Transcript Differentiation of Products

Differentiation of Products
And The Mass Customisation
Traditional business model
Built-to-replenish
Monopolize
Built-to-forecast
Business always try not to customise if they have a choice
"In the clothing industry, about half of all
products are sold at a huge discount or
shredded because they were
manufactured in a size or color that
nobody wanted,"
David Anderson, management consultant for Cost & Customization Consulting
Motivation
Customer relationship building, to win over
the one-size-fit-all, low price products
Experience Economy, to make buying an
creative, enjoyable experience
Optimisation of marginal utility
Customisation
Customisation VS small-batch production
eg. Swatch, Benetton, Book-on-demand
Mass-customisation features
Built-to-order (BTO)
Customers have to wait
One-of-a-kind
Customisation VS personalisation
Is engraving names on ball-pen masscustomisation?
Mass-customizing an objects usually affect
its function
Customisation VS modularisation
Is IKEA cabinets and LEGO masscustomisation?
Post-production customisation
Design as variants
One-of-a-kind
Enhanced buying experience
Customisation VS Custom-made
Is cupboard from street-corner shop masscustomisation?
Predefined design variant
(On-line) variant building interface
Operator intervention free manufacturing,
or
Reduce operator intervention by process
standardisation
Near mass-production speed
In the electronics industry alone, sales of
custom-manufactured goods will grow
from $60 billion in 1998 to $150 billion
in 2003, according to Technology
Forecasters Inc.
For manufacturers in most industries,
AMR's Burkett said, customization isn't "a
question of if, but when."
Mass Customisation
Mass-customisation
Customisation
Interface
Variational
Product Structure
Flexible
Manufacturing
User input
(Optional)
Advanced
Logistics
Major application
It reduces material stock and dead-stock
Personal computers (Dell)
It makes a more manageable product-line
Heavy machineries
Automobile (Ford)
New buying experience
Apparel
Toys
Mega Tech approach
 Agile production
 Flexible
Manufacturing Cell
(FMS)
 High-speed
machining
 Robots
Process improvement approach
 Product Data
Management (PDM)
 Enterprise Resources
Planning (ERP)
 eg. DELL
My Twinn
Customers send in
pictures of the child
Choose from
7 skin tones ranging
from porcelain to black
brown
15 hair and eyebrow
colors
4 eyelash colors
26 eye colors
IMX Mixing Station
Customer configure
the colour and scent
of lip gloss using a
console interface
Machine whip up a
batch of custom
gloss on the fly
www.designinteract.
com/features/
NIKE id
 Web customers select the color
and size of the footwear they
want to buy
 Place a message of up to eight
characters on the back
 The Web-based configuration
system transmits the design to
manufacturing systems at Nike
factories in Asia, where the
shoes are made
 The shoes are sent directly to
the consumer in two to three
weeks.
Small batch approach
Layered Manufacturing
Rapid Tooling
Chaos stir-up by mass customisation
 I want this radius increase by 5mm, make all
necessary change to make it look as good as
before
 The motor is changed from Brand A to Brand B,
change all necessary parts so that the product
still work, and remind sales department that the
product is now cheaper by $0.5
 Tell me how much more time is need if the
customer increase the order from 100,000 to
1,000,000 and what price should I charge, NOW
Comment by NIKE id
 The service works through an amalgamation of
homegrown and off- the-shelf software that includes
online customer relationship management tools, a
Web-based configurator and software that translates
the dynamic HTML data into a format that can be
processed by the legacy manufacturing systems
operated by Nike's manufacturing partners in Korea and
Taiwan.
 "The configuration tools and other systems out there are
pretty robust, but they don't typically operate at this level
of detail," said Allen, who declined to reveal the software
vendors involved in the project. "There was a lot of
integration work."
Product data chain
Drawbacks to aware
Users not always know how to articulate
what they want (NikeID has to check for
bad IDs)
Too many options will:
Make the configuration process time consuming
Complicate the consumer interface
Make error checking on spec. changes difficult
Very demanding on logistics
Maintenance headache