January 22, 2011
Scaling your Modularized Mass Customization Production

A production that makes mass customized goods almost always requires a modularized production. Example: To make customized chocolate bars, you must define the modules, such as 4 base chocolates and 100 toppings in the case of chocri. But not only the inputs are modules, the process has to be divided into modules as well. To define those process modules correctly is imperative for a successful mass customized business. For example, at chocri different modules could have been the size of the chocolate bar, the shape of the chocolate bar, we could have offered 100 base chocolates and four toppings, or customized packagings every time. There are endless possibilities to define those modules, and they might change over time (at chocri, we introduced a fourth base chocolate after two years, which of course caused an explosion of the possible chocolate bars you can make on the website).

As Pine and Gilmore write in their introduction to Markets of One:

“Modular capabilities are much more difficult to design than integrated products. … establishing such capabilities requires some down-and-dirty dealing with various operational details of one’s business.”

I couldn’t agree more, and this particularly applies to scaling up the business. As more and more orders come in, you have to be able to deal with the complexity inherent in a module based production. Take chocri for example: The people who make our chocolate bars have to be trained to know every topping, how to put on the chocolate bar in relation to other toppings (so that it tastes and looks good). Once a new topping enters our list (e.g. our topping of the month), the production team needs to adjust, to learn vocabulary (for our international orders). When we have a theme Valentine’s Day packaging, they need to look for those orders that chose it. The more chocolate bars we make, the more people we need to make the chocolate bars, the higher the complexity in ensuring that every chocolate bar that leaves is made perfectly.

I think that the “down-and-dirty dealing with various operational details” requires you as a mass customizer to have your production in-house. Or at least that your supplier is as invested in its success as you are yourself. The added complexity in mass customization production cannot be handled by everyone, especially not by those who are used to mass production processes. 

11:30am  |   URL: http://tmblr.co/ZEiMQy2hN1Yy
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Filed under: Production Mass Customization Modularization 
January 17, 2011
Mass Customization As a Revolution In Production?

There are several ways to look at Mass Customization:

  • As a business model innovation that changes what type of products people consume
  • As a thought model that applies to products, services, art and more
  • As a production technique

While I’m most involved with the first bullet point (mass customization as a business model), which pays more attention to the external and the consumer, I find the research in regards to production fascinating. As I’m reading the book Markets of One by Prof. Joseph Pine and James Gilmore, I thought I’d share some points mention in its introduction that I think should be interesting to anyone involved in any facet of mass customization and that are a bit more related with the production of goods in a mass customized way.

In the science of production, mass customization is essentially another concept, and a very high level concept as that. It would be fair to say that it might be the next revolution in how goods are produced, following crafting and mass production.

Historically, the only major concept on how to produce goods was crafting. Somebody would go to the tailor and give a shirt in order. The shirt would be made right then and there by the tailor, to the measurements taken by the customer. Since everything was made on demand and specifically for a customer coming into the shop, making the shirt (or the shoes) according to the specifications and measurements of the customer wasn’t much more effort. It was normal. This production method can still be found today of course, but either they’re in countries with low labor costs (get your own shirt made in China and you’ll see), or they are extremely expensive (get your own shirt made in London and you’ll see). Amazingly enough, Robert T. McTeer Jr., the President and CEO of the Fed in Dallas summarized this before (as quoted in Markets of One):

“Things used to be made to order and made to fit. But they were labor-intensive and expensive”

Then the industrial revolution happened, and with it came machines, modern methods of transportation, and Henry Ford. Suddenly, goods were produced on assembly lines: Mass Production. Shirts and shoes were made in standardized sizes and standardized designs. It became much cheaper to produce these goods, and suddenly everyone was able to afford a pair of shoes. As Gilmore and Pine write in their introduction to Markets of One: “…as new mass-produced items rolled off the lines, most consumers gladly sacrificed what they wanted exactly in order to simply obtain one.” Amazingly enough, this standardization is even celebrated today, and it’s what brands exist for. Most consumers are influenced by what others around them have, and they want the same. Brands are “in”, and suddenly everyone needs, let’s say, an Apple product. Robert T. McTeer Jr. please:

“Mass production came along and made things more affordable, but at a cost - the cost of sameness, the cost of one-size-fits-all.”

Gilmore and Pine suggest that the computer and the internet have the same “revolutionary” effect on us today that the industrial revolution had on our predecessors. Suddenly, amazing amounts of data are available, and even better - we have the means to process them, and to translate them into actions. Everyone is connected to everyone, and since the advent of social media, it’s normal for consumers to interact with companies, as if they were a tailor on main street in the village again. Machines, no, let’s call them robots, can make things just as well as humans did in the past (maybe even better), but at a much larger scale, and in a flexible manner that was unthinkable in Ford’s times. It is finally possible to combine the low cost of mass production with the individualization of crafting. Enter: Mass Customization

“Technology is beginning to let us have it both ways. Increasingly, we’re getting more personalization at mass-production prices. We’re moving toward mass customization”

Yes, that’s Robert T. McTeer Jr. of course. At this point I have to admit that he said that in 1998 - 13 years ago! The Markets of One is from 2000. But let’s keep in mind that it took a good while for mass produced cars to become the norm as well. The first T-Model cost the equivalent of $20k modern-day-USD in 1909, and by 1920 the price had decreased to $3000 in modern-day-USD [source] As prices decreased gradually, more consumer demand was created, and more companies started offering mass produced goods. We as consumers have gotten fairly used to standardized goods, and companies have invested in complex and integrated systems that are difficult to break up. Therefore, we might have to rely on small companies to drive this “new age of production”, and startups take their time. It’s up to you, dear reader!

11:32am  |   URL: http://tmblr.co/ZEiMQy2cfuUE
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Filed under: Production Mass Customization Mass Production Henry Ford 
November 10, 2010
"The Best Startups Are Founded By Entrepreneurs Who Built The Product Themselves"

“It’s often said that the best startups are founded by entrepreneurs who built the product for themselves.

While that rule doesn’t always hold true, I can say it’s it generally a good thing when entrepreneurs have deep domain expertise in the space where they are innovating.”

Makes me think about the success of chocri (we make the customized chocolate bars in our own facility, two floors down from our office), and the struggles I’ve heard from companies that outsourced their production to partners. Something to think about if you want to start a mass customization company!

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Filed under: Production Mass Customization 
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