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Not All Industries Would Benefit From Mass Customization
Daily Policy Digest

Economic Issues / Technology and Productivity

Tuesday, April 23, 2002
The success of Dell Computers with mass customization of personal computers has caught the attention of manufacturers in other industries looking for new ways to reduce inventory costs and offer customized products.

But some studies show that this enthusiasm might be unrealistic. Only a few products have attributes suitable for mass-customization at low cost. To offer customized products, an industry must have certain capabilities:

  • They must have an easy way of getting the necessary information from consumers.
  • The production process must be flexible; since usually only certain stages of production are flexible, only some attributes of the product can be customized.
  • The logistics of distributing the right product to the right customer must work efficiently and at a reasonable cost.
Skeptics suggest the novelty of mass customization will decline and then only attributes on which consumer preferences vary a lot, like clothes and sports equipment, will be marketed as customized products.

For other products or attributes, the best option might be to use technology and creativity to make them configurable, so they will adapt to different preferences and/or sizes. This is the better option for car seats, for example, where customization has disadvantages given that cars are used by more than one person over their useful lives.

Source: "Is Mass Customization Feasible?" Economic Intuition, Summer 2001; based on Mani Agraval, T.V. Kumaresh and Glenn A. Mercer, "The False Promise of Mass Customization," McKinsey Quarterly, 2001, No.3, and Paul Zipkin, "The limits of Mass Customization," MIT Sloan Management Review, Spring 2001.

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