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Managing Mass Customization

A decade of studying mass customization led us to identify three fundamental capabilities that determine a firm's ability to mass customize. We call them Solution Space Development, Robust Process Design, and Choice Navigation (for a detailed explanation, see: „Cracking the Code of Mass Customization“, by Fabrizio Salvador, Martin de Holan and Frank Piller. MIT Sloan Management Review, Spring 2009, pp. 70-79).

The solution space represents the choice options a company offers to its customers. Robust process design is defined as the capability to reuse or recombine existing organizational and value chain resources to fulfil differentiated customers needs. With robust process design customized solutions can be delivered with near-mass-production efficiency and reliability. Finally, the firm must be able to support customers in identifying their own problems and solutions, while minimizing complexity and burden of choice. When a customer is exposed to too many choices, the cognitive cost of evaluation can easily outweigh the increased utility of having more choices, creating the "paradox of choice": too many choices reduce customer value, instead of increasing it. Therefore, the third requirement needed to ensure successful adoption of mass customization is the organizational capability to simplify the navigation of the company's product assortment. We call that choice navigation.

The three fundamental capabilities for successful managing mass customization, as described by Salvador, de Holan and Piller

Aim of the Study

This multi-stage study compares 500 online configuration systems and customization offerings. Directed by Professors Dominik Walcher, University of Applied Sciences in Salzburg, and Frank Piller, MIT Smart Customization Group and RWTH Aachen, the objective is to provide a showcase of the state-of-the-art of mass customization (MC) and personalization in the internet. On the one hand, we want to provide a comprehensive picture of the market space of customization companies in this domain. On the other, we will look closer into choice navigation.

Collecting
We have collected information about 500 companies offering customized consumer goods. With the help of this collection we provide a broad overview of what types of MC companies and offers can be currently found online. These companies are listed alphabetically and depicted in detail in the main part of the study. We give information about location, year of going online, offered languages and many other general facts including the companies’ logos and a screenshot of the configuration process.

Classifying
As the central part of our analysis, we configured a typical product of each company. Based on these tests, choice navigation can be assessed. To systematize the great diversity of offered products, we have developed a classification system with eleven categories.

Classification system with eleven categories & frequency distribution of tested products

Describing
The analysis of customizable offerings shows that there is a huge variety of configuration systems and processes. In most cases this diversity can be explained by the particularity of the different products, although we found great differences of customization approaches in the same product categories as well. It was our aim to describe this variety in choice navigation as objectively as possible without rendering a judgment about the superiority or inferiority of any occurrence. Thus, we have measured and counted the characteristics of the different configuration systems distinguishing between (1) Visualization Features as well as (2) Navigation-, (3) Company- and (4) Customer-Help features.

Evaluating
To make a comprehensive statement about choice navigation, we decided to also include the judgment of (1) Visual Realism, (2) Usability, (3) Creativity and (4) Enjoyment. Moreover we assessed the number of (5) Choice Options and to what extent the configuration creates a unique product, i.e. (6) Uniqueness. The last two parameters can be seen as additional indicators for the development of the solution space. All evaluations were done by at least three independent experts for every customized offer to guarantee reliability. Process satisfaction is the main objective of choice navigation. For that reason, we have added the scores of Usability, Creativity and Enjoyment to identify best practices. After showing the detailed profiles we list all companies in an alphabetical order sorted by product category, at which we mark the best rated offerings.

We show 500 detailed profiles and evaluations of MC companies (here, for example, the NikeID profile)

Target Groups

With our study, we want to address these different target groups: (1) Managers of existing MC companies, (2) entrepreneurs who plan to start their own MC business, (3) established companies which plan to introduce customization, (4) IT specialists and developers of configuration systems, (5) academics and consultants in the field of mass customization. Moreover, we were told by our wives that such a collection of customizable products also serves as a great source of inspiration when seeking a Christmas or birthday present...

A Word of Caution

We believe that mass customization can be a source of competitive advantage for most firms. By increasing the flexibility of the organization and reinforcing the connections with its customers, a mass customization strategy can be one of the core components of a larger competitive strategy, and one of the central pillars of its sustainability. Whenever customers are not getting what they need, business opportunities are opened. Consequently, investment in building stronger mass customization capabilities is to be given serious consideration. In this report, we share the results of the first international and large scale benchmarking study of mass customization companies in the consumer goods field.

But before you dip into the details a word of caution: There is not one best way. Our conclusion is that a company should "customize its mass customization strategy" based on the requirements of its customer stock, the state of its competition, and the technology available. It should not blindly use successful mass customizers as templates to copy. After all, mass customization is an entrepreneurial endeavor that is broadly applicable to any business for which customers might be willing to pay for tailored solutions or experiences. Mass customization should be seen as a strategic mechanism to align the organization with customers' needs by deploying the three fundamental capabilities. After all, what is hard to develop will be difficult to copy, and as such the three fundamental capabilities can be a powerful source of sustainable competitive advantage.

Call for Continuous Improvement

Help us to improve this study! If you know a MC company fitting our requirements that is not included yet, please let us know. Also, we grateful for any notice on outdated or wrong information in the profiles. Let us also know if your believe that the product that we did test for a site did not represent the site's offering best. We will incorporate all of your suggestions in the next edition.

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