By Mary Ruddy
Vice President, Design-to-Order Solutions
Edited by Paul Dvorak
Imagine this: You've been designing a new processing line for weeks and have finally worked out the requirements for the major components. You know exact sizes, features, and performance requirements for each piece. The only problem, say suppliers, is that it will take three months before they can generate detailed designs for the new equipment, and even longer before it is delivered.
In a perfect world, you'd order sophisticated, custom components online and receive virtual prototypes that let you verify that what was requested was indeed what is needed. The order would instantly go to the factory where the equipment would be built and shipped. In this perfect world, manufacturers would do the same for every customer each day, week after week, month after month.
BACK TO EARTH
Of course, we don't live in a perfect world. And there is no agreement on what mass customization is. To buyers, mass customization typically means that products — be they ball bearings, steering wheels, or lamp shades — will arrive on time and on budget, and meet customer specifications.
For manufacturers, mass customization typically means putting together a sophisticated infrastructure that ties together suppliers, customers, and themselves, almost as codevelopers. This lets manufacturers communicate in real time with customers to ascertain requirements, and with suppliers to learn what's doable within an allotted period.
Without the infrastructure, mass customization stands little chance of succeeding. An effort that misfired is reported in the book Making Mass Customization Work, by Joseph Pine, Bart Victor, and Andrew Boynton. They relate how a large mainframe computer maker set a goal of delivering custombuilt mainframes in a week. "It stocked inventory for every possible combination customers could order," they report. "An approach that ended up saddling [the company] with hundreds of millions of dollars in excess inventory." The lesson here is that if mass customization is to work, stocking huge inventories is not the way to do it.
Because design-to-order has been an unreachable ideal until recently, companies have instead set up build-to-order and assemble-to-order systems. Dell Computer, for example, has an assemble-to-order system that works well. From a few dozen standard components, it puts together computers that meet customer specs and ships them in 24 hr.
Thanks to technological advances in CAD, PDM, and networking, mass customization is closer than ever. This so-called design-to-order system provides a higher degree of flexibility than build-to-order or assemble-to-order. Where the latter let customers pick and choose only from among predefined options, design-to-order lets customers change the actual design to create new sizes or modify performance characteristics.
Advances in four technologies have made these changes possible:
Virtual prototyping and other CAD features such as detailed visualization let manufacturers send lifelike computer-generated models to customers for evaluation. Customers provide feedback before anything reaches the expensive manufacturing stage. Models are automatically and quickly reconfigured to accurately reflect customer preferences and requirements.
Integration with suppliers lets manufacturers connect their CAD and PDM systems with the systems of their suppliers. This lets designers work with suppliers' engineers to tailor designs to customer preferences.
Using high-performance networking, including peer-to-peer and Internetbased networking technologies, engineers exchange detailed graphics files, such as 3D CAD models, during Web conferences or informal phone consultations. Rather than describing proposed changes to off-shore suppliers, for instance, a designer sends a link to a streamlined version of the model by e-mail, while the two engineers talk on the phone.
Collaborative workspace applications using XML and other Web technologies form common workspace portals in which engineers and customers work together on designs. Such collaboration reduces the barriers of time and space traditionally separating suppliers from manufacturers, and manufacturers from customers.
For manufacturers who have not started down the road to mass customization, now is the time to create a prototype that can grow to a production system. The few guidelines here can help you prepare for a mass-customization system.
• Pick a prototype project that would benefit from mass customization and show results fairly quickly. Look for a product family with a "pain point," such as high error rates or long response times, that is well defined and measurable. A few companies, for example have chosen to start with office workstations, kitchen cabinets, and electric motors — all of these need to be sized to meet the buyer's specific needs.
The project should show demonstrable results in a reasonable period, six to eight weeks, for example. This suggestion points to a product family that has simple CAD models that are quick to modify, or good CAD models already built using a parametric CAD authoring tool and best practices for design for configurability and reuse.
• Assemble a cross-functional team to assess the project from different perspectives and help champion the project internally. To ensure the implementation's success, an organization needs to buy into the customization system's benefits, and to the value of any organizational changes that stem from it.
• For personnel, a core team might include CAD designers who originated the product models, application engineers who create customer-specific variations, the product-line marketing managers, and IT. Other members could include representatives from eBusiness groups, your supplier's design staff, and, over time, from other internal groups, such as ERP or CRM. Consultants can provide expertise in process engineering, project management and organizational change management.
To build the mass-customization system, look for techniques and technologies to apply in three functions.
Involve customers in the process. The more closely you connect with customers, the better. Older methods for doing so — collecting information from distributors, call centers, and other "touch points" — don't go far enough to learn customer's complete requirements. Rule-based sales configurators are better yet. They let customers configure products.
While these give customers control over simple options, they don't let them interact with the design process. For that, employ a collaborative workspace sometimes called a dynamic design portal. It lets customers specify requirements for custom products. This information compliments conventional techniques of gathering market intelligence.
Manage product variety. A system should give customers a wide variety of choices, but limit the burden on the developing department, whether in physical inventory or system complexity. Manufacturing techniques sometimes categorized as "pull," Kanban and JIT for example, can help with the physical burden. But to reduce system complexity, rationalize products as much as possible. This means reducing or breaking products and components into reusable modules, and writing rules that define how much products can be changed. Publish this information in your dynamic design portal. Then, customer choices will stay within the bounds of your product families.
Maximize collaborative design. This gives members of the design team and other parties the tools they need to effectively work together on the Web. It also creates links to your product-family databases and models, and with user interfaces that can be personalized to give each user the information or "view" they need, along with navigation tools. It should use a workflow engine to track processes and people at every stage of product development. It should also handle rapid exchanges of model and visualization data among participants.
The infrastructure described by the three areas supports a range of project participants. For instance, senior management may be involved with product development and idea generation, but then may step away until the marketing and launch phases. Customers, on the other hand, may get involved in idea generation and product design, but not manufacturing. Similarly, R&D, manufacturing, and marketing will jump in and out of the process at various points.
Benefits from implementing mass customization range from tactical to strategic. At a tactical level, manufacturers should expect to gain customer loyalty, not to mention market share. And because products are more closely designed to meet customer needs, manufacturing and marketing efficiency should increase, and excess inventory should drop.
At a strategic level, collaborative systems that support mass customization will permit a manufacturer's value chain — the collection of suppliers, contract manufacturers, customers and other partners — to evolve from a sequential to a parallel operation. In the past, each member handed off a completed project to the next member in line. In the future, value chains will be increasingly dynamic, letting any participant add value at almost any point in the development process.
It'll be a brave new world, with entire value chains, rather than individual organizations, competing for customers and market share. Winners will be those companies that understand the subtleties and challenges of masscustomization systems.