customization. While restructuring the production process within the organization to achieve lean design, management can incorporate a design structure that will permit customization of the final product based on the intended market. Render et al. (2020) argue that the firm should embrace automation during the process to improve customization. As a result, the company will have satisfied customers at a lower production cost.
Process postponement is a critical component of the modular process design that organizations seeking to maximize profits while decreasing production costs should adopt. According to the article by Feitzinger and Lee, (1997) the technique provides clients with an infinite number of consistent options while simultaneously minimizing inventory and satisfying customer demand. According to Render et al., the concept of postponement is to postpone the change in shape, identity, and location until customer commitments are met (2020). It is done by capitalizing on the similarities shared by many items and structuring the steps of manufacture and distribution so that the point of distinction is postponed.
When business entities implement process postponement, they can make the most of the resources available to them since they only concentrate on the products that the consumer needs at that given time. The procedure improves customization since it focuses on the customers’ particular requirements and makes every effort to fulfill those requirements whenever they crop up (Render et al., 2020). Consequently, the company does not create products for which there is no immediate need. Doing so would result in dead stock being stored in warehouses while the company waits for the demand for the product to increase.
Agile Supply Networks
In its most fundamental sense, the term “agile supply chain” relates to the use of response, proficiency, adaptability, and speed to manage how effectively a supply chain unit functions daily. When making decisions about day-to-day operations, agile supply chains rely on real-time and forecasted data for use in supply projections. According to Render and colleagues’ findings, a company can have the potential to keep its operating costs under control when it implements agile supply (2020). The idea of agile supply calls for many checkpoints and feedback loops to be set up so that the product’s progress can be monitored from the beginning of the manufacturing process until it is delivered to the end user.
Businesses want flexible supply networks to maximize revenue while maintaining low production costs. Feitzinger and Lee argue that determining the optimal number of factories and distribution centers and where to locate them is a difficult choice that corporate groups should make (1997). Render et al. (2020) emphasize balancing the time required to respond to a customer’s order request, the marketing cost incurred, and local content requirements and duties. Additionally, organizations should consider the time and expense of transit, the cost of local labor and occupancy, and the cost of duplicating fixed assets.
Due to unanticipated disruptions in continuity, firms face many supply chain difficulties. The challenges include, among others, the capacity to adjust to changes in demand variability, the improvement of services, the reduction of incoming costs, and the improvement of on-time delivery. Businesses must adjust to the ever-increasing unpredictability of demand and prioritize long-term profitability (Render et al., 2020). It is essential for developing and keeping a competitive edge by responding quickly to market and consumer demand shifts. Consequently, firms will need to reevaluate how they organize their supply chains in order to address the issue of adaptability and preserve a competitive advantage in the global market, which is highly competitive.
Relevance of the Article to Business Practices of the Present Day
Even though Feitzinger and Lee wrote the article over twenty years ago, the research is still relevant. It offers practical suggestions to corporate organizations that wish to optimize their profits while maintaining low production costs. The article focuses on the fundamental principles and ideals Hewlett-Packard has adhered to over the years, contributing to the company’s rise to prominence as a producer of computers, computer components, and accessories producer. It has achieved mastery of the art of mass customization and has expanded its consumer base by conquering all regions of the world.
Businesses wanting to expand their consumer base should compare themselves to HP using the information provided in the article as a benchmark. The article emphasizes several important ideas and concepts regarding mass customization, including the requirement for modular product designs, modular process designs, and the utilization of agile supply networks. It emphasizes the necessity of delaying the process while simultaneously capitalizing on the market and addressing the current requirements of consumers. As a result of the predictability of consumer behavior, the information presented in the article applies to the present day and will continue to be applicable for many years to come.
Conclusion
Any company or organization in the business world that aspires to be successful and continue to be competitive in the global market should understand and implement the notion of mass customization. It is a concept that has been put into action for many years and has proved that if it is well utilized, it can contribute to a company’s success. As a consequence of this, businesses should perform a study on numerous ways in which they can improve the process, in addition to the three ideas that have been presented above.
References
Feitzinger, E., & Lee, H. L. (1997). Mass customization at Hewlett-Packard: the power of postponement. Harvard business review, 75, 116-123. Web.
Render, B., Heizer, J., & Munson, C. (2020). Principles of Operations Management (11th ed.). Pearson.