Mass Customisation Strategies

Lean and Agile Strategies

Generic Operations Strategies
Number of specific ways of attaining competitive advantage have been developed mainly in
manufacturing that have become generic/applied across an industry sector or number of industry
sectors
o Mass customisation
o Lean production
o Agile manufacturing

Link between generic strategies and order
winners
Mass customisation delivers
flexibility, cost and dependability
Lean enables quality, cost and
dependability to be combined
Agile delivers speed, cost and
dependability

Mass Customisation
Low cost manufacture of goods that are customised for individual customers so that the output comprises
a very large variety of products
Applies to B2C markets
Only products and processes for making them are mass customized (because customer processing has
always been customized to a greater or lesser extent due to simultaneity, intangibility and heterogeneity)
Seven Success Factors of Mass Customisation Systems:
1. existence of customer demand for variety and customization
2. appropriate market conditions
3. readiness of the value chain
4. willingness and readiness of suppliers, distributors, and retailers to attend the systems demand
5. availability of technology
6. customizable products
7. shared knowledge
Advantages of Mass Customization
o increased customer satisfaction
o increased market share
o increased customer knowledge
o reduced order response time



Lean Manufacturing
o Strategy orientated towards achieving the shortest possible cycle time by eliminating waste. Removes
waste and incidental work and decreasing the time between a customer order and shipment.
o Five Lean Principles:
1. Specify value from the customers perspective
a. Value is determined by the customer, what the customer is willing to pay for, product
features, quality, delivery reliability
2. Identify all the steps to deliver the value (value stream)
3. Create flow without interruption
a. transport, inventory, motion, waiting, overproduction, over-processing, defects, not
maximising skill of employees
4. Only make what is pulled by the customer
a. Means made to order not to stock
b. Production based on actual demand
c. Reduces order fulfilment lead time
d. Improves on-time delivery
e. Control and reduce inventory
f. Reduce storage space required for inventory
5. Strive for perfection
a. Use quality management tools to eliminate defects
Disadvantages of Mass Customization
Increased material cost
Components need to be designed to be modular,
and extensive range may add to inventory costs
and potential wastage
Increased Manufacturing Cost customization
leads to down time
b. Pareto Analysis
c. Statistical Process Controls
d. Six Sigma quality systems
o Customer drivers cost, quality, delivery reliability
o Typical products commodities
o Product variety low
o Product life cycle long
o Demand predicable
o Achieving Lean Production
o Workplace organisation (5S)
o Single piece flow (Takt time)
o Pull planning (Kanban)
o Load levelling (Heijunka)
o Cellular layout
o JIT manufacturing
o Quick changeover production
(SMED)
o Total Productive Maintenance
(TPM)
o Jidoka (automatic line
stopping)

Workplace Organization
5 Step Process
1. Sort (Seiri) Clearing up
2. Set (Seiton) Organization
3. Shine (Seiso) Cleaning
4. Standardising (Seiketsu) Make the norm
5. Sustain (Shitsuke) Continuous Improvement

Kanban
Kan means visual and ban means
card
Signals the need to deliver more
parts and an identical/similar card
signals the need to produce more
parts

Levelling the load (Heijunka)
Levelling of production by both
volume and product mix
Takes total volume of orders over a
period and levels jobs out so the
same amount and mix are being made each day.

Quick Changeovers
Single Minute Exchange of Die (SMED)
Series of techniques developed by Shigeo Shingo that target changeovers of production equipment,
fixtures, or processes in less than 10 minutes
Goal is always 0 changeover time so they do not interrupt any one-piece flow
eg. Formula 1 pit stops



Agile Manufacturing
The ability to thrive and prosper in an
environment of constant and unpredictable
change
Agile vs. Lean
o customer responsiveness
o mastering market turbulence
o requires specific capabilities
Pull planning:
o lean thinking
Methods
o design for postponement
o promote flow of information with customers and suppliers (agile supply and enabling
technology)
o develop collaborative relationship with suppliers (agile supply)
o build inventory buffers of key inexpensive sub-assemblies or components
Postponement: split into 3 types
o Form
- product is retained neutral/non-committed state as long as possible
o Time
- delaying the forward movement of goods/services until customer orders have been
received (iTunes/online books)
o Place
- positioning of inventories
downstream in centralized
distribution warehoused
(books - Amazon.com)
Lean Supply vs. Agile Supply
o Agile supply develop capabilities for
dealing with shrinking time windows
for order customer fulfilment
o Information distribution to provide
rapid and timely response to demand
o Supply chain governance that allows for
decentralised actions with central
support and co-ordination
Enabling Technologies
o EDI (Electronic Data Exchange)
o EPOS (Electronic Point of Sales)
o RFID (Radio Frequency
Identification Devices)
Radio Frequency Identification (RFID)
o Creates intelligent shelves,
reducing theft by informing store
of items removed
o Informs retailer and manufacturer
of location of the item
o Tracks product throughout factory and
supply chain
o Information compresses time windows
to support Agile supply chains

Lean Enterprises
Banks, police, IBM
Trying to go lean are health services and
Prison/Jury services