|
Mass
Customization is the evolution of manufacturing from producing
for the market of many to producing for the market of one. As
customers demand more individualization of what they consume,
businesses must adjust to meet this new demand. The challenge
companies are facing is to figure out how to make money by
satisfying customers who want an individualized product
quickly and cheaply. For some, its akin to some sort of horror
movie entitled, Job Shop meets Wal-Mart.
Consequently,
mass customization is receiving a lot of attention from
software solution providers these days. Unlike the rules-based
ERP solutions prevalent in many companies that have as their
basis both GAAP-driven accounting rules and MRP-driven
materials planning definitions, mass customization requires
much more flexibility. Flexibility in the form of
process-centered formats to incorporate web- based IT tools
aimed, in many cases, at fixing costly deficiencies often
found in the MRP based ERP systems.
The fundamentals of
mass customization software are excellent. Its objective is to
create a dynamic capability in an organization to meet
changing customer demands. Unlike a rigid automation system
like rules-based ERP, mass customization software strives to
create context-driven flow paths. Context-driven means
adaptable to both customer ordering variation as well as
adjustments caused by changes in output of upstream
processes.
However, we provide a caution. We believe
every software solution has a fundamental weakness. That is,
for it to be effective, it can’t be a “Software Solution”.
Its biggest hurdle, as with any point application or
initiative, is the lack of a well defined business case. Even
the initial Balanced Scorecard developed by Kaplan and Norton
was deficient in developing a connection to why you were doing
what it was you were doing.
Many companies have found
that a preponderance of measures doesn’t make up for the
absence of a consistent, relevant focus on a clearly
articulated, expected outcome. The ability to “see” a
future for the business and to describe it with specific
targets in mind is the starting point for the creation of
activities and initiatives that get you to that future
everyone envisioned. Before IT, Lean, or Six Sigma initiatives
are undertaken, a bottom line focused future destination
“business case” must be articulated and communicated. The
second generation Balanced Scorecard helped some by connecting
strategy to initiatives. The third generation adds another
layer, the specific targets that quantify the future
destination.
Interestingly, two universal
characteristics of successful Lean and Six Sigma initiatives
give us a clue about the value of creating a clear business
case. There were positive effects to the bottom-line when
everyone understood the processes and could transfer the
knowledge in a focused, comprehensive way throughout the
organization.
As rapid Build-to-Order specialists, we
encourage the creation of a business case for integrated
supply chains. We use all the tools mentioned: context-driven
firm planning/Master Scheduling IT tools to support the
sequenced relationship between customer and suppliers; the
third generation Balanced Scorecard to focus the organization
to specifically articulate the “why” as well as the “how”;
synchronized and sequenced process initiatives to streamline
the organizational processes (not just manufacturing); and
systematic continuous improvement focus using bottleneck
management to drive costs out of the processes on a lasting
basis.
That said, our message is this: An integrated
supply chain is a strategic decision to focus an
organization’s day-to-day operations on meeting
individualized customer demand quickly, cheaply, and
sustainably. As rapid build-to-order becomes more
prevalent in every industry as an effective way to lower costs
and speed response to customers in the market of one, an
integrated supply chain will mean survival to many of you.
|
