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.
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