TOM - ALL Flashcards
(76 cards)
volume-variety (product-process) matrix
Hayes and Wheelwright 1979 continuous (high vol low var) line batch jobbing projects (low vol high var)
mass customization definition
Davis 1987
individually customizing goods and services for the mass mkt
modularity definition and how it can be used to avoid vol var tradeoffs
(and example!)
companies can mitigate the vol var tradeoffs by pursuing modularity in products by mixing and matching standard components
Economist 2001 - secret behind Dell’s built to order success is the restriction of its components to several key modules and stocking a variety of each
tech driving mass customization?
online adults and purchases
Economist 2001: tech reduces product life cycles and increases demand in product varieties
Ambrovich 2014: 75% of online adults had ordered products and services online for the reason of more options
visionary definition of mass customization
and da trap. . . . . . . . . . .
Hart 1995
give customers when they want where they want when they want it
This can cause a fall back into the volume-variety trap with rising costs and complexity (Economist 2009)
trying to be all things to all people will lead to competitive mediocrity, not CA (Kotha 1995)
do customers want variety?
stage of customer input
Yes!! Starr 1965
the earlier the involvement in the value chain, the more personalized the product is (Duray, 2003) - true?? iPhone
mass customization and mass production
Pine 1993
these are incompatible due to differences in organizational structure, management thought, methods of learning and customer interaction
MC requires transforming the industry from a push to a pull system (Economist 2001)
customer involvement at design versus assembly EXAMPLES
Lutron electrics: Lighting is made to order with systems and colors due to programming of the system
IKEA: because they are self assembly construction options are included that show different ways to produce variety
failures in mass customization
P&G: sell personalized women’s cosmetics, fragrances, shampoos called “Reflect”
“10,000 shades of lipgloss” - stretched company too thin and raised costs - failed after 6 years and 600million invested
Levi’s: customer order customized jeans delivered straight to door,,, unfeasible with the supply chain and too costly
success in mass customization
Dell and Swatch and Custom-Ink - modular approach, don’t offer infinite choices
Coca-Cola: invested 100million into Freestyle vending machine that allows customers to personalize their drink with over 150 sparkling and still options - success due to brand loyalty
benefits of data with mass customization
early feedback on shifting customer preferences, ideas for new products, less waste, strong loyalty with customers
helps retailers and manufacturers predict what combinations will be sold the most (Rijmenam 2017) (Boyd and Crawford 2012)
customer generated intellectual property (MC)
Berthon 2015
much of the value is added by the consumer .. firms exchange info with customers and base services off the information they provide (Loreal Makeup Expert, NikeID)
McKinsey presentation on MC Tech and big data
Gandhi et al 2013
previously modular approach but now individualized customization is in reach (visionary def a reality??)
social tech: social media paving way for better customization by allowing companies to analyze value customers attach to proposed or existing products
- Starbucks unicorn frappe - boosted sales greatly and ran out in store .. customers want an “instagrammable” drink
controlling for manufacturing costs: dynamic programability of robotic systems can switch between models and variants with little efficiency lost
use of JIT by software companies enables tracking individual orders and updating customers with realistic times
exchange of data? benefit or cost to consumers
Forbes (2016) people are increasingly more willing to hand over their data in exchange for a more personal product or service
but threat of data privacy - cyber security threats are large and the greatest ones are internal
mass made to order
Pine 2016
smartphones are the ultimate form of mass customization: the customer adds their own contacts, apps, and data and this becomes part of their identity
mass produced but then mass customized by the consumer
Supply chain (definition, directions things flow)
a network of the organization that link together to deliver goods and services to the customer
goods flow downstream
money (should) flow upstream
info flows both ways
MRP
MRP II
ERP
MRP - Material Requirement Planning - intended to understand the forecasted demand in the Master Production Schedule
MRP II - add in resource scheduling
ERP - Enterprise Resource Planning
info across the whole enterprise including online sales and procurement
organizations can easily exchange data along supply chain - need greater integration and management of resources
supports automated SCM but human resources needed to control for error
Toyota production system advantages and disadvantages with supply chain
advantages: mutual respect and knowledge
first their suppliers involved in product development and integrated into the JIT system
disadvantages: if break in supplier manufacturing, focal company suffers and suppliers are heavily invested so may be held at ransom
trust in supply chain relationships TPS
Kwon and Suh 2004
reduces transaction costs - less need to check and verify
the reputation of the partner affects the level of trust
Keiretsu
kito et al 2011
TPS relational orientation of the supply chain
business to business transactions
using the internet makes identifying and handling suppliers easier and companies are more likely to find niche suppliers
risks to global supply chains
rely on transport, bulk deliveries may cause delays, transit issues, and long lead times
vertical integration of supply chain examples
Ferdows et al 2004
Zara fast fashion: spain .. two weeks from design to sale
highly integrated to have control over schedule and capacities
JIT system: postponements to gain speed and flexibility (50% of cloth undyed)
short lifespan in stocks so customers are pressured to buy
They use technology and data to understand what is selling and remain on top of fads .. if something doesn’t sell well it isn’t a problem because they do not produce a ton and can just move stock later
Ford even owned the iron ores for the model T
innovations - supply chain
delivery: to door and fast (Amazon and M and S)
virtual products for online delivery: TV, news, tickets
3D printing: you might not even need supply chains
driverless vehicles: allows for autonomous delivery without people
shrinking supply chain: hyperlocal - useful in remote areas
movable factories: allows for wealth generation in areas that lack manufacturing skills and infrastructure