The Internet makes it possible to reach markets of size one. Just look at Amazon.com and the personalized page and the periodic emails that you get based on your past purchasing (or browsing) history. It is possible to order custom-made computers, music CDs or even dolls. In many ways, it is like going back in history! An extract from Gerber Scientific’s Mass Customization website [http://www.mass-customization.com]:
During the early days of humankind, everything was custom-made. In those days it was known as a craft. As humans’ inventiveness improved and the industrial revolution occurred, the world moved towards mass production. Now, craft and mass-production come together in a computerized, digital-based world via a trend known as mass customization.
Most websites currently still have no context when we visit them. For example, when we do a search, it would be useful to have the search engine remember what we have previously searched for and clicked on and thus understand the context (either interest or geography) so as to give us more relevant results. This way, we can think of the search engine becoming “My Search Engine” – learning with everything that we do. The switching cost now becomes very high, since we would have to re-train another search engine all over again. Thus, out of customisation and learning is born customer loyalty.
In manufacturing companies like Dell, it is important to have the building blocks to deliver quickly what the customer wants. Write Don Peppers and Martha Rogers in “Enterprise One-to-One: Tools for Competing in the Interactive Age”:
Customization occurs when an individually tailored product is delivered to a customer. Mass customization occurs when the process of customizing products becomes a routine. In order to become a mass customizer, a business must modularize its processes, so that it is not so much engaged in producing an end product or service as it is in producing elements of the product or service than can then be assembled in different combinations, based on what individual customers requestVisualize the process as the assembly of premanufactured units, not unlike Lego blocks.
On the software side, what makes this possible is a Configurator. It uses rules to continually update the options (restricting choice) based on what the customer is selecting. This in turn puts a great deal of pressure on the entire virtual supply chain, making it even more important to have information and transparency across the supply network. Options may need to be modified based on the availability (or non-availability) of certain parts in the chain in real-time, thus creating a “dynamic artery”. The ability to offer mass customisation can thus become a powerful weapon in e-business.