During the 1980-90’s manufacturers in the developed world were faced with saturated home markets and sophisticated customers. The markets were so large though, that they remained attractive to emerging competitors from developing countries, typically entering the market with low price and relatively unsophisticated products.
Many of the traditional manufacturers responded to this competition with the continuous-improvement school. In continuous improvement, the manufacturer drives the employees to find faster and more efficient methods to develop and make low-cost, defect free products to be able to deliver new products to the market quicker. This enabled mass producers to quickly respond to changing market preferences, and to continuously invent and use new technology.
These manufacturers were able to continually introduce new products with more features, increasing the variety offered to the customer. A new paradigm emerged from this – mass customization. According to the mass customization guru Pine, a mass customizer is a company that “develop, produce, market and distribute goods and services with such variety that nearly everyone finds exactly what they want at a price they can afford”.
However this move move to mass customization created conflicts in the different system that had been optimized for low cost and lean production with relatively low variety. Continuous improvement and mass customization require very different organisational structures, values, management roles and systems, learning methods, and ways of relating to customers. It also requires a completely different approach to product description as described above.
Despite the fact that so many companies are struggling with mass customization, most manufacturers are joining the quest. Mass customization offers a solution to the basic dilemma of whether to produce large volumes of standardized goods at a low cost or to decide to differentiated products in smaller volumes at a higher cost. The choice does not have to be made; a true mass customizer can be both a mass producer and an innovative specialty business.
CPQ in the era of Mass Customization
Mass customization requires a very different approach of selling products compared to traditional selling of standard products. The customers are offered a wide range of options of each product, and must be supported in the selection process. This site’s purpose is to look into the methods when implementing CPQ systems which are required when selling mass customized products.