Part 8: A Balanced View: Conclusions and Key Learnings

By: Dominik Walcher / Fabrizio Salvador / Frank Piller

Whenever customers are not getting what they need, business opportunities are opened. When properly implemented, mass customization has the potential to provide a long lasting competitive advantage through better, more adapted products and services that can be sold at premium prices. This final article in the Customization500 series sums up the conclusions and key learnings.

In this series of articles, we have argued that mass customization can be regarded as a response to today’s opportunities of heterogeneous demands and the need of companies to become truly customer centric. When properly implemented, mass customization brings about across-the-board improvements in all dimensions of operations strategy: responsiveness, price, quality, and service.

Mass customization needs to be customized, too

But mass customization is neither a “one size fits all” approach nor the right strategy in all contexts. A recent survey by FedEx Corporation in the apparel industry found that more than 90% of the respondents agree that mass customization will play a significant role in the next five years. Yet mass customization implementation has not necessarily been positive in terms of its outcome. Levi’s Original Spin program (custom jeans) or Procter & Gamble’s Reflect brand (custom cosmetics) are prominent examples of mass customization efforts in large and powerful enterprises that failed to fulfill their promise and were thus terminated.

…even small improvements can reap substantial benefits.

In the previous part of this series, we have outlined a number of challenges that many companies face when introducing mass customization. We believe that these obstacles can be overcome by using a variety of approaches, and that even small improvements can reap substantial benefits. A trick is to remember that there is no one best way to mass customize: managers need to customize the approach of mass customization thinking in ways that make the most sense for their specific businesses.

Companies that have found individual means to implement methods and approaches to match these three capabilities are succeeding in their mass customization endeavor. Other companies are just working along one of these capabilities. This is a good strategy as well. Mass customization should be considered a journey rather than a destination. It is not about achieving a “perfect” state of mass customization.  What matters to most companies instead is to continuously increase their overall capabilities to define the solution space, to design robust processes, and to help customers navigate through available choices. A company may already profit tremendously from just implementing better, say, choice navigation capabilities to match diverse requests of customers not familiar with the product category.

Three fields for action

Mass customization has the potential to provide a long lasting competitive advantage through better, more adapted products and services that can be sold at premium prices. We also know that there are many difficulties associated with the pursuit of mass customization, but our research indicates that the problems lie mainly in the way it has been implemented so far. Indeed, our research has led us to the following conclusions:

• Successful mass customization must be understood as a process by which organizational capabilities are built: Solution space definition, robust value chain design, and choice navigation. These capabilities cannot be perfectly acquired: what matters is the capacity of the company to differentiate vis-à-vis its competitors in the level of these capabilities.

• Successful mass customization requires significant managerial attention, but also continued commitment. Since empirical evidence tells us that inertial forces in organizations are difficult to counter, the process by which these capabilities are implemented requires a strong sense of strategic vision from the management team. The journey is difficult, but no strategic advantage comes easily.

• Mass customization is not simply about increasing the number of choices: it is, or can be, a platform upon which the strategy of the firm can be built, and one of the main contributors to its success. There is not a standard platform for mass customization: Each company has to select the appropriate tools and approaches and to align them to its business and corporate strategy.

In sum, we believe that mass customization can be a source of competitive advantage for most firms. By increasing the flexibility of the organization and reinforcing the connections with its customers, a mass customization strategy can be one of the core components of a larger competitive strategy, and one of the central pillars of its sustainability. Whenever customers are not getting what they need, business opportunities are opened. And as our research has demonstrated, the pursuit of this goal yields great results. We invite you to enter the age of mass customization!

By Frank Piller; Fabrizio Salvador and Dominik Walcher