The demand is there, but to fill it, companies have to know how to build mass-customized products on demand.
By David M. Anderson
Mass customization has been talked up for years at the wouldn’t-it-be-nice level. And everyone agrees: yes, it would be nice.
Many manufacturers can benefit from it. Those that could gain the most are companies with challenges involving product variety, volatile markets, unreliable forecasts, inventory problems, and response time. But mass customization hasn’t really caught on yet because of a missing link—that is, knowing how to actually design and build mass-customized products.
The solution is concurrently engineering product families and flexible processes so any product variation within a family can be built on-demand using common parts that are always available. Accomplishing this will require new and different strategies:
PRODUCTION STRATEGY aims to build any variation in a product family on demand economically, which requires versatile flexible processes without expensive setup charges or delays.
SUPPLY CHAIN STRATEGY assures that all parts, modules, and materials be must be always nearby and spontaneously resupplied by the techniques presented below.
DESIGN STRATEGY concurrently engineers the design of the product families and their flexible processes to build customized products on-demand from common parts and materials.
MARKETING STRATEGY identifies product families that have a need for mass-customized products and can be economically built on demand.
Grouping Products Into Families
Companies can start the transition of mass customization by analyzing current product offerings and potential relevant variations. These companies can initially base their scenarios on their installed computer numerically controlled (CNC) machine tools, even if they are currently used in a batch mode.
Product families are not the same as product lines, which are a marketing or management convenience. Product family grouping must be determined by design, manufacturing, and supply chain criteria, not adjacent pages in catalogs or Web site structure.
The marketing department can offer information about the range of potential customizations that would be of value to potential customers.
Companies should not limit their thinking to current offerings or current customers or even current distribution and sales channels. One of Dell’s innovations was to sell assembled-to-order computers directly to customers.
As it considers customization opportunities, a company should avoid extremes—that is, wanting to offer every possible customization or limiting the selection too stringently.
The next step is to group products and potential variations into candidate product families that could be built on demand.
The goal is to create product families that are compatible with on-demand manufacturing principles.
Not all product variations are feasible for mass customization, so a company must focus on the product families and variations that are compatible with mass customization principles. Products that don’t fit into any group should be moved out of the mass customization operation. They can be outsourced, or just dropped.
The marketing department will help rank the relative opportunities of various product families. If marketing opportunities don’t match well with product families that can be made on equipment already in the plant, the company must restructure product family groupings or make production processes flexible enough to accommodate market needs.
Mass customization depends on aggressive standardization, which standardizes on “the best” parts, materials, and modules that are needed for the most demanding application. These versatile parts are then used in all relevant products in the family, even if some products get a “better” part than they need. The illustrated example, to be discussed later in this article, shows several instances of standardizing on the single best material.
This principle may appear to raise the part cost for simpler products. However, there will be a net cost saving for the company because higher order quantities will benefit from economies of scale. There will be more savings in material overhead from fewer parts to purchase, less inventory to pay for, less expediting, and lower quality costs from better qualifications of part and suppliers.
Spontaneous Supply Chain
Standard parts and materials can be made available spontaneously as they are needed for on-demand production without internal purchasing, IT system, or inventory expenses, through a variety of means.
STEADY FLOWS can be arranged for aggressively standardized parts or materials. If there is only one type of part or material needed, then forecasting many types would be avoided. “Ordering” becomes as simple as matching the tonnage in to the tonnage out. In other words, the incoming flow would be equal to the monthly consumption of the plant.
MIN/MAX TECHNIQUES can be used for raw materials like sheet metal, which is consumed until the stack reaches a minimum level, usually marked on the rack or wall. This triggers an automatic reorder of the material to bring it up the maximum level without the usual purchasing costs. The reordering process could be manual (where someone calls in another predetermined order) or a person or a sensor notifies purchasing or a computer to place another predetermined order. In supermarkets, computerized reorders are triggered by the bar-code entry at the check-out counter.
LINEAR CUT-OFF can greatly reduce raw material variety by cutting linear materials on demand at the points of use. A cut-off machine could be fully programmable or a worker could position the material up against a programmable or a manual stop. Linear materials include all forms of bar stock, extrusions, strips, tubing, hose, wire, rope, cable, chain, and so forth.
BREADTRUCK DELIVERY (sometimes called “free stock”) is an easy way to resupply small, inexpensive parts, like fasteners. Instead of depending on forecasts to trigger a manufacturing resource planning system to generate purchase orders, all the jellybean parts can always be available in bins at all the points of use. This eliminates all the tasks involved in receiving and internal part distribution. A local supplier is contracted to keep the bins full, and it bills the company monthly for what has been used, much like the way bread is resupplied by a breadtruck to a market.
KANBAN is an effective way to automatically resupply parts that can even be made in batches. In the two-bin kanban resupply system, as each bin of parts is consumed, it goes back to its source for a refill. Another full bin is used until the first bin is resupplied. The lower right of the schematic illustration shows two rows of kanban bins. The front row is used until a bin is emptied, in which case a full bin slides forward and the empty bin goes back to its source to be filled and returned before the active bin runs out. Kanban works best for semi-standard parts without too much variety, which would increase work-in-process inventory and clutter assembly stations with too many part bins. Alternatively, kanbans can be used for two pallets, two piles of parts, two squares on the floor, or two truck trailers.
A prerequisite to flexible processing needed for mass customization is the elimination of setup. Spontaneous resupply techniques, for instance, eliminate the setup time for getting parts to the assembly area, because parts are always nearby.
Standardizing parts and materials eliminates the need to change the raw materials at workstations.
You can eliminate machine programming delays by instantly downloading prewritten programs from a program library or generating unique programs on demand.
You can eliminate part/material loading setups with flexible fixturing and locating geometries for the whole product family. For instance, a flexible fixture for a family of rectangular parts would position all parts on a machine tool table against a common rear edge and a common side edge, with all dimensions referenced from each datum. A family of printed circuit boards could all be located by standard tooling holes that mount to the machine’s standard tooling pins.
Displaying instructions at each workstation can eliminate the setup time to find and understand manual instructions.
The following example shows a flexible line that can spontaneously fabricate and assemble products that need any combination of laser or plasma cutting, bending, milling, turning, programmable cut-off, manual subassembly, and final assembly.
The model can also include many other processes. Hoffman Engineering, which makes electrical enclosures, used the model when building a $30 million plant near Lexington, Ky., to mass-customize large sheet metal enclosures.
The schematic illustration shows the flow of parts (indicated by solid lines) and information (dashed lines). Boldface words refer to labels on the illustration.
The process starts with a dialog between manufacturer and customer. The customer’s questions are quickly explored and a valid customization is determined from predetermined rules. Various “what if” scenarios can be explored, complete with price and availability quotes, by using configuration software, or configurators.
When the configuration has been optimized and approved by the customer, the order information is sent by modem to the factory’s order entry database. The order information is converted into various data packets that go to on-line assembly instruction monitors, which tell workers how to assemble each product, and to a CAD/CAM workstation.
The workstation is an automatic or semiautomatic computer that enters customer-order data into CAD drawings. The drawings are created with floating dimensions that accept the customer’s dimensions and then adjust all the part drawings. Finally, this station automatically converts each customized drawing into unique CNC programs for the production equipment.
The actual production starts when sheet metal from the standard sheet stack is fed into the laser cutter. Left-over material can be used for parts, if they can be designed to use the same standard material.
If the manufacturer uses enough of a single type of sheet metal, the metal could be procured in bulk and fed from a coil, which would incur lower costs and eliminate the waste that occurs on the ends of sheets.
Using a laser cutter or plasma cutter lets all the sheet metal cutting—including the outside shape and all holes, slots, and other features—be performed by one machine tool. Alternatively, a CNC shear could do the shearing and a CNC punch press could punch the holes and slots.
The output is a set of cut sheets for each product. Some may go through the CNC press brake for bending, and the rest may go to other processes or straight through to final assembly.
Milled parts are made from a standard blank (ideally only one, as shown) in the CNC mill, which machines any variations for this product family. Similarly, the CNC lathe (or CNC screw-machine) makes all the turned parts for the family, ideally from a single size of bar stock.
Many factories use several CNC cut-off machines, which can be programmed to cut off bars, tubes, extrusions, coiled strip, or any long part that also has shorter versions. Hoffman’s plant uses several of them. Each time they’re used, they may reduce part variety from several types to one, which should save more overhead cost than the value of any material waste.
Mass-customized assembly does not need automation, which can be expensive and take a long time to implement. Manual techniques can mass-customize assembly on demand.
In the subassembly station, parts supplied by the kanban system are assembled according to instructions displayed on the monitor for each product. One standard fastener, dispensed through an autofeed screwdriver, accomplishes all fastening. Final assembly is also directed by a computer monitor that gives appropriate instructions for each product.
The Mass Customization Business Model
As a business model, mass customization offers an unbeatable combination of responsiveness and cost to deliver what customers want when they want it. Companies can achieve substantial cost advantages, by eliminating the costs of inventory, forecasting, purchase orders, expediting, kitting, setup, and inefficient fire-drill efforts.
Mass customization practices can substantially simplify supply chains—not just manage them—to the point where parts and materials can be pulled into production spontaneously without forecasts, manufacturing resource planning, purchasing approvals, waiting, or warehousing.
Mass customization enables manufacturers to be the first to market with new technologies and to efficiently mass-customize products for niche markets, countries, regions, industries, and individual customers. They’ll also see sales and profits grow by bringing in new sales for standard BTO products as well as for customized, derivative, and niche market products, while expanding sales to current customers.
Synergy With Build-to-Order
A new initiative for just mass customization may not have enough critical mass to justify all the necessary changes or to set up a new plant to do this. Fortunately, there is a natural synergy between mass customization and build-to-order (BTO) of standard products. They share the same flexible operations and spontaneous supply chain.
The main difference would be that BTO product orders would be specified by a predetermined product code in a published catalog or Web site. In contrast, mass-customized product orders would include unique information and/or customized dimensions.
This synergy can push the combined volume over the critical mass threshold necessary to justify implementing mass customization and enable the company to apply mass customization benefits to BTO products also.
To Explore More
The author goes into more detail about many of the principles and practices of mass customization in two books: Design for Manufacturability & Concurrent Engineering (CIM Press, 2010) and Build-to-Order & Mass Customization (CIM Press, 2008).
For more on kanban and breadtruck resupply systems, see www.build-to-order-consulting.com/kanban.htm.
A case study of Hoffman Engineering’s model is available online at www.build-to-order-consulting.com/ hoffman.htm.
David M. Anderson, a licensed Professional Engineer and ASME Fellow, is a consultant in mass customization and design for manufacturability. He holds a Doctor of Engineering degree from the University of California at Berkeley. He can be reached at firstname.lastname@example.org.