NCPA - National Center for Policy Analysis

Dallas Federal Reserve Bank: Customized Mass Production

May 13, 1999

Mass production is starting to give way to mass customization, reports the Federal Reserve Bank of Dallas. That is good news for consumers, since a wide variety of goods and services increases the chance consumers will find products that meet their individual requirements. And using Information Age technology to customize goods means they may cost no more than standard mass-produced products.

Just since the early 1970s, there's been an explosion of choice in the marketplace. For example,

  • The assortment of new vehicle models has risen from 140 to 260, soft drinks from 20 to more than 87, TV channels from 5 to 185, over-the- counter pain relievers from 17 to 141.
  • The U.S. market offers 7,563 prescription drugs, 3,000 beers, 1,174 amusement parks, 340 kinds of breakfast cereal and 50 brands of bottled water.
  • And where the Model T Ford only came in black, Ford cars now come in 46 other colors.

Moreover, since supplying exactly the right product increases utility, mass customization will increase living standards. For example,

  • Dell Computer and other companies can deliver customized computers in 16 million different combinations of components.
  • Connecticut's InterActive Custom Clothes allows Internet customers to specify hip size, leg and seat room, fabric, color, thread accents, and so forth for pants that are then produced at a New York factory.
  • Digitoe, a Washington company, uses a scanner to measure every millimeter of customers' feet for custom-made shoes.
  • Philadelphia's Acumin sells capsules customized with specific vitamins and dosages for each customer, cutting the number of pills some people swallow in a day.

New technologies, such as computers and the Internet, are leading the trend toward customization, say experts.

Source: W. Michael Cox and Richard Alm, "The Right Stuff: America's Move to Mass Customization," 1998 Annual Report, Federal Reserve Bank of Dallas.


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