The Limits of Mass Customization

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MANUFACTURING/MARKETING

Is mass customization really the best way to deliver variety to consumers? Today, mass-customized products seem to be everywhere. Levi-Strauss sells custom-fitted jeans. Andersen Windows can build a window to fit any house. Consumers can get their names printed, sewn or embossed on nearly anything. But managers beware: Do not be seduced by the gaudy banner of mass customization. There are several ways to deliver variety, and mass customization may not always be the best.

So argues Paul Zipkin, professor of business at Duke University's Fuqua School of Business. Mass customization actually requires unique operational capabilities. Several elements have to work well — individually and together — to ensure that mass customization is a plausible business strategy. Those key capabilities are elicitation (a mechanism to interact with the customer and obtain specific information); process flexibility (production technology that fabricates the product according to the information); and logistics (subsequent processing stages and distribution that are able to maintain the identity of each item and deliver the right one to the right customer). Not all companies — or industries — will be able to master these capabilities.

Moreover, demand for customization is limited and likely to remain so. Current technology can support large-scale customization only for a few attributes of a few products. For mass customization to deliver real value, people must have sharply differing preferences for certain attributes. This signals opportunities for industries such as apparel, sports equipment and building accessories. But it also means that mass customization is not for every company.

Managers should seek opportunities to add value through variety, Zipkin advises. But before committing their companies to a mass-customization strategy, they need to carefully analyze the technology, demand and costs and benefits.

Paul Zipkin is a professor of business at Duke University's Fugua School of Business. Contact him at paul.zipkin@duke.edu.

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