Lean or Mass Customization

Today almost entire manufacturing industry is struggling with growing number of product variants or SKUs in their portfolio. Henry Ford’s mass production appears a Stone Age technique. At the same time expectations to deliver the customized products quickly at competitive prices are increasing. Traditional way of managing and selling products i.e. unique numbering at end-item level can no more deliver desired efficiencies.
Hence, Lean customization is way forward.

Does lean customization mean less customization? No. It doesn’t. It means mass customization in a Lean fashion. Is it really possible to achieve these conflicting objectives at the same time? Yes. With right approach on product modeling and use of appropriate IT application like product configurator.
Product modeling is a very critical decision from market perspective. It deals with the kind of choices that are made available to customer. For example, an automobile is made-up of 10,000 components.
• Can you imagine a scenario where manufacturer offering customer to choose all 10,000 components from available options?
• In contrast, what if customer is given an option to select only color and everything else remains same.
Both will be a disaster for customer satisfaction. Hence, product modeling is a vital decision. Its impact is not only on sales and marketing but much larger consequences on supply side of the house both in terms of efficiencies and speed.

So how this decision can be made so as to achieve a Lean Supply Chain?

Mass customization is predominant in “Assemble-to-order” or “Configure-to-Order”. In this type of manufacturing topology, large numbers of raw materials or components are assembled into relatively fewer numbers of modules or sub-assemblies. And, at final assembly stage, again large number of end products / variants can be made from these modules. Products are modeled such that sub-assemblies or modules can be kept ready in anticipation of orders. As soon as order is received, modules can be assembled within customer’s expectation of lead time. In short, modeling should be such that –
• There are small number of unique sub-assemblies or modules
• One can build fairly large number of custom configurations to meet unique / custom needs of customer
• Assembly cycle time is within customer’s tolerance to lead-time
Applying Kanban at sub-assembly level is the way to keep operations lean. Kanban size can be determined based on historical demand trend of different modules and their combinations. Product Configurator becomes a vital tool for Lean Customization by way of –
• Building intelligence on customer and market preferences and drivers of demand
• Demand shaping and Guiding customer to choose particular configuration
• Providing a rule-based platform to avoid selling of spurious configurations

Comments

[Neelabh Tewari]

"Products are modeled such that sub-assemblies or modules can be kept ready in anticipation of orders"
I would like to ask that since you are talking about highly customized products, no production can be started based on forecast, because what exactly has to be manufactured and in what sequence is not known. So what purpose will readying the modules serve when how to manufacture is not known.