International Consultancy Project

7/30/2019 International Consultancy Project

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MASTER OF BUSINESS ADMINISTRATION

AWARDED BY NOTTINGHAM TRENT UNIVERSITY

INTERNATIONAL CONSULTANCY PROJECT

Topic: Analysis of Effectiveness of Mass Customization in KOMARK Corporation

(Interim Report)

Group Members

1. Bing Tuck2. Muhammad Shahid3. Zubair Saleem4. Muhammad Atif Munir5. Satyajeet Das6. Haroon Rasheed7. Ezechukwu Dorath8. Godstime9. Petrick

Supervisor: Dr. Mukunda Kumar


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Table of Contents

Page No:

Executive Summary

1.0 Introduction 01

2.0 Background of KOMARK Corporation Berhad 05

3.0 Literature Review 07

3.1 Defining Mass Customization 07

3.2 Concept of Mass Customization 08

3.3 Levels of Mass Customization 08

3.4 Success factors of Mass Customization 09

3.4.1 Demand or variety and customization 10

3.4.2 Market Condition 10

3.4.3 Value sequence 11

3.4.4 Technological Innovation 11

3.4.5 Customizable products 12

3.4.6 Knowledge Sharing 12

3.5 Advantages of Mass Customization 12

4.0 Analysis 13

5.0 Recommendations and Action Plan (Under Process) 28

6.0 References 29

7.0 Questionnaire 30


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1.0 Introduction

The scope and objectives of this piece of work is to fulfill the requirements of Nottingham Trent

University UK to practically analyze a multinational organization. During this consultancy

project our group will analyze the production line and corporate strategies of KOMARKCORP

Berhad and effectiveness of Mass customization technique in the organization.

KOMARKCORP Berhad is one of Malaysias top manufacturing industry producing printed

labels and automatic labeling machines with a very wide network of its branches in Malaysia

(HQ), Singapore, China, Indonesia, and Thailand. This group of industries are producing and

supplying its products globally since 1998 and have achieved a competitive edge in todays

market with continuous innovation and positive efforts in its production and strategic planning of

the group.

In todays Global market, where global competition, ICT (Information Communication,

Technology) innovation, ISO standards, influence of Global Giants and Continuous

improvement in strategies and supply of quality products are the main focus of almost all the

manufacturing industries. KOMARKCORP Berhad have analyzed its production system and

generated some new innovative ideas to improve its production units and attain customer

satisfaction to sustain and compete in the global market.

On interaction with the management of KOMARKCORP Berhad, we came to know some major

factors/problems as given below and highlighted by the corporate management and the same

problems became reason of our this analysis and study of mass customization and its

effectiveness in the industry.

The organization has received some complaints from customers in quality anddissatisfaction in time required for delivery of products.

The organization has been solving the common and general causes of problems in itsproduction line but wants to sort out the special causes of problems causing above issues.


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The organization looking forward to have a new method of production and analyzing theimplementation of mass customization and technological innovation to solve the issues

and attain competitive edge in global market.

During our analysis we will analyze the internal and external factors influencing the production

line of the organization and effectiveness of mass customization in the organization.


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2.0 Company Background

KOMARKCORP Berhad is one of the Malaysias foremost labeling companies in labeling

industry having 21 years of extensive experience in printing of labels and manufacturing of

automatic labeling machine. The Company operates in two business segments: manufacturing of

self adhesive labels and stickers and trading of related products, and manufacturing of automatic

labeling machineries.

KOMARKCORP Berhad is a self-adhesive label converter and is known to be the only

automatic labeling machine (ALM) manufacturer in South East Asia as it designs and

manufactures its own labeling machines under the house brand "KOMARK".

Company manufactures airline tag and labels, computer labels, fabric labels and prime labels in

reel/sheet. Company also produces a number of machines like automatic label dispenser, label

role rewinding and mini slitting machines. In 1998 KomarkCorp Berhad has promoted Malaysia

to be the first country in South East Asia to manufacture indigenous custom-made automatic

labeling machines, and was awarded Pioneer Status by the Malaysia Industrial Development

Authority (MIDA).

The most imperative contribution KomarkCorp Berhad has made towards the realization of

Malaysia Vision 2020 is the establishment of the Research & Development (R&D) center. This

center has continuously carried out activities on automatic labeling machine and other related

products.

As a total solution provider organization, Komark berhad not only fulfill the demand of the

domestic market but also exports a wide range of product to overseas markets such as Singapore,

Thailand, Indonesia, Philippines, India, Papua New Guinea, China, Japan, USA, Middle East and

other countries.


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Source: Annual Report KOMARKCORP Berhad, 2010

Today, KOMARK Labeling machines have become a hallmark in the label packaging industries.

Currently, company expanding its networking to include Indochina, Central Asia and Latin

America to further balance their existing overseas operation in Singapore, Thailand and China.

Furthermore To enhance KomarkCorp Berhad's role internationally, a wide marketing network

in India, Pakistan and Philippines has been established. The high degree of dedication,

commitment and continuous innovative improvement of KomarkCorp Berhad has sustained

Malaysia in becoming one of the uttermost country in the field of labels and labeling technology

in Asia.


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3.0 Literature Review:

3.1 Defining Mass Customization

Mass Customization is the concept of Producing goods and services to meet individual

customers needs with near mass production efficiency. (Tseng & Jiao, 2001)

Product customization is the method of effectively postponing the task of differentiating a

product for a specific customer until the latest possible point in the supply work. (Chace at el:,

2006)

There are a number of factors mostly focused in a manufacturing organizations corporate

strategy like Product Quality, Process routes, Operation strategies and Product cost. While these

all factors and all operational strategies and corporate strategies follow the customer satisfaction

at the end. Mass Customization is used by organizations to achieve all these competitive

advantages and produce products as per specifications and needs of each customer to achieve

high rate of customer satisfaction and to sustain and compete in global markets.

Mass Customization relates with the ability to provide individually designed products and

services to every customer through high process integration. It used to be as a competitive

strategy by an increasing number of companies (Elsevier, 2001)

Product Customization or Mass Customization is a rational step in the evaluation of product

manufacturing from mass production to Build to Order system, as manufacturing of a product

and its quality is mainly analyzed through the customer satisfaction. Where mass customization

gives a competitive edge to produce the products as per each single customer needs. There are

two main examples of Mass Customization is Nokia and Internet phenomenon. Nokia Mobile,

Dell computers, Adidas, and Coke etc are the largest organizations focuses on mass

customization while producing and introducing its products in global market.


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3.2 Concept of Mass Customization

The concept and broad Visionary of Mass customization was introduced by Davis (1987) and

promoted as the ability to provide products and services based on customers needs through high

process agility and integration. Mass Customization are positioned below the main diagonal

Product and Process matrix of Hayed and Wheel Wrights, , for example, having medium to high

volume process types such as manufacturing cells or assembly lines that are able to deliver the

high product varieties usually associated to functional or fixed type operations.

According to some authors, Mass Customization is a system that uses information technology,

flexible processes, operational strategies, and organizational structures to deliver a wide range of

products and services which assemble specific needs of individual customers at the cost of Mass

produced items.

According to Dr, Ruskin (2008), Mass Customization is seen as a systematic idea involving all

aspects of products sale, development, production and delivery.

3.3 Levels of Mass Customization:

Pragmatists suggest Mass Customization concept only to deliver the products following

customer options, independent of the number of options actually offered. The successful Mass

Customization system must be able to arrange true individualization with high degree and

standard operation processes.

According to Hart (2001), the solution for the contention lies in careful determination of the

range in which a product or service can be meaningfully customized, and how individuals make

options upon this range.

Several authors proposed a continues framework whereupon Mass Customization may be

developed and value chained, ranging from the simple adaptation of products delivery to the

customer, up to total customization of products sale, design, assembly and delivery.


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According to Gilmore and Pine (1996), Mass Customization is summarized in four levels based

mostly on empirical observation, Collaboration, and transparency.

Source: von Hippel, User Toolkits for Innovation 2001

Accroding to Lample and Mintzberg (1996), A continuum of five Mass Customization strategies

involves different configurations of processes, products and customer transactions.

3.4 Success factors of Mass Customization:

The Success factors of Mass Customization depend on a series of internal and external factors.

The existence of these factors shows the use of Mass Customization as competitive strategy and

supports the development of Mass Customization system.

These triumph factors of mass customization are categorized in six divisions as given and

described below.

Relationship Level

(Increase Customer Loyalty)

Cost Level

(Mass production efficiency)

Solution Space Level

(Stable Processes and product Architecture)

Differentiation Level(Customized Products/Services)


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Source: Silveira, at el:, Mass Customization, 2000

3.4.1 Market Demand

The most important factor influences the brand name and corporate goals of an organization are

the demand of the products in global market and by the customer. Whereas, the customer

satisfaction has always been the key success factor for an organizations success.

During production of the products a manufacturer always should focus on two main factors; first

when the time required to manufacture and deliver the products, and the product cost.

Therefore Market demand is the major factor to understand the importance of Mass

customization and its need in production line of an industry.

3.4.2 Market Condition

Todays era reflect a huge competition in manufacturing industries due to globalization,

innovation, new and innovative strategies, and many other factors. In these market conditions an

MassCustomization

1.

MarketDemand

2.Market

Condition

3.

Valuesequence

4.

TechnologicalInnovation

5.customizable

products

6.Knowledge

Management


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organization must have adequate SKA (skills, knowledge, and abilities), Competitive workforce,

new technology, innovative strategies and other competitive advantages to sustain and compete

in todays global market.

Mass customization system follows the same rule of the global market to attain a competitive

advantage to sustain and compete as per market conditions, while the same vice versa reflects the

importance of Mass customization to attain value added services of time and cost effectiveness

and customer satisfaction.

3.4.3 Value sequence

To attain the competitive edge it is must for an organization to attain the competitive edge in

timely delivery of products and cost effectiveness to succeed. While an organization can only

achieve these competitive advantages, if the complete chain or operations operate in proper

efficient manner.

Most prominently pre and post departments i.e. suppliers, distributors and retailers perform their

job with high rate of willingness and readiness as per demand of system, and organization must

show a complete and organized value chain network.

3.4.4 Technological Innovation

Implementation of advanced manufacturing technologies is one of basic strategies to enable the

development of mass customization system to achieve its main objectives to attain the quality of

customized to satisfy the customers.

Mass Customization is one of the best opportunities offered to compete in todays global market

by coordinated implementation of advanced manufacturing technologies which helps to achieves

reduced production cost and customer satisfaction.


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3.4.5 Customizable products

The production units that can be assembled into different forms to produce a modular product,

and successful mass customization the mass customization products must be modularized,

versatile, and constantly renewed.

Although modularity is not the fundamental characteristic of mass customization, but it enables

simpler and lower cost manufacturing of products with similar effectiveness if compared to

successful mass customization. Also mass customization processes need a rapid product

development and innovation capabilities as per typical short life cycles of mass customization

products.

3.4.6 Knowledge Management

Mass Customization is a practically proven successful strategy and depends on the ability to

translate new customer demands into new products and services.

To achieve the customer satisfaction organizations must emphasize on knowledge creation and

knowledge sharing. It needs a dynamic network along with manufacturing, engineering,

expertise, and in house development of new products and advanced manufacturing technologies.

3.5 Advantages of Mass Customization:

First advantage of Mass Customization is, Mass customizers can customize products quickly for

individual customers or for niche markets than mass production efficiency and speed. Second is

using same principles, mass customizers can build to order both customized products and

standard products without forecasts, inventory or purchasing delays.


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4.0 Analysis

Question 1

Are the employees aware of KOMARKCORP Company potential activities and products?

Classification Frequency Percentage

(%)

A Yes 18 60%

B No 12 40%

Total 30 100%

According to above table and Graph it shows that the percentage of employees who are agreeing

with employees awareness of KOMARKCORP Company potential activities and products is

60%. The percentage of Employees who are not agreeing with this statement is 40%.


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Question 2

Do you feel that other companies have done better in reducing the production cost on their

products/services than this company?

Classification Frequency Percentage (%)

A Poor 4 13.33%

B Average 9 30%

C Uncertain 8 26.67%

D Good 6 20%

E Excellent 3 10%

Total 30 100%


with Poor rate employees is 13.33%, Average is 30%, Uncertain is 26.67%, Good is 20%, and

the percentage of employees who rated Excellent is 10%.


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Question 3

How would you classify the production cost of this organization to others in the global

market?


A Poor 6 20%

B Average 4 13.33%


D Good 4 13.33%

E Excellent 6 20%

Total 30 100%


with Poor rate employees is 20%, Average is 13.33%, Uncertain is 33.34%, Good is 13.33%,

and the percentage of employees who rated Excellent is 20%.


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Question 4

What do you think about the manufacturing process and techniques in KOMARKCORP?


A Poor 5 16.67%

B Average 11 36.67%


D Good 7 23.33%

E Excellent 3 10%

Total 30 100%

According to above table and Graph it shows that the percentage of employees who are agreeingwith Poor rate employees is 16.67%, Average is 36.67%, Uncertain is 13.33%, Good is 23.33%,

and the percentage of employees who rated Excellent is 10%.


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Question 5

Do you think that channels of product supply are sufficient to support the demand of the

product in your region?


A Yes 21 70%

B No 9 30%

Total 30 100%


with Do you think that channels of product supply are sufficient to support the demand of the

product in your region? Is 70%. The percentage of Employees who are not agreeing with this

statement is 30%.


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Question 6

Has the company taken comments/feedbacks seriously in order to improve their products/

services?


A Yes 8 26.67%

B No 9 30%


Total 30 100%

According to above table and Graph it shows that the percentage of employees who Rated Yes is

26.67%, No is 30%, and the percentage of employees who rated Uncertain is 43.33%.


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Question 7

Does the company do sufficient research in problem areas encountered by the client and

production cost before mutually agreeing to work together?


(%)

A Yes 11 36.66%

B No 19 63.34%

Total 30 100%

According to above table and Graph it shows that the percentage of employees who are not

agreeing with Does the company do sufficient research in problem areas encountered by the

client and production cost before mutually agreeing to work together? Is 36.66%. The percentage

of Employees who are not agreeing with this statement is 63.34%.


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Question 8

Are you satisfied with the product cost or not?


(%)

A Yes 16 53.34%

B No 14 46.66%

Total 30 100%


with, Are you satisfied with the product cost or not? Is 53.34%. The percentage of Employees

who are not agreeing with this statement is 46.66%.


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Question 9

How frequently is the organization willing to carry out the manufacturing of their

products/services activities?


A 1 time/year 7 23.34%

B 2 times/year 10 33.34%

C 3 times/year 8 26.66%

D 4 times/year 5 16.66%

Total 30 100%

According to above table and graph, it shows the percentage of employees who are agreeing with

this statement how frequently is the organization willing to carry out the manufacturing of their

products/services activities? The percentage of once a year is 23.34%, of two times a year

33.34%, three times a year 26.66% and four times a year 16.66% respectively.


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Question 10

How much increases in sales does the company anticipate from mass customization

activities are given serious thought?


A 10% 6 20%

B 20% 7 23.34%

C 30% 14 46.66%

D Above 30% 3 10%

Total 30 100%

According to above table and graph Employees who rated that 10% sales would be increase is

20% of employees out of 100%, who rated that 20% will be increase is 23.34%, who rated that

30% will be increased is 46.66% and who rated above 30% are 10% of total employees.


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Question 11

Will the organization increase the allocated budget in the near future if sales increase?


A Yes 24 80%

B No 2 6.66%

C Not sure 4 13.34%

Total 30 100%

According to the above table and graph the employees who are agreeing or saying yes to this

statement is 80%, the percentage of employees who are not agree with this is 6.66% and who

says not sure is 13.34%.


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Question 12

Do we have sufficient expertise to carry out the manufacturing of the products/services to

this company?


(%)

A Yes 23 76.66%

B No 7 23.34%

Total 30 100%

According to above table and graph the percentage of employees who are agree with this

statement is 76.66%, and the percentage of employees who are not agree is 23.34%


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Question 13

Does the company believe in the importance of keeping good clients and change at any

point in time?


A Yes 4 13.34%

B No 7 23.33%

C Most likely 19 63.33%

Total 30 100%

According to above table and graph the percentage of employees who rated yes is 13.34%, who

rated No23.33% and the percentage of employees who rated Most Likely is 63.33%.


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Question 14

Has the company emulated any other production strategies from other companies?


A Yes 11 36.66%

B No 1 3.34%

C Most likely 18 60%

Total 30 100%

According to above table and graph it shows that the percentage of employees who Rated Yes is

36.66%, percentage of employees who rated no is 3.34%, Percentage of employees who rated

Most Likely is 60%.


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Question 15

Would you agree that as learning organization and also willing to have a change that their

production cost can be reduce in due time?


A Yes 5 16.67%

B No 11 36.66%

C Most likely 14 46.67%

Total 30 100%

According to the above table and graph the percentage of employees who rated yes is 16.67%,

who rated No is 36.66% and the percentage of employees of rated Most Likely is 46.67%.


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5.0 Recommendations and Action Plan (Under Process)

Customization

levelassessment

Mass

customizationin services

Information

management

Quality control

andmonitoring

Reliability

analysis


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Refereces

1. Du, X. and Tseng, M.M. Characterizing Customer Value for Product Customization,Proceedings of the 1999 ASME Design Engineering Technical Conference, Las Vegas

(1999).

2. Duray, R. et al. Approaches to Mass Customization: Configurations and EmpiricalValidation, Journal of Operations Managements, 18 (2000).

3. Frank T. Piller Hart, George and Helen Hart, Mass Customization and PersonalizationStrategies, Dallas: SIL International, (2001).

4. Joseph Lampel and Henry Mintzberg, Customizing Customization, Article, (1996).5. Von Hippel, E. Perspective: User Toolkits for Innovation, The Journal of Product

Innovation Management, 18 (2001)

6. Dr.Ruskin. Mahemanipal Uni, Dubai Campus, 2008

Websites

https://www.xing.com/

http://books.google.com.my/
https://www.xing.com/https://www.xing.com/https://www.xing.com/


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Research questionnaire for ICP at KOMARKCORP Company

Appendix A: Questionnaire for KOMARKCORP Clients

Section A: Client Details

1- Name2- Management Level3- Region of Operation4- Are you? Employee

Section B: Awareness and Recommendation

1. Are you aware of KOMARKCORP Company potential activities or products/services?(A) Yes (B) No

2. Do you feel that other companies have done better in reducing the production cost ontheir products/services than this company?

(A) Poor (B) Average (C) Uncertain (D) Good

(E) Excellent

3. How would you classify the production cost of this organization to others in the globalmarket?

a. (A) Poor (B) Average (C) Uncertainb. (D) Good (E) Excellent

4. What do you think about the manufacturing process and techniques in KOMARKCORP?a. (A) Poor (B) Average (C) Uncertainb. (D) Good (E) Excellent

5. Do you think that channels of product supply are sufficient to support the demand of theproduct in your region? (Gen, Q for employees and customer)


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6. Has the company taken comments/feedbacks seriously in order to improve their products/services?

(A) Yes (B) No (C) Uncertain

7. Does the company do sufficient research in problem areas encountered by the client andproduction cost before mutually agreeing to work together?

(A) Yes (B) No

8. Are you satisfied with the product cost or not?(A) Yes (B) No

9. How frequently is the organization willing to carry out the manufacturing of theirproducts/services activities?

(A) Once a year (B) twice a year (C) 3 times year (D)

4 times a year

10.How much increases in sales does the company anticipate from mass customizationactivities are given serious thought?

(A) 10% (B) 20% (C) 30%

(D) Above 30%

11.Will the organization increase the allocated budget in the near future if sales increases?(A) Yes (B) No (C) Not sure

12.Does the Company have sufficient expertise to carry out the manufacturing of theproducts/services to this company?

(A) Yes (B) No13.Does the company believe in the importance of keeping good clients and change at any

point in time?

(A) Yes (B) No (C) Most likely

14.Has the company emulated any other production strategies from other companies?(A) Yes (B) No (C) Most likely

15.Would you agree that as learning organization and also willing to have a change that theirproduction cost can be reduce in due time?

(A) Yes (B) No (C) Most likely

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