Review of order fulfilment models for Catalogue Mass Customization

Mass Customization (MC) is not a mature business strategy and hence it is not clear that a single or small group of operational models are dominating. Companies tend to approach MC from either a mass production or a customization origin and this in itself gives reason to believe that several operational models will be observable. This paper reviews actual and theoretical fulfilment systems that enterprises could apply when offering a pre-engineered catalogue of customizable products and options. Issues considered are: How product flows are structured in relation to processes, inventories and decoupling point(s); - Characteristics of the OF process that inhibit or facilitate fulfilment; - The logic of how products are allocated to customers; - Customer factors that influence OF process design and operation. Diversity in the order fulfilment structures is expected and is found in the literature. The review has identified four structural forms that have been used in a Catalogue MC context: - fulfilment from stock; - fulfilment from a single fixed decoupling point; - fulfilment from one of several fixed decoupling points; - fulfilment from several locations, with floating decoupling points. From the review it is apparent that producers are being imaginative in coping with the demands of high variety, high volume, customization and short lead times. These demands have encouraged the relationship between product, process and customer to be re-examined. Not only has this strengthened interest in commonality and postponement, but, as is reported in the paper, has led to the re-engineering of the order fulfilment process to create models with multiple fixed decoupling points and the floating decoupling point syste

Virtual-Build-to-Order as a Mass Customization Order Fulfilment Model

Virtual-build-to-order (VBTO) is a form of order fulfilment system in which the producer has the ability to search across the entire pipeline of finished stock, products in production and those in the production plan, in order to find the best product for a customer. It is a system design that is attractive to Mass Customizers, such as those in the automotive sector, whose manufacturing lead time exceeds their customers' tolerable waiting times, and for whom the holding of partly-finished stocks at a fixed decoupling point is unattractive or unworkable. This paper describes and develops the operational concepts that underpin VBTO, in particular the concepts of reconfiguration flexibility and customer aversion to waiting. Reconfiguration is the process of changing a product's specification at any point along the order fulfilment pipeline. The extent to which an order fulfilment system is flexible or inflexible reveals itself in the reconfiguration cost curve, of which there are four basic types. The operational features of the generic VBTO system are described and simulation is used to study its behaviour and performance. The concepts of reconfiguration flexibility and floating decoupling point are introduced and discussed

Consideration of the relevance of standard quality techniques in Mass Customisation

The business philosophy of Mass Customisation (MC) implies rapid response to customer requests, high efficiency and limited cost overheads of customisation. Furthermore, it also implies the quality benefits of the mass production paradigm are guaranteed. However, traditional quality science in manufacturing is premised on volume production of uniform products rather than of differentiated products associated with MC. This creates quality challenges and raises questions over the suitability of standard quality engineering techniques. From an analysis of relevant MC and quality literature it is argued the aims of MC are aligned with contemporary thinking on quality and that quality concepts provide insights into MC. Quality issues are considered along three dimensions - product development, order fulfilment and customer interaction. The applicability and effectiveness of conventional quality engineering techniques are discussed and a framework is presented which identifies key issues with respect to quality for a spectrum of MC strategies

Mass customization: fundamental modes of operation and study of an order fulfilment model

This research studies Mass Customization as an operations strategy and model. Opinions differ over whether MC should be a label for a specific business model in which customers select from pre-engineered product options, or whether it should be interpreted as a performance goal that has wider relevance. In this research it is viewed as the latter and a manufacturing enterprise is considered to be a mass customizer if it gives its customers the opportunity to have a product any time they want it, anywhere they want it, any way they want it and in any volume they want it, and at the same time brings the benefits that are associated with mass operations, in particular those of price and quality. In the literature MC is not one operations strategy but a family of sub-strategies and there are several classification schemes, most of which delineate the sub-strategies by the point along the value chain that customization takes place. Other than for one scheme for which correlations between technologies and MC types has been sought by means of a survey, no progress has been made in developing operations configurations models. Through the study of primary and secondary case studies several classification schemes are appraised and a new framework of five fundamental operations Modes is developed. The Modes are the kernel of a theory of MC, with the other elements being: - A model for Mode selection that uses four factors to determine when a Mode is suitable; - Indicative models of the information infrastructures of two Modes that demonstrate the Modes to be different and that they can be a foundation for configurations models; - A set of product customizable attributes that reveals the multifaceted nature of customization and extends the terminology of customization; - The delta Value concept that links the motivation for customizing attributes to differences between customers. A theory of MC is proposed, which postulates: - An MC strategy is relevant when there are differences across customers in how they value the configurations of customizable attributes; - There are five operational sub-strategies of MC; - The choice of sub-strategy for an enterprise is contingent on its organisation and its business environment. One of the five modes, Catalogue MC, is the Mode that is commonly associated with MC. It is the Mode in which all product variants are fully engineered before being ordered. A diverse set of order fulfilment models of relevance to this Mode are reviewed and organised into four types: fulfilment from stock; fulfilment from a single decoupling point; fulfilment from several decoupling points; and fulfilment from a floating decoupling point. The term floating decoupling point is coined to describe systems that can allocate a product to a customer wherever the product lies, whether it be a finished product in stock, a part processed product or a product that does not yet exist but is in the production plan. In the automotive sector this system has been called Virtual-Build-to-Order (VBTO) and in this research the generic characteristics of VBTO systems are described and key concepts developed, in particular the concept of reconfiguration flexibility. Discrete event simulation and Markov models are developed to study the behaviour of the VBTO fulfilment model. The non-dimensional ratio of product variety / pipeline length is identified to be a fundamental indicator of performance. By comparing the VBTO system to a conventional system that can fulfil a customer from stock or by BTO only, the role of pipeline fulfilment is identified and a surprising observation is that it can cause stock levels and average customer waiting time to be higher than in a conventional system. The study examines also how customer differences, in particular their willingness to compromise and their aversion to waiting, affect fulfilment and how fulfilment is dependent on reconfiguration flexibility

Fundamental Modes of Operation for Mass Customization

The concept of Mass Customization (MC) - producing customised goods for a mass market - has received considerable attention in the research literature in recent years. However the literature is limited in providing an understanding of the content of MC strategies (the organizational structures, process technologies, etc., that are best in a particular environment) and the process of MC strategies (the sub-strategy that an enterprise should select and how they should go about implementing an MC strategy). In this paper six published classification schemes of relevance to Mass Customization are reviewed. The classification schemes are applied to five case studies of enterprises operating in an MC environment. The limitations of the schemes are analysed and their failure to distinguish key characteristics is highlighted. Analysis of the findings leads to the development of a taxonomy of operational modes for MC. Five fundamental modes of operation for Mass Customization are identified. These modes are described and justified and their application is illustrated by contrasting the information requirements of two modes. The potential of these modes to provide the foundations for detailed configurations models is discussed

Configuring an open pipeline fulfilment system - a simulation study in an automotive context

Automotive producers are adopting multi-modal fulfillment models in which customers can be fulfilled by products from stock, by allocating as yet unmade products that are in the planning pipeline, or by building a product to order. This study explores how fulfillment is sensitive to several parameters of the system and how they interact with different methods for sequencing products into the production plan

Configuring an open pipeline fulfilment system - a simulation study in an automotive context

Automotive producers are adopting multi-modal fulfillment models in which customers can be fulfilled by products from stock, by allocating as yet unmade products that are in the planning pipeline, or by building a product to order. This study explores how fulfillment is sensitive to several parameters of the system and how they interact with different methods for sequencing products into the production plan

Intelligent pipeline control - a simulation study in the automotive sector

Automotive producers are aiming to make their order fulfilment processes more flexible. Opening the pipeline of planned products for dynamic allocation to dealers/ customers is a significant step to be more flexible but the behaviour of such Virtual-Build-To-Order systems are complex to predict and their performance varies significantly as product variety levels change. This study investigates the potential for intelligent control of the pipeline feed, taking into account the current status of inventory (level and mix) and of the volume and mix of unsold products in the planning pipeline, as well as the demand profile. Five ‘intelligent’ methods for selecting the next product to be planned into the production pipeline are analysed using a discrete event simulation model and compared to the unintelligent random feed. The methods are tested under two conditions, firstly when customers must be fulfilled with the exact product they request, and secondly when customers trade-off a shorter waiting time for compromise in specification. The two forms of customer behaviour have a substantial impact on the performance of the methods and there are also significant differences between the methods themselves. When the producer has an accurate model of customer demand, methods that attempt to harmonise the mix in the system to the demand distribution are superior

The automotive order to delivery process: how should it be configured for different markets?

The order-to-delivery (OTD) process in the volume automotive sector is important for automakers, dealers and customers. It affects the customer's experience with regard to receiving a vehicle that matches their requested specification in a reasonable time and the costs of the automaker in serving the market. OTD processes share similarities across major volume automakers. They are substantial in scale with typically a very large number of vehicle variants and involve interactions between customers, dealers and the automaker. Additionally, automotive markets are heterogeneous. Some customers have little tolerance to compromising on specification and/or waiting for a vehicle whilst others are more tolerant on one or both attributes. This study examines how the OTD process should be configured for different markets. A representative simulation model is used with designed experiments and an innovative statistical analysis method to study the impact of nine OTD configuration factors in three different markets. The study shows that market attributes have a substantial bearing on the dominant modes of fulfillment, on customer-centric performance metrics and on automaker costs. The findings have strong implications for automakers regarding how they configure their OTD processes for different markets and whether they focus on upstream, pre-assembly factors and/or downstream post-assembly factors. This is the first study to use a comprehensive and detailed OTD process model, incorporating a wide range of configuration factors, and assess a full range of performance metrics in a designed simulation study