Mass customization: The advantages and disadvantages

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What is mass customization

Mass customization is the practice of producing a product that can be customized – on mass – to the customer’s requirements. It seeks to bridge the benefits of mass production (which benefit from economies of scale), with bespoke production of individual items to order.

Making mass customization work: Key considerations

Successfully pulling off mass customization without costs spiralling – making the product prohibitively expensive – requires some careful consideration. 

Standardized dimensions for customization

A key to mass customization is identifying standard dimensions that can be customized. This is important because one of the challenges with bespoke products is agreeing on the changes and coordinating them within the firm. There are traditionally substantial overheads associated with deviations from standard practices. Deviations from the norm are much more likely to be associated with mistakes, confusion, and manufacturing difficulties. 

Establishing specific dimensions on which the product can be customized (while others that are fixed), allows practices to be established within the firm to meet the customization requirements, without incurring confusion or overhead. Procedures can be established for how to meet the varying customer preferences. While each product may be unique, the practices for making these products can be formalized and in turn standardized.

Which dimensions to allow customization on

The dimensions of your product that you will allow customization on is an important consideration. It is important to consider both the dimensions that customers will value and be willing to pay a premium for customization, while also carefully considering those features that will not significantly impact manufacturing costs. 

Sales processes with customizable options

After determining the dimensions on which the product can vary, it is important to create a sales process that easily allows these options to be selected, while avoiding the ability for customers to request other deviations. This could be as simple as predefined options that can be selected from when choosing the product, to a virtual experience that shows the customized product in real-time.

The key objective here is to avoid the possibility that customers accidentally choose the wrong options, while also ensuring that customers do not expect that they make further adjustments beyond the predefined options. While it may not seem like a minor change to request a permutation that is not available if this results in greater confusion, the possibility of mistakes, or having to manually make adjustments to the product, the ‘minor customizations’ may result in complications involved in making the product spiraling.

Automation sales and manufacturing channels

Company’s that successfully implement mass customization typically have strong connections between the sales process and the manufacturing process – potentially using automation to achieve the customization stages. This may be important to achieve the customizations, without associate high overheads and mistakes.

Made to order Vs. Modified to order

A final consideration important when adopting mass customization is the stage at which the customization will occur. One approach is to make the product to order – starting the manufacturing process once the order has been placed. Another approach is more in line with mass manufacturing, where the product (or at least a large proportion of it) is manufactured, with the customization occurring only at the final stage. 

The advantage of the made-to-order approach is that it allows a much larger component of customization in the goods – now it is possible to customize almost any part of the product. The key advantage of modifying a base product to order though is that it allows much lower turnaround times on the goods. By only conducting small modifications to an already finished product (potentially laser engraving a base product), it is possible to get the item out to customers with a much shorter delay – more in-line with mass-produced products. 

Advantages of mass customization

Match exact customer preferences

One of the key advantages of customized products is that it allows greater alignment between customer preferences and the products (while not associated with the high costs that bespoke products may entail).

More unique than standard items - provides reasons for customers to choose your offering

The greater match with customer preferences provides specific reasons for customers to choose your products – either increasing demand for your products or allowing you to charge a premium price. Mass customization thus allows you to differentiate yourself from other competitors – with it being difficult for firms that are not designed with mass customization in mind to copy or imitate your options. 

Disadvantages of mass customization

While mass customization provides opportunities for companies, and may better serve customers, it also has some limitations associated with the approach. 

Difficulty in holding stock

The first challenge of mass customization is that it makes it more difficult to hold stock. Depending on where you make the product customizations, you risk having to hold a large number of parts (or entirely produce the product from scratch each time – adding on delays in how quickly you are able to respond to customer orders). 

Challenges regarding how to handle returns

Another challenge associated with mass customization is how to handle returns. Depending on the customizations, it may not be possible to resell the times – either preventing you from offering free returns (discouraging some sales), or requiring you to accept the write-off associated with returned items that can’t be resold.

Cost involved in manufacturing each product individually

A final factor that needs to be carefully considered with mass customization is the costs involved. Adding customization steps can add substantial costs to operations – even if the dimensions are carefully designed. Before embarking on mass customization, it is important to carefully consider whether the premium price will outweigh the additional overhead costs associated with the customization steps. 

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