Mass Customization for the Wood Products Industry Regional Wood Products Consortium workshop, April and May 2011

Mass Customization

Implementation

Torsten Lihra and Urs Buehlmann

2 Mass Customization Implementation

Overview

•! Mass customization

•! Mass customization implementation

challenges

•! Mass customization implementation

•! The real challenge

•! Summary

3 Mass Customization Implementation

4

Levels of MC Retailing

Distribution

Packaging

Assembling

Comp. Mfg.

Supply

Engineering

Design

Product Value

Chain

Increasing

Levels of MC

5

Challenges

Implementation of MC is challenging

•! Make-to-order (MTO)

•! Small batch sizes

•! Supply chain management

•! IT

•! Marketing

•! Customer interaction

•! …

6

MC in different industries

•! Architectural Woodwork

•! Moulding

•! Flooring

•! Wood Components

•! Nonupholstered household furniture

•! Upholstered household furniture

•! Office furniture

•! Kitchen cabinets

18 Mass Customization Implementation

19

Manufacturer perception of MC implementation

Interviews with 22 furniture manufacturers

on MC implementation issues

•! USA, Canada, Germany

•! Top management

•! Companies of different sizes

•! Companies that have implemented MC

20

Manufacturer perception of MC implementation

Future competitiveness

0 2 4 6 8 10 12 14 16 18 20

source world wide

be consumer oriented

create evolutive furniture

develop industry clusters

innovate

improve managements skills

target up scale furniture

improve retailer relationship

automate

offer better buying experience

improve branding

reduce production costs

reduce shipping delais

target niche markets

improve services

offer more personnalisation

respondents (%)

?

21

Manufacturer perception of MC implementation

MC barriers and limits

•! Internal barriers

–! company culture

–! industrial engineering skills

•! External barriers

–! lack of retailer support

•! MC limits

–! consumers’ design abilities

22

Manufacturer perception of MC implementation

Manufacturers always did the initial step to MC

in a try and error mode

0 10 20 30 40 50 60 70 80

design products

configur products

use Internet

chose options

express needs

respondents (%)

Desired

consumer

involvement

23

Manufacturer perception of MC implementation

0 5 10 15 20 25 30

accessories

design

evolutive furniture

materials

price points

mouldings

item choice

configuration

hardware

styles

dimensions

colors

respondents (%)

MC level offered by manufacturers

24

0 2 4 6 8 10 12 14

sales forecast accuracy

product standardization

process automation

product development time

storage space

logistics

industrial engineering

labour flexibility

Integration of sales, marketing and production

company culture

production flexibility

IT

cycle time reduction

batch size reduction

set-up time reduction

supply chain management

respondents (%)

Manufacturer perception of MC implementation

MC implementation

challenges

25 Mass Customization Implementation

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26

European style furniture

American style furniture

Traditional...

Simplified...

Product design

27

Evolution of processes

28

Software integration

29

Point of sale

30

Order entry

31

Product configuration

32

Data generation

33

Supply chain activation

34

Scheduling

35

Product data generation

36

Execution / control

37

Shipping

38 Mass Customization Implementation

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39 Mass Customization Implementation

Implementation challenges

Things to get right:

•! Company culture

•! Supply chain

•! Production processes

•! set-up time

•! batch sizes

•! cycle time

•! production flexibility

•! IT

40

Leadership

41 Mass Customization Implementation

Supply chain and production processes

All the challenges in the production

processes, e.g.,

•! supply chain management

•! set-up time reductions

•! batch size reductions

•! cycle time reductions

•! production flexibility increases

are addressed with Lean.

42 Mass Customization Implementation

Lean building blocks

Lean transformation

43 Mass Customization Implementation

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45 Mass Customization Implementation

Mass customization requires long-term

commitment, knowledge and a holistic

approach

•! Product design and engineering

•! Supply chain management

•! Need production flexibility

•! low set-up times

•! small batch sizes

•! short cycle times

•! IT

Summary – manufacturer view