Mass customization has become the need of the day primarily because direct-to-consumer retailing is now gaining momentum. The unprecedented popularity of customized products and services has opened doors for the new form of the business model, called mass customization. However, many firms fail to recognize the very essence of mass customization and end up affecting their businesses. So it is essential to get a grasp on the basics of mass customization and then prepare a productive and effective strategy to achieve the goals.
What is CPQ Mass Customization?
It is a systematic business idea that involves almost every single aspect of product selling. It includes development, production, delivery, and sale. Think of it as manufacturing shoes according to the feet size of the customer instead of asking the customer to select it from the available sizes. Therefore, it combines bespoke tailoring with mass production elements. No two items should be the same is the motto of mass customization.
Mass Customization - The Inevitable Future of Retail Industry
Understanding the core ides of mass customization would help companies prepare for and adapt to the changing trends of retailing. Mass customization requires companies to utilize the complex demands of consumers into a value creation opportunity. A one-size-fits-all formula cannot work anymore as times have changed drastically and so have the technologies used for products creation.
Why does Mass Customization work for Businesses?
Let's think about it. Why not?
Would consumers like to be treated individually? Would people want to get products tailored according to their requirements? Of course, they would!
The entire premise of mass customization is set upon making products tailor-made according to the demands of consumers. It isn't a stand-alone strategy for conducting business operations but an overall change in the organizational capabilities. So, when businesses turn to mass customization, they are switching to an entirely new technique of retailing and manufacturing.
Delivering customized products would be helpful for businesses in the long run because it will reduce inventory without affecting the supply chain. Companies will move from the conventional cash upfront inventory model to a more productive on-demand model that could also address overstock and reduce waste.
Moreover, mass customization will ensure a better experience for the consumers and CPQ solution helps preparing for the mass customization Future So, it is a win-win situation for both the producer and the consumer. Lastly, mass customization has and will continue to drive customer loyalty. It is bound to create substantial market differentiation for product tacticians.
Understanding the Techniques and Strategies
Mass customization's output is based entirely on a limited number of platforms and core components. For instance, if it is a watch, the internal mechanism of production would require the creation of a platform that is flexible enough to be customized for a wide range of personalized options. This would facilitate more significant stages of product creation. So, if a customer needs a watch, he/she will be able to choose from thousands of different colors and styles. However, the entire creation process will be based upon just a few time-keeping systems. Refraining from producing identical products is the main idea behind mass customization.
There are three key changes that a mass customization strategy is based upon:
- Flexible production systems enabled by information technologies for delivering more variety but at low cost
- Increasing the requirement for product versatility, innovation, and customization
- Expanding competition between industries while shortening product life cycles.
With these aspects in mind, companies can quickly switch from mass industries to the incorporation of individualistic production strategies.
Why Do Companies Fail?
Companies fail to gain new business from millennials because of two reasons. Firstly, companies cannot clearly define the dimensions that allow consumers to individualize their required products. This increases production costs and complexities. Failure in informing the customers about the limits of customization and realizing the most suitable limits for customers leads to unsuccessful mass customization.
Secondly, companies cannot shift their production system successfully from integrated processes to autonomous units that can be configured as per consumer demands. Companies cannot predict what customers may ask for, so they need to make a well-prepared system.
How to Prepare for Mass Customization?
There are many ways on how to achieve mass customization. Companies only need to strategize about every level of customization properly. They need to understand the degree of organizational transformation required mainly at the manufacturing process, also called decoupling point.
Also, the nature of customization has to be understood. Internal transformation is directly related to the creation of customer value because it is the initial point of customer involvement. So, companies need to identify the degree of organizational transformation required. In this regard, the level of customer involvement in the production cycle needs to be evaluated first as it plays a crucial role in determining the degree of customization.
Another critical variable is the way a product is differentiated. This eventually gives valuable insights into the processing of choice decisions. The point of customer involvement in determining the product specifications is directly related to the customization process.
Furthermore, determining the levels of mass customization is essential to prepare for the future. This includes design, fabrication, assembling, and usage. When customers are involved in the production cycle from earlier stages, the higher would be the customization level.
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