Monday, September 29, 2014
From Modular Design to Mass Customization
Nowadays, people's living standards continues to improve and the need of people is getting increasingly diversified. Instead of mere consideration on price, most people purchase a product according to their individual preferences. Therefore, manufacturers are competing more and more intensely, not only on price and adaptability but also on the variety of products, which are all driven by customer satisfaction.
Face with a variety of customer’s requirements, customization production is becoming more and more popular for a firm to achieve variety and high customer satisfaction. Traditional view may holds that individual customization must have cost a lot, yet the advent of mass customization address the tradeoffs between cost-saving and customization effectively. Its rapid and low-cost production of goods and services satisfies unique customer desires, accompanying with standardized high volume production. Modular design is one of the most efficient means to facilitate mass customization and I think it is the key to the success of mass customization.
Modular products refer to products assemblies and components that fulfil functions through the combination of distinct building blocks or modules. To put it simply, modular design is a form of standardization in which component parts are subdivided into modules that are easily replaced or interchanged. Due to standardization, it allows easier diagnosis and remedy of failures, easier replacement and simplifier manufacturing and assembly. Taking Dell as an example, Dell's competitive advantage is in its process strategy, which is mass customization. It spends most of its research budget on efficient installation and configuration of PCs, rather than on new computer parts. Based on its existing sourcing and production of components, Dell uses the component sharing modularity. By using modules, the product can be quickly assembled. With customized and order-based assembling, Dell not only meet the need of different customers but also enjoys a reduction on its total cost. Another case for modular design is Lego. With its simple products that consist of small colored bricks, Lego provides children not only the real toy but also the unique experience of fitting the parts together and make their own customized toy. Looking at the operation of IKEA, it is even more evident when you walk through the pickup district to find the components of your favorite furniture and then go home to construct products by yourself. Many people are fond of IKEA just because they love this kind of lifestyle, which develop an attachment or sense of pride to the finished furniture.
In such a rapidly growing society, advanced technologies is emerging at leaps and bounds. New and creative products almost springs out every day. As a result, there are increasing uncertainties for the companies to forecast the need of customers. Companies can suffer from correspondingly sales decline if there occurs a changing market trend. Therefore, using a different combination of modules allows for quick and easy customization, as well as high volume of production.