MASS CUSTOMIZATION SOLUTION SPACE DESIGN PROCESS.

*
CONFIGURATORS AND USER CO-DESIGN TOOLKITS

(DRAFT version. February 2010)

Martín Zangitu and Eduardo Castellano

Ikerlan-IK4 Technological Research Center.
Paseo JM Arizmendiarrieta, 2. Arrasate-Mondragón, 20500.
{mzangitu, ecastellano}@ikerlan.es

1. MASS CUSTOMIZATION

1.1 Introduction to the New Production Paradigm

The concept of mass customization was first expressed in Toffler’s book Future Shock,
in which he predicted that future manufacturing enabled by information technology would be
able to provide customised products in a large scale with little or no extra cost (Toffler, 1970).
The term ‘mass customization’ was first coined by Davis (1987) in his book Future Perfect, in
which he described a trend where companies sought to micro-segment markets and offer
unique products and services to customers. It is Pine et al.’s Harvard Business Review paper
(Pine et al., 1993) and Pine’s book (Pine, 1993) that popularised the concept of mass
customization and ignited a wave of academic research and industrial experimentation. In
their work, mass customization was defined as the ability to provide individually designed
products and services to every customer through high process agility, flexibility, and
integration.

Many authors propose more practical definitions by describing mass customization as

a system that uses information technology, flexible processes, and organizational structures
to deliver a wide range of products and services that meet specific needs of individual
customers at a cost near that of mass-produced items (e.g., Hart, 1995; Tseng and Jiao,
1996; Da Silveria et al., 2001). According to Chen et al. (2009): “…in general, mass
customization can be described as a production paradigm that tries to combine the benefits
of craft production of pre-industrial economies and mass production of the industrial
economies, aiming to deliver products and services that best meet individual customers’
needs with near-mass production efficiency”.

One essential feature that differentiates mass customization from mass production is
that customers are actively involved in the value creation process in mass customization
(Duray, 2002; Piller et al., 2004). In mass production, customers are subjects to be observed,
their demand is to be forecasted, and their attention and purchasing decisions are to be
studied, influenced or even manipulated, as manufacturers strive to push their products into
the market. In mass customization, customers are no longer passive recipients of products or
services that are designed and produced for a nominal customer. Instead, each customer
has his or her individual identity and provides key inputs in designing, producing, and
delivering the product or service based on his or her individual preferences (Chen et al.,
2009). By synthesising relevant literature, Table 1 summarises the key differences between
mass customization and mass production.

*
The research leading to these results has received funding from the European Community's Seventh
Framework Programme (FP7/2007-2013) under grant agreement n° NMP2-SL-2009-22933: Resilient
Multi-Plant Networks (REMPLANET).
1
 Table1. Mass production vs. Mass Customization. Source: Chen et al. (2009)

Mass customization is a new paradigm based on creating variety and customization

through flexibility and quick responsiveness. It moves the focus from buying on price
(because all goods and services appear to be much the same), to one of buying on satisfied
needs and wants, at a competitive and affordable price. A company engaged in mass
customization actually seeks to fragment the market through economies of scope. This is in
contrast to a mass producer who seeks to consolidate and reduce choice through economies
of scale. At its heart, mass customization has a Dynamic System Feedback Loop that
generates the demand for a multitude of products and services at an ever increasing
frequency (Pine, 1993). The diagram of Pine illustrates the re-enforcing loops of processes
technology and product technology:

Figure 1. The emerging system of mass customization. Source: Pine (1993)

2
1.2 Mass Customization Strategies
In order to fully understand the implications of a mass customization system, its
characteristics and capabilities must be examined. Different companies adopt different
methods or strategies for producing mass customized products. Mass customizers can be
classified based on different characteristics, one of them is the point of customer involvement
in the design process. Knowing the point of the customer involvement is one of the key
elements in defining the configuration of processes and technologies that must be used to
produce mass customized product (Chandra and Kamrani, 2004; Inala, 2007).

1.2.1 Lampel and Mintzberg´s Model

Figure 2. Mass customization strategies. Source: Lampel and Mintzberg (1996)

• In pure standardization customer has no direct influence on any stages of value chain
and ist more to do with a push system. Typical example is Ford´s choice of car color.
• Segmented standardization targets small group of customers. It has better choices to
offer than pure standardization; however customer does not have direct control over
design or production.
• A standardized customization strategy involves the customer at the point of assembly
and delivery. Here standard products are modified to customer specifications using a
list of standardized options.
• A tailored customization strategy involves the customer at the point of fabrication.
With this strategy, standard products are modified or altered to meet specific needs of
a particular customer.
• A pure customized product is one that includes the customer throughout the entire
production cycle. This strategy provides products that are completely unique to
individual customer specifications.

1.2.2 Gilmore and Pine´s Model

Gilmore and Pine (1997) suggest four approaches to customization namely
collaborative, adaptive, cosmetic and transparent. Collaborative being highly customized and
transparent being the least.

3
 Figure 3. Four approaches to customization, Source: Gilmore and Pine (1997)

• Collaborative customization involves a dialogue with the customer in order to identify

and fulfill their needs. Gilmore and Pine (1997) use the example of Paris Miki eye
glasses to illustrate this type of customization. The Mikissimes design system
captures the face of a customer and analyses various attributes and customers
choice of design and looks. The system then recommends different sizes and shapes
of lens and the customer can collaborate with the optician in order to decide the
desired lens. Looking at the customization of this product, it can be considered as
standardized customization, in the context of Lampel and Mintzberg (1996) model, as
the customer chooses from a standard set of components but assembles them
according to his will. However all the examples that fall under standard customization
cannot be classified as collaborative. In the opposite case, a pure customization
requires a collaborative approach, that probably is more complicated than the glasses
case.

• Adaptive customizers present standard products that can be altered by the user
according to their needs. Lutron Grafik (Gilmore and Pine, 1997) lighting system is an
example which allows user to have different light effects by merely changing the
programmed settings. Another case is that rafered to vending machines.

• Cosmetic customization provides standard products differently to different customers.

Typically, customization is provided in the distribution and use stages. It’s again
similar to segmented customization that targets clusters of customers. Most common
examples are T-shirts with special prints (Inala, 2007).

• Transparent customization fulfills the needs of customers in a way that the customer
may not even know that the product has been customized. It is implemented by
closely observing the customer requirements. Since the same product is offered to all
the customers it can be considered as pure standardization.

1.2.3 Amaro´s Model

Amaro, et al. (1999) discusses a framework for classifying non Make-to-Stock (MTS)
companies and the role of customization as a competitive advantage. The non MTS
companies are classified into Assemble-to-order (ATO), Make-to-Order (MTO) and Engineer-
to-order categories (ETO).

In ATO, a number of standardized parts are assembled in different variants according

to the choice of the customer. It is similar to standardized customization suggested by
Lampel and Mintzberg (1996). In MTO, an order is manufactured only after the receipt of a
4
customer order. In some cases material is purchased after the receipt of the order. The
degree of customization is considered greater than ATO. In ETO, each customer order is a
unique set of bill of materials and part numbers. The degree of customization is higher than
MTO.

This being a broad classification, Hill (1993) redefined the existing categories and
added a few new ones to the above making a total of six different types. Design-to-order
(DTO), Make-to-Print (MTP), Engineer-to-Order (ETO), Make-to-Order (MTO), Assemble-to-
Order (ATO) and Make-to-Stock (MTS).

DTO companies design and manufacture a product to meet requirements of a

customer. In MTP, products are produced in line with a given drawing. Lead time include only
raw materials purchase, supply, manufacturing but not design. In ETO, changes to standard
products are offered to customers and only made to order. Lead times include relevant
elements of engineering design and all manufacturing. MTO manufactures a standard
product only on receipt of a customer order. In ATO, components and sub assemblies are
standard with the receipt of an order; the required parts are assembled to order. MTS is
based on the sales forecast goods are manufactured and is equivalent to mass production.

Amaro, et al. (1999) proposed a new taxonomy for non MTS companies on basis of
three major dimensions. The first one being product customization which covers pure
customization, tailored customization, standard customization and non customization. Non
customization is more or less a standard part but is not MTS, according to him for expensive
goods. The second dimension is the company responsibility, the third being activities after
receipt of order. The company responsibility is discussed in terms of design, specification,
purchasing and the activities after receipt of order consist of delivery, assemble, processing,
purchasing, routing, specification, design. These three dimensions are used to develop 11
types of non MTS companies comprising of 4 types of ETO companies, 5 types of MTO and
2 types of ATO.

Figure 4. Framework for non make-to-stock companies. Source: Amaro, et al. (1999)

The eleven categories in the new taxonomy appear excessive and lead to confusion.
To the existing taxonomy he adds 4 additional attributes namely the number of customers,
5
nature of the relationship with the customer, the number and type of usage materials, the
nature of buying process. Though these have been proposed, they have not been
incorporated in the topology (Inala, 2007).

1.2.4 Duray´s Model

Duray, et al. (2000) model classifies mass customizers based on customer involvement
and product modularity. This classification argues that “mass” in mass customization cannot
be achieved without modularity (Duray, et al., 2000).

Pine (1993) stated that achieving true mass customization needs modularity in
production. Baldwin and Clark (1994) argued that modularity allows achieving economies of
scale and scope across product lines. McCutcheon et al. (1994) suggested that modular
product design would provide variety and speed up the process by reducing delivery times.

Modularity is the concept of decomposing a system into independent parts or modules

that can be treated as logical units (Jiao and Tseng, 1999). By using a modular approach, a
product is designed such that part of the product is made in volume by standardized
components. Customization is then achieved through a combination or modification of
modules. A range of modularity types can be considered for different mass customizers
(Tezcanli, 2006). Modularity is viewed by Ulrich and Tung (1991) as depending on two
characteristics of a design : (1) Similarity between the physical and functional architecture of
the design, and; (2) Minimization of incidental interactions between physical components.

Next figure shows the customer involvement and modularity in the Duray´s Model value
chain.

Figure 5. Customer involvement and modularity in value chain. Source: Duray, et al. (2000)

Duray (2002) discusses that the types of manufacturing systems applied for mass
customization would vary between traditional manufacturing and custom product
manufacturing systems. Emphasis is given on the point that a standard manufacturer and
custom manufacturer can expand his product line with mass customization. However
approaches to mass customization are different. Duray’s framework (Duray et al., 2000;
Duray, 2002) presents 4 types of mass customizers namely fabricators, involvers,
modularizers and assemblers.

6
 Figure 6. Four types of mass customizers. Source: Duray (2002)

• The first group is called the fabricators, involve customers and modularity in the
design and fabrication stages. This group resembles pure customization. The type of
modularity involved is often cut to fit or component sharing.

• Group 2 has customer involvement in design and fabrication stages but uses
modularity in assembly and delivery stages. They are called the involvers. Modularity
in assembly and delivery stages means that no new modules are fabricated for the
customers. Involvers get hold of greater economies of scale than fabricators but
maintain high customer involvement.

• Group 3 involves the customers in assembly and delivery stages but apply modularity
in design and fabrication stages. They are called the modularizers, most often
component sharing occurs here.

• Group 4 are called assemblers, they bring customer involvement and modularity in
assembly and delivery stages. Assemblers closely operate as mass producers. But
they provide more choice than mass producers which customers perceive as
customization.

This model is different from Gilmore and Pine (1997) classification in a way that it has
modularity as one of the dimensions and has not included service as a mass customization
technique.

1.2.5 Da Silveira’s Model

This model (Da Silveira et al., 2001) combines some of the characteristics of the
previous models.

7
 Table 2. Eight generic level of mass customization. Source: Da Silveira et al. (2001)

1.2.6 MacCarthy´s Model

MacCarthy, et al. (2003) derives five modes of mass customization based on three
attributes and six processes that are fundamental to mass customization, however all the
permutations are not meaningful.

Table 3. Classification comparison. Source: MacCarthy, et al. (2003)

8
 • Mode A: Catalogue mass customization: Customers select from a pre engineered
catalogue of variants and products are manufactured by order fulfillment activities.

• Mode B: Fixed resource design per order: The order fulfillment process is standard,
but the customer order is engineered to a customer specific product. Thus it is
necessary that the product development process is aware of the process capabilities.

• Mode C: Flexible resource design per order: The order fulfillment process is flexible
and engineering of customer specific product is possible. In both the above two cases
repetition of order is not expected.

• Mode D: Fixed resource call off mass customization: It is same as mode B except
that repetition of orders is anticipated.

• Mode E: Flexible resource call-off mass customization: Same as mode D except that
order fulfillment is flexible.

1.2.7 Rudberg and Wikner’s Model

The decoupling point (DP), also known as the customer-order decoupling point
(CODP) (Hoekstra and Romme, 1992), the demand penetration point (DPP) (Christopher,
1998) or the order penetration point (OPP) (Olhager, 2003), is the position in value chain that
separates those activities that are forecast-driven from those driven by customer orders.

Figure 7. The productivity-flexibility trade-off and the positioning of the CODP. Source: Rudberg and Wikner
(2004)

The positioning of the CODP in mass customization involves identifying the optimal
balance between the productivity and flexibility forces. The further downstream in the value-
adding material flow that the CODP is positioned, the higher the degree of emphasis on
productivity in operations, therefore price (cost) is normally the major competitive priority. On
the contrary, by positioning the CODP further upstream a company can achieve a higher
degree of flexibility meeting customers’ specific requirements. As such, CODP’s are used to
classify value-adding activities in terms of customer demand information, which in turn
highlights the need for different management approaches depending on whether the
activities are upstream or downstream of the decoupling point (Rudberg and Wikner, 2004).

A literature review by Rudberg and Wikner (2004) reveals that four CODP’s are most
frequently used: Engineer-to-order (ETO), Make-to-order (MTO), Assemble-to-order (ATO)
and Make-to-stock (MTS). The further downstream the CODP is positioned the more of the
value-adding activities must be carried out under customer order uncertainty (speculation),

9
and the further upstream the CODP is positioned the more activities can be based on
customer order commitment, i.e. certain information.

Figure 8. The typical sequential approach to the CODP concept. Source: Rudberg and Wikner (2004)

Rudberg and Wikner (2004) recognize that in the sequential approach, no difference is
made between production- and engineering-related activities. In order to integrate
engineering resources with operational processes, they developed an approach based on
two dimensions: Engineering and Production. The production dimension covers the
traditional CODP’s related to the material flow (MTO, ATO and MTS). The engineering
dimension covers a continuum with two extremes. One extreme point in the engineering
dimension is the situation when a new product (concept) is designed and engineered to order
(ETO). The other extreme point in the engineering dimension depicts the situation when a
product is designed before the enterprise faces actual customer demand, which could be
interpreted as if the product design is already ‘in stock’.

In their model, several pairs [engineering, production] represent different levels of

customer involvement either in the engineering dimension or in the production dimension.
The authors (Rudberg and Wikner, 2004) mention an example that clarifies the interest of
their approach: In a typical mass customizer producing a modular product, most modules are
standard units produced to forecast, but some modules are customer specific wherefore
engineering activities must be performed before the final product is assembled to order. The
situation cannot be classified as traditional ETO since most of the products’ units are
produced to forecast, and not as traditional ATO since engineering activities are involved.
However, using a two-dimensional CODP makes the classification and analysis more
straightforward and easier to communicate. In this case, the company can be classified as
[ATOED, ATOPD] with, for example, CODPED=8% and CODPPD=20% (the percentages
represent the fraction of the lead-time being customer order driven in each respective
dimension).

10
 Figure 9. The two-dimensional CODP space. Source: Rudberg and Wikner (2004)

The CODP pair [ETSED, MTSPD] is an extreme point where both engineering and
production activities are carried out without customer involvement (i.e. pure standardization).
At the other extreme is the [ETOED, MTOPD] where both engineering and production activities
are performed according to customer specifications (i.e. pure customization).

Two-dimensional CODP makes the CODP a suitable tool for not only analyzing
production, but also classifying enterprises performing engineering adaptations, especially
those enterprises striving toward mass customization (Rudberg and Wikner, 2004).

Figure 10. Traditional CODPs in terms of production and engineering CODPs. Source: Rudberg and Wikner
(2004)

11
1.2.8 Kok’s Model
The production information flow (customer order signal) initiates and controls the
materials flow through the life-cycle phases (concept, design, construction). Winch (2003)
determines the following four generic production strategies:

Figure 11. Production strategies and process flows. Source: Winch (2003)

• Concept-to-order (CTO), where the customer (usually called a client in this

context) enters at the start of the information flow – nothing happens until the
client initiates production.

• Design-to-order (DTO), where the firm has already a basic product concept, but
significant engineering design work is performed for that particular
client/customer.

• Make-to-order (MTO), where there is a fully detailed design, which can be

configured to suit a customer’s particular requirements (MTO/C) or where no
additional design work needs to be done, but the materials flow does not start
until the customer places an order.

• Make-to-forecast/stock (MTF), where the product is produced for stock and sold
after it is manufactured or, sometimes, during manufacture.

Kok (2007) combined Winch (2003) and Rudberg and Wikner (2004) approaches to
obtain, related to construction industry, the following CODP model:

12
 Figure 12. Customer-order decoupling points in construction. Source: Kok (2007)

1.3 Key Factors for Success of a Mass Customization System

According to Chen et al. (2009), strategically, there is an inherent conflict within mass
customization as its name suggests and as many critics rightly claim: Mass implies
aggregation and repetition, while customization means individual and one-of-a-kind.
Traditionally, companies compete either on mass via high efficiency and low cost or on
customization by offering differentiated solutions and charging monopoly premiums.
Combining mass and customization into a single strategy risks saddling the company in a
dilemma where competitive advantage gets lost on both ends. Operationally, there are
conflicts between different performance objectives in mass customization. Under the
customer-centric philosophy, customers’ pull is the ultimate driving force for mass
customization (Tseng and Piller, 2003). However, customers’ needs are usually diverse and
irregular. The diversity of customer needs requires manufactures to offer high product
variety, which often leads to high component variety, large numbers of suppliers, and high
administrative complexity. The irregularity of individual customers’ needs means demand
unpredictability and instability. As a result, production planning becomes very difficult and
ineffective, leading to either resource under-utilisation or shortage. Furthermore, as the value
chain in product customization is driven by customers’ ‘pull’ instead of manufacturers’ ‘push’,
delivery lead time becomes part of customers’ waiting time. Customers’ increasing demand
for responsiveness further aggravates the difficulty to simultaneously achieve high efficiency
and high quality of customization.

Although conflicts abound and usually assume different forms, ultimately they can be
accounted for by the opposing preferences between manufacturers and individual
customers, both of whom have to make trade-offs in seeking of a customised solution with
superior value propositions. With customers actively integrated into product customization,
tradeoff-making needs to be done in a collaborative way so that customers’ needs could be
well matched with manufacturers’ capabilities. One critical issue in mass customization is
how manufacturers and individual customers could work collaboratively and resolve conflicts
effectively for mutual benefits (Chen and Tseng, 2005; Chen et al., 2009).

13
 The success of a mass customization system depends on several crucial factors.
These factors discussed below can be analyzed with respect to four main categories:
customer sensitivity, process amenability, competitive environment, and organizational
readiness (Hart, 1995).

1.3.1 Customer Sensitivity

Customer demand for individualized and customized products must exist for the
success of a mass customization system and customers´ demand for customized products is
dependent upon two main factors. The first, degree of sacrifice the customer is willing to
make for the customized product. It involves how much the customer is willing to pay and
how long she/he is willing to wait. The second, the firm´s ability to produce according to
customer specifications, within a reasonable time and cost. The balance between these two
factors determines the success of the mass customization system.

The drive for mass customization needs to maintain its customer focus. Unjustified
variety not only causes unnecessary cost, but also creates customer relation confusion.
From a customer’s point of view, the economic justification of mass customization lies in the
availability of more choices that could potentially best fulfil the customer’s individual-specific
needs with slightly or no extra payment. However, there are some mediating factors. Choice
itself does not mean value but only a potential. Choices are associated with tradeoffs, which
may not be a pleasant experience to customers and could result in dissatisfaction or even
distress. Huffman and Kahn (1998) points out that there is a thin line between mass
customization and mass confusion.

According to Piller et al. (2004), with customers integrated into value creation in the
customization process, companies gain access to more accurate information about market
demand and can postpone some activities until an order is placed. As a result,
manufacturers can reduce, if not eliminate, expensive inventory of finished goods. Also, by
producing in response to real market demand, manufacturers can avoid using costly
marketing techniques like sales discounts to clear unpopular products. In a highly
competitive and volatile marketplace, the cost of inaccurate forecast could be very
significant.

Furthermore, customer loyalty can be enhanced via customization because companies

are able to interact with each individual customer directly. The information gained through
customer interaction also provides valuable insight into customers’ latent needs and can
guide future product development (Kotha, 1995; Piller et al., 2004).

1.3.2 Process Amenability

Process amenability is very important to the development of a mass customization
system. This category encompasses several areas including enablers, product design, and
production design. Technological and organizational enablers include advanced
manufacturing technology and information technologies that must be avalaible for the
implementation of a mass customization system.

Technological revolutions enable new ways of organizing production activities and

doing business in general. Flexible manufacturing systems allow manufacturers to quickly
adapt to changes in product variety, volume, and delivery schedule without incurring high
penalty in terms of cost and lead time. Information technologies like internet and
telecommunication systems establish efficient channels for companies to reach widely
dispersed population and in the meanwhile interact directly with each individual customer.

14
 With respect to the product and production design, products must be designed to be
customizable. In other words, the firm must have acess to information concerning individual
needs and furthermore they must have processes in place to translate these needs into
actual specifications (Hart, 1995). But customers may not know what they really want. Need
is a term with contextual connotations. It is subject to influences of the social environment,
human emotions, and other factors that are difficult to be captured. Customers are often
unable to articulate their needs for a customised product. There is an asymmetry between
customers and manufacturers in terms of information and knowledge. Customers may fail to
understand or appreciate manufacturers’ offerings even when the customised offer fulfils
their articulated preferences.

Consequently, much of mass customization research is devoted to capturing customer

requirements and transformation of these requirements to product design manufacturability
(Tseng and Jiao 1998).

1.3.3 Competitive environment

Market conditions must be appropriate to support a competitive environment. In this
case, timing of the development of a mass customization system is a crucial factor. Market
turbulence as defined by instability and unpredictability of demand is very important in
determining the right time to employ a mass customization system. The greater the market
turbulence, the greater the potential customer need for variety and customization (Pine et al.
1993).

As customers become increasingly empowered and globalisation gains momentum,

companies across many industries are faced with local rivals as well as competition from
abroad. Product variety is exploding while product life cycle is shortening. As a result, many
companies operating under the mass production doctrine of economies of scale find it
increasingly difficult to amass enough volume, effectively differentiate from competition,
accurately forecast demand or plan production. Many manufacturing firms are operating with
more frequent orders, but with smaller volume of each order.

Another important consideration of time is being the first to develop a mass

customization system in any particular industry. It allows the firm to gain a competitive
advantage, besides being innovative and customer-driven (Da Silveira et al. 2001). By
adopting mass customization, Dell Computer has gained the so-called first-mover advantage
and maintained high profitability and growth in a hyper-competitive industry for a long period.
Other prominent cases include Motorola’s customised pagers, Adidas Mi customised shoes,
Hewlett Packard’s printers, etc.

However, as a mass customization is increasingly becoming more common, there are

fewer opportunities for starting first. Competition is shifting towars greater focus on improved
customization of most valuable features.

1.3.4 Organizational Readiness

Organizational readiness has to do with attitudes, culture and resources of the firm.
Foremost, the firm´s leadership capability is an important consideration. It must be
enlightened, open to new ideas and aggressive in the pusuit of competitive advantage (Hart,
1995), and promote a culture that emphasizes knowledge sharing trough the development of
networks ans new product and process technologies. This type of culture is very important in
developing the firm´s ability to translate customer demans into products and services,
specially since mass customization is a chain based concept (Feitzinger and Lee, 1997). Its
success greatly depends on the linked network and readiness of suppliers, manufactures ans
retailers. Mass customization and technologies that are used to enable it require from a
15
manufacturer, abilities to adapt to new requirements. Knowledge assumes a greater role
than skills.

1.4 How to Make Mass Customization Work

Fabrizio Salvador, Pablo Martin de Holan and Frank Piller (2009) have identified three
common capabilities that determine the fundamental ability of a company to mass-customize
its offerings (solution space development, robust process design and choice navigation), and
various tools and approaches which are available to help companies develop those
capabilities.

Figure 13. Capabilities that determine the fundamental ability of a company to mass-customize its offerings.
Source: Salvador et al. (2009)

1.4.1 Solution Space Development

According to Salvador et al. (2009), a mass customizer must first identify the
idiosyncratic needs of its customers, specifically, the product attributes along which customer
needs diverge the most. This is in stark contrast to a mass producer, which must focus on
serving universal needs that are ideally shared by all target customers. Once that information
is known and understood, a business can define its “solution space,” clearly delineating what
it will offer—and what it will not. Obviously, correlating heterogeneous customer needs with
differentiated product attributes, validating product concepts and collecting customer
feedback can be costly and complex, but several approaches can help.

The first is to provide customers with innovation toolkits, customers can by themselves
translate their preferences directly into a product design, highlighting unsatisfied needs
during the process. The resulting information can then be evaluated and potentially
incorporated by the company into its solution space. When Fiat S.p.A. was developing its
retro, award-winning Fiat 500, for example, the automaker created Concept Lab, an
innovation toolkit that enabled customers to express their preferences freely regarding the
interior of the car long before the first vehicle was built. The company received more than
160,000 designs from customers—a product-development effort that no automaker could
replicate internally. And Fiat allowed people to comment on others’ submissions, providing a
first evaluation of those ideas (Salvador et al., 2009).

After a company has collected data about its customers’ needs, it has to interpret and
render that information in the form of product concepts that customers can then review. But
the sheer number of prototype variants that might be generated can make the process
16
daunting. Consequently, some companies have implemented an approach called “virtual
concept testing”. For example, adidas AG, used to produce more than 230,000 footwear
samples every season to sell an assortment of 55 million sneakers distributed among more
than 10,000 SKUs. But through the use of My Virtual Model technology, adidas has been
able to replace many of the physical prototypes with virtual ones that merchandisers can
then sample on their virtual models (Salvador et al., 2009).

In developing a solution space, companies should consider incorporating data not just
from current and potential customers but also from those who have taken their business
elsewhere. For example, information about products that have been evaluated but not
ordered. Such data can be obtained from log files generated by the browsing behavior of
people using online configurators. By systematically analyzing that information, managers
can learn much about customer preferences, ultimately leading to a refined solution space. A
company could, for instance, eliminate options that are rarely explored or selected, and it
could add more choices for the popular components (Salvador et al., 2009).

1.4.2 Robust Process Design

According to Salvador et al. (2009), a mass customizer also needs to ensure that an
increased variability in customers’ requirements will not significantly impair the company’s
operations and supply chain. For this, the business needs a robust process design—the
capability to reuse or recombine existing organizational and value-chain resources—to
deliver customized solutions with near mass-production efficiency and reliability. But how can
companies reach that state?

Salvador et al. (2009) state that one possibility is through flexible automation. Although
the words “flexible” and “automation” might have been contradictory in the past, that’s no
longer the case. In the auto industry, robots and automation are compatible with previously
unheard-of levels of versatility and customization. Even process industries (pharmaceuticals,
food and so on), once synonymous with rigid automation and large batches, now enjoy levels
of flexibility once considered unattainable. Similarly, many intangible goods and services also
lend themselves to flexible automated solutions, frequently based on the Internet (Salvador
et al., 2009).

A complementary approach to flexible automation is process modularity, which can be

achieved by thinking of operational and value-chain processes as segments, each one linked
to a specific source of variability in the customers’ needs. As such, the company can serve
different customer requirements by appropriately recombining the process segments, without
the need to create costly ad-hoc modules. BMW’s Mini factory, for instance, relies on
individual mobile production cells with standardized robotic units. BMW can integrate the
cells into an existing system in the plant within a few days, thus enabling the company to
adapt quickly to unexpected swings in customer preferences without extensive modifications
of its production areas (Salvador et al., 2009).

To ensure the success of robust process designs, companies need to invest in

adaptive human capital. Specifically, employees and managers have to be capable of
dealing with novel and ambiguous tasks to offset any potential rigidness that is embedded in
process structures and technologies (Salvador et al., 2009).

1.4.3 Choice Navigation

Lastly, Salvador et al. (2009) state that a mass customizer must support customers in
identifying their problems and solutions while minimizing complexity and the burden of
choice. It is important to remember that when a customer is exposed to myriad choices, the
cost of evaluating those options can easily outweigh the additional benefit from having so
17
many. The resulting syndrome has been called the “paradox of choice” (Schwartz, 2003), in
which too many options can actually reduce customer value instead of increasing it. In such
situations, customers might postpone their buying decisions and, worse, classify the vendor
as difficult and undesirable. To avoid that, a company can provide choice navigation to
simplify the ways in which people explore its offerings (Salvador et al., 2009).

One effective approach is “assortment matching,” in which software automatically

builds configurations for customers by matching models of their needs with characteristics of
existing solution spaces (that is, sets of options). Customers then only have to evaluate the
configurations, which saves considerable effort and time in the search process. Using the My
Virtual Model software, for example, customers build avatars of themselves by selecting
different body types, hair styles, facial characteristics and so on. From that information, the
system can then recommend items out of the full assortment of a given online merchant
(Salvador et al., 2009).

But customers might not always be ready to make a decision after they’ve received
recommendations. They might not be sure about their real preferences, or the
recommendations may not appear to fit their needs or taste. In such cases, software that
incorporates fast-cycle, trial-and-error learning can help customers interactively conduct
multiple sequential experiments to test the match between the available options and their
needs. Consider the online shoppers at 121Time.com, a leading provider of mass-
customized Swiss watches. Those consumers might have a general idea of what they want,
but while using an online configurator to play around with various options, combining colors
and styles, they can actually see how one choice influences another and affects the entire
look of a watch. Through that iterative process, they learn about their own preferences—
important information that is then represented in subsequent configurations (Salvador et al.,
2009).

Other companies are pushing the boundaries of choice navigation even further by
completely automating the process. For instance, recent products that “understand” how they
should adapt to the customer and then reconfigure themselves accordingly. Equipped with
embedded configuration capability, these products might be standard items for the
manufacturer but, paradoxically, the user experiences a customized solution. Such is the
case with the Adidas1, a running shoe equipped with a magnetic sensor, a system to adjust
the cushioning and a microprocessor to control the process. When the shoe’s heel strikes the
ground, the sensor measures the amount of compression in its midsole and the
microprocessor calculates whether the shoe is too soft or too firm for the wearer. A tiny motor
then shortens or lengthens a cable attached to a plastic cushioning element, making it more
rigid or pliable (Salvador et al., 2009).

18
 Figure 14. Capabilities needed to develop mass customization. Source: Salvador et al. (2009)

1.5 Mass Customization as a Collaborative Effort

Viewed from collaborative engineering perspective, mass customization is essentially a
production paradigm under which customers and manufacturers collaboratively create
products or services to best meet individual customers’ needs in an efficient way. The
process of product or service creation is essentially of engineering nature but also has a
social bearing because of the interactions among engineers, sales, marketing, etc.
Conceptually, mass customization can be taken as a collaborative engineering activity,
where customers and manufacturers with asymmetric information and different preferences
engage in interactive and joint conflict resolutions to co-create an artifact (Chen et al., 2009).
19
 Firms pursue mass customization following different routes; customers get involved at
different points along the value chain and they are involved in different ways subject to
factors like industry structure, product nature, market conditions, etc. Different operation
modes of mass customization will involve different people and require different approaches
and methodologies for collaboration. In discussing product customization in a broad
manufacturing strategy context, Spring and Dalrymple (2000) propose a generic model of
product customization, which includes three stages, namely problem solving, design
specification, and transfer.

Figure 15. A model of product customization. Source: Spring and Dalrymple (2000)

• The problem-solving stage can be further decomposed to problem definition and

solution realisation. During the problem-solving stage, the product customization
concept and design scheme are determined and agreed between customers and
manufacturers.

• Design specification follows problem solving and it is the stage where a particular
customization type or product configuration is determined based on the product
architecture. The design specification and the process by which it is achieved will
determine the firm’s performance on some of the operational objectives, e.g., quality,
service and cost.

• The transfer stage is to convert design specifications into actual products.

The three-stage model provides a generic and compact framework to conceptually

approach mass customization. A limitation is that customer–manufacturer interaction is
confined to the problem-solving stage only (Chen et al., 2009). Therefore, Chen et al. (2009)
extend this model to allow customer integration in design specification and transfer stages as
well and use the extended model as a framework to discuss the application scenarios of
collaborative engineering in mass customization. In correspondence to the three stages of
customization, these general scenarios are termed as co-innovation, co-configuration, and
co-production, respectively, according to people/team, engineering methodologies, and tools
within a collaborative engineering perspective.

20
 Figure 16. Application scenarios of collaborative engineering in mass customization. Source: Chen et al. (2009)

1.5.1 Co-Innovation
Mass customization is a very dynamic system in the sense that both customers’ needs
and manufacturers’ capabilities are constantly evolving. Given the diversity, irregularity, and
unpredictability of customers’ needs, it often happens that some customer may not find a
satisfactory configuration out of the manufacturer’s current offerings. As a result, companies
implementing mass customization are often challenged to design and develop new solutions,
i.e., to innovate.

The source of innovation has been a subject of debate. The manufacturer-centric view
holds that innovations result from intentional research, e.g., the design and development
work in a company’s R&D centre. The user-centric (or customer-centric) view contents that
many innovations actually come from users, particularly the so-called lead users, whose
present needs will become general in a marketplace in the future (Von Hippel, 2005). One
common foundation between these two different views is that (customers’) need information
and (manufacturers’) solution information need to be brought together for innovation to take
place. As a result, problem solving in mass customization is collaborative in nature and
designated as collaborative innovation (co-innovation) (Chen et al., 2009).

As engineering methodology is concerned, the joint problem solving in mass

customization is essentially a collaborative design activity. Product Family Architecture (PFA)
provides a compact and structured way to represent and organise design knowledge from
multiple views (Tseng and Jiao, 1996; Jiao, 1998). Under PFA, customers, product
engineers, and process engineers can work under a unified framework. As a result, PFA
could serve as a framework for co-innovation (Chen et al., 2009). Given the preferential
differences between customers and manufacturers, conflict resolution mechanism is a key
issue in co-innovation. The ECN paradigm (Lu, 2003) provides a promising methodology to
address this issue.

For technical tools, engineering design tools like Computer Supported Collaborative
Work (CSCW) (Monplaisir and Salhieh, 2002) can be used to support the co-innovation
process. In the context of mass customization, Von Hippel (2005) proposes user toolkits to
facilitate user innovation. With the support of embedded design knowledge, customers are
able to innovate on their own and design products or services according to their individual
specific needs. Reversely, manufacturers can economise upon the cost of eliciting
21
customers’ ‘sticky’ need information by shifting partial design task to customers via user-
friendly design tools.

1.5.2 Co-Configuration
Configuration is the stage where customers and manufacturers come to agree upon
the specifications of a specific product offering. It corresponds to the design specification
stage as defined by Spring and Dalrymple (2000). Configuration is essentially a special form
of product design with the PFA already defined and the solution space determined. In other
words, configuration is a process of searching from a fixed pool of alternatives to locate a
specific product variant that is mutually satisfactory to the customer and the manufacturer.
The quality of configuration is critical to customer satisfaction because it will determine how
well individual needs will be satisfied, and it also determines to a large extent on
manufacturers’ performance on several dimensions that include cost, delivery lead time, etc.
However, high-quality configurations are usually difficult to achieve, particularly when the
product to be customised is complex. It requires good understanding of customers’ needs as
well as manufacturers’ offerings plus the ability to effectively match these two (Chen et al.,
2009).

One approach of configuration is to shift the task of configuration to customers via

product configuration systems, e.g., Dell’s online PC configurator. Using configurators can
streamline the configuration process, reduce configuration errors, and enhance flexibility and
responsiveness (Sabin and Weigel, 1998). However, shifting configuration to customers has
its downside. When products are complex and customers are unclear about what they really
want, they could get overwhelmed by the choices offered and the tradeoffs to be made. They
may find the configuration process unpleasant or even stressful (Huffman and Kahn, 1998;
Schwartz, 2003).

Salvador and Forza (2004) did an extensive survey on the application of configurators
for product customization. Their findings indicate that although many companies tend to rely
on product configuration systems to customise their products, they are faced with difficulties
like inadequate product information supply to the sales office, excess of repetitive activities
within the technical office, and high rate of configuration errors in production, etc. The
difficulties faced by many product configurators can be accounted by the partisan approach
they take, i.e., they view configuration either from the manufacturer’s or the customer’s point
of view while the collaborative nature of configuration in mass customization is neglected. As
a result, these configurators perform well in environment where manufacturers are able to
effectively convey what they can provide or customers know precisely what they want. There
is a need to treat configuration from a collaboration perspective to deal with the customer
diversity and product complexity in mass customization. The scenario of applying
collaborative engineering in the design specification stage of mass customization is
designated as collaborative configuration (co-configuration) (Chen et al., 2009).

In a typical organisation setting, co-configuration often involves customers and sales

engineers (sometimes design engineers). Up to date, there has been no engineering
methodology developed specifically for co-configuration. Existing configuration design
methodologies can be generally classified into rule-based, case-based, and model-based,
depending on the reasoning techniques used (Sabin and Weigel, 1998). In a rule-based
system, design knowledge is codified as configuration rules or constraints; in a model-based
system, design knowledge is contained in a system model, which consists of decomposable
entities and interactions between their elements; in a case-based system, new configurations
are adapted from previous, similar configurations (or cases) (Chen et al., 2009).

22
 In recent development, Guttman and Maes (1999) propose Distributed Constraint
Satisfaction as a new mechanism to support integrative negotiation with customers. Stolze
and Strobel (2004) propose personal recommendation systems to facilitate customers in
product configuration. Enabled by techniques like data mining, recommendation systems are
able to suggest product variants based on customers’ historical purchasing behaviours.
However, this approach requires customers’ needs and preferences to be relatively stable so
that the preferences revealed in the past can have predictive power for future preferences.
Further research is needed to better understand the dynamics within the co-configuration
process, to develop engineering methodologies specifically for co-configuration. In the
meantime, technical tools need to be developed to enrich the functionalities of existing
product configurators and recommendation systems by enabling interactivity (Chen et al.,
2009).

1.5.3 Co-Production
Production here (Chen et al., 2009) corresponds to the transfer stage (Spring and
Dalrymple, 2000) by including material conversion, material transportation, shop floor control,
procurement, inventory management, etc. To many manufacturers, inefficiencies in
production remain a critical roadblock to pursue mass customization strategy. The
simultaneous need for high variety, responsiveness, low cost, and high flexibility outstrips
many manufacturers’ financial resources or technical capabilities. Collaborating with supply
chain partners or end customers promises great potential to further increase production
efficiency, improve responsiveness, and reduce cost. The authors (Chen et al., 2009) define
the collaboration between customers and manufacturers in production functions of mass
customization as collaborative production (co-production).

The people involved in co-production usually include customers, supply chain

managers, and production engineers, etc. By sharing demand and supply information, supply
chain partners can better utilise production resources in response to volatile market demand.
Many methodologies have been proposed for co-production from different perspectives.
Cachon (2003) applies game theory to mathematically analyse different collaboration
scenarios in a supply chain structure and design contracting schemes accordingly. The
Voluntary Inter-industry Commerce Standards (VICS) group promotes Collaborative
Planning, Forecasting and Replenishment (CPFR) as a roadmap to cope with mutual
reconciliation of activities in supply chain collaboration. Advanced Planning Systems (APS)
begin to incorporate collaborative planning as an important functionality (Kilger and Reuter,
2005).

Up to now, the scope of research on co-production has been focused at the supply
chain level with business customers, and attention has been primarily placed on the value of
information sharing. Primary methodologies are based on game theory and optimisation.
Participants of collaboration are usually assumed to be utility or profit maximising. To cater to
a mass customization environment, there is a need to extend the research scope to
investigate how manufactures and a large number of individual customers can collaboratively
arrange production activities. The actual process of collaboration among participants with
different agenda and local incentives also needs to be studied. Existing tools need to be
interconnected, to enable interoperability and support effective conflict resolution (Chen et al,
2009).

Next Table summarises the application scenarios of collaborative engineering in mass

customization (Chen et al, 2009).

23
 Table 4. Application scenarios of collaborative engineering in mass customization. Source: Chen et al. (2009)

As it can be seen, the three MC stages described above; co-innovation, co-

configuration and co-production, correspond respectively with the three capabilities
described in Salvador et al. (2009) research; solution-space development, choice navigation
and robust process design.

1.6 Mass Customization Future Steps: The Experience Economy

As more and more companies are pursuing the mass customization paradigm starting
to offer more variety and customization, market segments are narrowing down to smaller and
smaller segments and eventually there is left markets of one individual customer. While
development toward mass customization is still under way, Pine and Gilmore (1999) have
already envisioned the future challenges after the mass customization roadmap has been
walked trough.

They think that the next management challenge is development toward ’Experience
Economy’. This can be justified, because if customizing a good automatically turned it into a
service, customizing a service automatically turned it into an experience. If that were true,
they realized, experiences would have to be a distinct economic offering, as distinct from
services as services were from goods. Pine and Gilmore (1999) continue addressing also the
next relevant question: But what happens when you customize experiences? You can turn
them into what is often called lifetransforming experiences, and thus was discovered the final
economic offering in the Progression of Economic Value: transformations.

Figure 17. Pine’s five steps to mass customization. Source: Pine (1993)

24
2. PRODUCT CONFIGURATION AND PRODUCT CONFIGURATORS

2.1 Configurable Products

An often used approach is to describe a series of products building a product family,
which is described in one single model. Traditionally, a product family can be viewed as the
set end products, which can be formed by combining a predefined set of modules (Faltings
and Freuder, 1998). The product family model describes which modules are parts of the
product family model and how they can be combined.

Seen from the customer's point of view, configurable products are products, which can
be specified - configured - by selecting property values from a given range of options so that
each delivered product is individually manufactured according to specific requests from a
customer. In a simple form of product configuration, the composition of a product is based on
a number of pre-defined modules and every product is composed of a specified set of these
modules. It is supposed unnecessary to change any of the existing modules or construct new
modules in connection with sales and production of the product (Jørgensen and Petersen,
2005).

Seen from the manufacturer’s point of view, a configurable product is more precisely a
product family from which each individual product can be selected through a configuration
process. Usually, the product family includes a large number of possible products, which
means that it is not feasible to describe all the individual products. Instead, the family must
be described as a whole and descriptions of each product are derived as a result of the
configuration. A generic model of a product family is termed product family model. Such a
model can serve as a foundation for the configuration process because it has a set of open
specifications, which have to be decided to determine or configure an individual product in
the family. Hence, the product family is the set of possible products, which satisfy the
specifications of the product family model. The result of each configuration will be a model of
the configured product, configured product model. From this model, the physical product can
be produced (Jørgensen and Petersen, 2005).

Figure 18. The product family model as the foundation for product configuration. Source: Jørgensen and Petersen
(2005)

25
2.2 Product Family Architecture and Modularity

2.2.1 Main issues involved in a Product Family Architecture

The concept of product family has been widely considered in the literature and its
development is recognized as an effective means to achieve the economy of scale in order
to accommodate an increasing product variety across diverse market niches (Du et al.,
2001). Some of the several definitions of the term are herewith showed.

• A group of differentiated products, which satisfy segmented market needs with a common
product platform (Meyer and Utterback, 1993).
• A set of products that share common technologies and address a related set of market
applications (Meyer, 1997).
• A group of products which share common form features and function(s), targeting one or
multiple market niches (Simpson, 1998).
• A group of family members which share a common product core and targets one or
multiple market segments (Siddique, 2000).
• A set of final products offered by a firm that are at least partially substitutable on demand,
possess underlying functional similarities, and share the same common technology and
production process (Salvador et al., 2002).
• A group of related products that is derived from a product platform to satisfy a variety of
market niches (Shooter et al., 2005).
All the definitions of product family are similar point to the thought of a group of
products with common characteristics and addressed to the same target market segment.
According to Meyer and Lehnerd (1997), the key to a successful product family is the product
platform around which the product family is derived. A product platform comprises a set of
variables, features or components that remain constant for each product belonging to a
product family. As Robertson and Ulrich (1998) point out, “By sharing components and
production processes across a platform of products, companies can develop differentiated
products efficiently, increase the flexibility and responsiveness of their manufacturing
processes, and take market share away from competitors that develop only one product at a
time.” A product platform can also facilitate customization by enabling a variety of products to
be quickly and easily developed (Jiang et al., 2007). Each product family member derived
from a product platform incorporates specific attributes to satisfy a target niche inside a
segment characterized by a set of customer needs while the product family will typically
address the whole market segment (Muffatto and Roveda, 2003).

As Huang et al. (2005) state, another key dimension for the success of a product
family is to provide enough product variety to meet customer requirements, business needs
and technical advancements while maintaining economies of scale and scope within
manufacturing processes. Leveraging the costs of delivering variety is a priority goal for
companies that want to offer products to one or multiple market niches. A correct product
family design can dramatically reduce development risks by reusing proven elements in a
firm’s activities and offerings (Ulrich, 1995; Sawhney, 1998).

Tseng and Piller (2003) indicate that the backdrop of a product family is a well-
planned architecture, i.e. the conceptual structure and overall logical organization of
generating a family of products, which provides a generic umbrella to capture and utilize
commonality. Each new product is instantiated within this architecture and extends so as to
anchor future designs to a common product line structure. Strong product platforms will

26
enable that each new derivative product can be developed at an incremental cost relative to
the development of the initial product architecture (Jiao et al., 2003).

Ulrich and Eppinger (1995) define product architecture as the scheme by which the
functional elements of a product are arranged into physical units and the way in which these
units interact. Ulrich (1995) defines it more precisely as: 1) the arrangement of functional
elements; 2) the mapping from functional elements to physical components; 3) the
specification of the interfaces among interacting physical components. The choice of product
architecture has broad implications for product performance, product change, product
variety, and manufacturability. Product architecture is also strongly coupled to the firm s
development capability, manufacturing specialties, and product strategy.

Traditionally, the research has been focused in the architecture and modular product
design mostly in the context of a single product. Since manufacturing companies increasingly
develop product families to offer a large variety of products with limited development and
manufacturing costs, the architecture(s) for product families become more and more
important (Meyer, 1997). Fujita and Ishii (1997) pointed out one important characteristic to
discern the architecture of a family of products from that of a single product, i.e., the
simultaneous handling of multiple products. Erens and Verhulst (1997) adopted various
product models to describe the architecture of product families. Essentially, they modeled the
architecture of product families as a packaging of single product models, instead of a unified
product family model. Yu et al. (1999) and Zamirowski and Otto (1999) approached product
architectures from a functional perspective, that is, defining the architecture of product
portfolio based on customer demands. Tseng and Jiao (1998) recognized the rationale of a
product family architecture (PFA) with respect to design for mass customization. They
pointed out the development of PFA involves systematic planning of modularity and
commonality across the functional, behavioral and structural views (Jiao and Tseng, 2000).
Zamirowski and Otto (1999) also perceived the necessity to develop the product architecture
and platform with the synchronization of multiple views such as those from customer needs,
function structures and physical architectures. The leveraging of modularity and commonality
in PFA development is also observed by Siddique (2000).

Du et al. (2000) investigates the Architecture of Product Family (APF) introducing the
concepts of common bases (CB) that refers to shared elements within a product family,
differentiation enablers (DEs) as the basic elements for making products within a product
family different from one to another and configuration mechanisms (CMs) to define the rules
and means of product variant derivation. While sharing common bases across products
allows for economy of scale, differentiation enablers facilitate the delivery of variety. Hitting
with the adequate level of common bases and differentiation enablers is a key issue to
balance product complexity and variety offered to customers. Variety generation methods
with regard to producing custom products based on the modular product architecture are
introduced.

27
 Figure 19. PFA and its relationships with market segments. Source: Du et al. (2000)

Capturing repetitions in design and manufacturing to maximize reusability is settled

by Tseng and Jiao (1998) with the purpose of achieving low costs and high efficiency, i.e.,
the economy of scale, an advantage characterized by mass production. There are basically
two issues inherent in reusability, namely the modularity and commonality that are keys
issues to build efficient product architectures (Jiao et al., 2003).

The concepts of modules and modularity are central in building an architecture

(Ulrich, 1995). While a module is a physical or conceptual grouping of components that share
some characteristics, modularity tries to separate a system into independent parts or
modules that can be treated as logical units (Newcomb et al., 1996). In line with Mikkola and
Skjott-Larsen (2004) product customization can take place either based on a common
platform with additional options or based on combining and mixing-and-matching modules to
achieve different product characteristics. Feitzinger and Lee (1997) use the case of Hewlett-
Packard printers to assert that a product should be designed in independent modules that
can be assembled into different forms of the product easily and inexpensively design to
achieve manufacturing efficiencies that approximate those of standard mass produced.
Therefore, decomposition is a major concern in modularity analysis. Brun and Zorzini (2009)
analyze 20 Italian companies to investigate the relationships existing between postponement
and modularization practices concluding that postponement tends to be implemented in
cases of simple but highly customized products and related processes, while modularization
is preferred when products and related processes are characterized by low customization
and high complexity levels.

Another important attribute of modularity is the interaction between modules.

Interactions between-modules are minimized whereas within-module interactions may be
high (Ulrich, 1995). Correspondingly with the three views of PFA, there are three types of
modularity, i.e., functional modularity, technical modularity, and physical modularity that are
characterized by specific measures of interaction for particular views.

28
 On the other hand, commonality reveals the difference of the architecture of product
families from that of a single product. While modularity resembles decomposition of product
structures and is applicable to describing module or product types, commonality
characterizes the grouping of similar module or product variants under specific module or
product types characterized by modularity. In other words, a product family is described by
modularity and product variants differentiate according to the commonality between module
instances.

Salvador et al. (2002) explore how manufacturing characteristics affect the

appropriate type of modularity to embed into the product family architecture and how the
types of modularity relate to component sourcing, based on the analysis of six product
families belonging to six European companies. A type of modularity, i.e., combinatorial
modularity, not previously described in the literature is formalized: all component families are
allowed to vary, while the interface between specific pairs of component families is
standardized.

Product variety can be achieved through combinations of components and modules.

In production environments it is possible to identify various types of modularity. Ulrich and
Tung (1991) classify them in six categories, which can be used separately or in combination
to provide a customized end product: component-sharing modularity, component-swapping
modularity, cut-to-fit modularity, mix modularity, bus modularity, sectional modularity.

Figure 20. Basic methods of variety generation. Source: Ulrich and Tung (1991)

• Component Sharing Modularity: In component-sharing modularity, the same

component is used across multiple products to provide economies of scope. This
kind of modularity never results in true individual customization (except in
combination with other types), but allows the low cost production of a great variety
of products and services. Component-sharing modularity is best used to reduce the

29
 number of parts and thereby the costs of an existing product line that already has
high variety.

• Component-Swapping Modularity: This method is the complement of component-

sharing modularity. Here, different components are paired with the same basic
product, creating as many products as there are components to swap. In many
cases, the distinction between component sharing and component swapping is a
matter of degree.

• Cut to Fit Modularity: This technique is similar to the previous two types, except that
in cut-to-fit modularity one or more of the components is continually variable within
preset or practical limits. Cut-to-fit modularity is most useful for products whose
custom value rests greatly on a component that can be continually varied to match
individual wants and needs. This is the case with a large number of products,
including beds, office chairs, and automobile seats, in which particular advantage
can be gained by an organization's ability to cater economically to hard-to-fit
individuals at the extremes who generally must not only compromise but sacrifice
comfort and/or style to accept standard sizes.

• Mix Modularity: This type of modularity can use any of the above types, with the
clear distinction that the components are so mixed together that they themselves
become something different.

• Bus Modularity: This type of modularity uses a standard structure that can attach a
number of different kinds of components. The term comes from computers and
other electronic equipment that use a bus, or backplane, that forms the primary
pathway of information transfer between processing units, memory, disk drives, and
other components that can plug into the bus. The automobile takes advantage of
bus modularity. The basic platform chassis and wiring harness that connects all of
the electronics provides the bus structure; everything else is plugged into it.

• Sectional Modularity: The final type of modularity provides the greatest degree of
variety and customization. Sectional modularity allows the configuration of any
number of different types of components in arbitrary ways-as long as each
component is connected to another at standard interfaces. The classic example is
Lego building blocks with their locking cylinder interfaces. The number of objects
that can be built with Lego’s is limited only by the imagination. With sectional
modularity, the structure or architecture of the product itself can change, providing
tremendous possibilities for variety and customization. Few products can have
mechanisms as simple as Lego’s, but the interfaces can be developed over time,
usually by building upon those defined for component sharing and component
swapping while modularizing more function into smaller components.

Du et al. (2001) propose three basic mechanisms for variety generation: attaching,
swapping, and scaling. More complicated variety generation can be composed by applying
these basic methods to the hierarchical product structure recursively.

30
 Figure 21. Basic methods of variety generation. Source: Du et al. (2001)

According to Salvador et al. (2002) once market customization requirements have

been identified, it is necessary to determine both the number of product variants to be
handled within the same production unit and the required volume for these variants. They
have identified two “extreme” possible situations, one in which product variety requirements
are (relatively) low and production volume is high that they called “soft mass customization
(SMC)”, and another one in which product variety requirements are high and production
volume is (relatively) low, called “hard mass customization (HMC)”.

Figure 22. Product family architectures for soft and hard mass customization. Source: Salvador et al. (2002)

With SMC it would be more convenient to restrict the features a customer can specify,
thereby limiting the portion of product components that would be allowed to vary. Most
product components can be standardized throughout the product family allowing product
variants to be obtained by swapping components from a component family while maintaining
a basic product body (see figure 8). In case of HMC restricting the part of the product
affected by customer specifications may not be as effective. Increasing the range of product
31
features makes it difficult to seek economies of scale from component standardization. But to
give customers a greater set of product features over which they can choose while
minimizing the operational severity of customer choice flexibility, firms would likely have to
implement into the family architecture a type of product modularity we label combinatorial
modularity.

Another important research topic related to product family architectures is the way in
which products with options are represented. The most significant effort done probably is the
generic bill-of-materials (GBOM) (Hegge and Wortmann, 1991). In essence, a GBOM
represents a family of products that share a similar BOM structure. By introducing
parameters and differentiating products with alternative parameter values, a GBOM is able to
represent multiple products in a single structure. Bei and MacCallum (1995) present an
initiative of Product Family Classification Tree (PFCT) emphasizing the classification of end-
products and/or modules merely from a functional viewpoint. To facilitate representations
from multiple perspectives, Generic Product Modeling (GPM) is advocated to represent
product families from both commercial and assembly views (Wortmann and Erens, 1995).
McKay et al. (1996) tried to describe product families from both sales/customer and
assembly views by merging descriptions of detailed product data with product variety

Jiao et al. (2000) propose the Generic Variety Structure (GVS), a kind of generic bill
of materials and operations for high variety production management, which consists of the
common product structure, variety parameters, and configuration constraints. Another way to
represent variety in a product family structure is the Generic Product Structure (GPS)
proposed by Du et al. (2001). Similar to the GBOM concept, within a product family, all
variants share a common structure, which may be common product technologies, modules,
or configuration mechanisms. GPS acts as a generic data structure for such a product family.
The derivation of product variants becomes the instantiation of the GPS. While a GPS
characterizes a product family, each instance of the GPS corresponds to a product variant of
the family.

Figure 23. A generic structure for characterizing variety. Source: Du et al. (2001)

32
 However, GBOM lacks the flexibility in representing the structural product variety (i.e.,
the possible product design variations in terms of product structure) since they assume the
multilevel BOM structures of the products are the same. Zhang and Tseng (2007) propose a
generic product model to characterize both the structure- and the item-level product variety
using unified modeling language (UML). The generic product model of a product family
consists of three elements, namely constituent items, relationships between constituent items
and constraints.

2.2.2 Managing Variety Inside a Product Family

Today’s global marketplace has changed dramatically. Proliferation of models and
options is a fact and consumers have more opportunities to find a product that best suits their
individual needs. Companies need to offer more varieties of products to maintain market
share. Pine points to three factors which are driving this need for increased variety:
increasing heterogeneity in a company’s targeted marketplace, wider income distribution
within the market and slower growth within the market (Pine, 1993). Also, the more
companies competing in the market the more often new products are introduced. This
requires a company to introduce products quicker or else lose market share to these newly
introduced products (Martin and Ishii, 2000). For instance, car models are now redesigned in
as short as two to three years whereas development times of four or five years was standard
less than two decades ago.

The need for increased product variety and shorter development times brings added
complexity to the company. All companies would like to produce exactly what customers
want when they want but when product variety increases this goal turns into something much
more difficult to achieve. This complexity affect the company’s marketing, design, and
manufacturing functions and companies are seeking ways to better manage these functions
on variety. Tseng and Jiao (2000) state two types of variety, namely the functional variety
and the technical variety. While the functional variety is most related to the customer
satisfaction affecting directly to the marketing area, the technical variety usually involves the
manufacturability and costs so design and manufacturing areas are directly concerned.

In this context, the goal is to reduce the cost of variety to the firm. Developing an
understanding of product variety is crucial to reduce its effects. One of these effects is the
increased complexity to make demand forecasts that match future consumption. Due to
companies have a poor understanding of customer needs, they produce larger volumes and
more product variants, relying on incorrect forecasts. Their focus then becomes how to get
rid of stock and how to offset the cost to manage it. The more they continue on that path, the
harder it is to produce the exact product the customer wants within the time the customer
deems acceptable. Companies miss out on potential sales, or they end up burdened by
inventory-holding costs and must entice customers with steep discounts or other incentives.
Profits erode, and customers do not get what they really want.

To mitigate the effects of product variety and, at the same time, to meet this kind of
customer demands efficiently, Holweg and Pil (2001) promote the implementation of Build-
To-Order (BTO) strategy. Concepts of process, product and volume flexibility across the
whole value chain are pointed out as the three key dimensions for a successful
implementation of a BTO strategy. The dimension of product flexibility is highlighted giving
some clues about how well the company adapts a product to the customer's specification
and how much it is able to delay or reduce the degree of product tailoring. Mass
customization, postponement and late configuration are all routes to product flexibility.
Customizing late in the process, determining what variations truly enhance customer-
perceived value and making product structures more adaptable will let companies respond
faster to individual orders and stabilize production schedules.
33
 Companies need to improve the knowledge that they have about the customer
perception and the implications in costs of the variety offered to market. Generally, when a
product manager wants to determine if it is profitable to have more variety within a current or
future product line, they look at the direct costs of increased variety (capital equipment, new
suppliers, additional space, hours of engineering, design analysis, run certifications,
qualification tests, etc.). However, the estimation of indirect costs associated with providing
variety is significantly more difficult (logistics of managing variety, quality, change in capacity
due to set-ups, inventories, etc).

Martin and Ishii (1997) propose Design for Variety (DFV) as a methodology to help
companies to quantify the costs of providing variety and to guide designers in developing
products that incur minimum variety costs. They suggest the need to be in possession of
quantitative and qualitative tools that quickly estimate the costs of increasing or reducing
variety. To capture the amount of variety within a design, three indices are used:

• Commonality Index (CI) that measures the number of unique parts.

• Differentiation Index (DI) that indicates where product is differentiated and where
value is added.
• Setup Index (SI) that measures product switchover costs.

Some qualitative tools to increase managers’ and engineers’ understanding of how to

reduce those costs are introduced: Process Sequence Graph (PSG), showing the flow of
product and its differentiation points, algorithms for Optimal Process Sequence (OPS) to
determine the process flow that minimizes the number of nodes and commonality graphs to
communicate commonality measures to marketing, design, and manufacturing personnel.

Figure 24. Process Sequence Graph before and after improved layout. Source: Martin and Ishii (1997)

In later works (Martin, 1999; Martin and Ishii, 2000), authors define two main types of
variety to consider when developing a product:

• Spatial variety is defined as the variety that the company offers the marketplace at a
point in time. Multiple varieties of a product are offered to meet the needs of different
market segments.

34
 • Generational variety for a product occurs as the product is updated over time. Variety
across generations involves the changes that occur to a product family over time.

Figure 25. Spatial and generational variety. Source: Martin and Ishii (2000)

To measure the product variety degree, DFV method has proposed two indices: The
first index is the Generational Variety Index (GVI), a measure for the amount of redesign
effort required to meet the future market requirements in future designs of the product. The
GVI for each component indicates a relative measure of the design effort for each
component taking into account some metrics defining during the calculation process. The
second index is the Coupling Index (CI), a measure of strength of the coupling among the
product components. The stronger the coupling between components, the more likely a
change in one will require a change in the other.

Figure 26. Example of a GVI and CI calculation matrices for a printer. Source: Martin and Ishii (2000)

From the coupling matrix, two additional indices are derived: The Coupling Index
Receiving (CI-R) that indicates the strength of the specifications that a component receives
from other components and the Coupling Index Supplying (CI-S) that indicates the strength

35
of the specifications that a component supplies to other components. The CI-S and CI-R
indicate how tightly coupled a component is.

The development of the Generational Variety Index (GVI) and Coupling Index (CI) is
an important process that gives project teams a more explicit understanding of the external
drivers of change and of how changes may propagate throughout the design. Additionally,
the method provides some approaches to reduce both GVI and CI indexes removing
specifications that link engineering metrics with components (GVI) or component with
component (CI), and removing sensitivity of the components to changes in the specifications.

2.2.3 Systematizing Product Family Development

In a global competitive environment that is, intense and dynamic, the development of
products has become a focal point of attention. Shortening product-lifecycles, increasing
competition, globalizing value chains and rapidly changing technologies as well as customers
demanding high variety options are some of the drivers for new and flexible product
architectures (Pine, 1993). In particular, the product development process must ensure
productivity while at the same time guaranteeing that products meet customer demands in
terms of technical and emotional performance, innovation and time of delivery (Muffatto and
Roveda, 2003).

To achieve these objectives, companies must take decisions regarding product

variety, standardization and customization. Structured design methodologies and tools to
help product development teams to deal with these decisions are increasingly necessary.
One of these methods is the Variety Effectiveness Program (VEP), a methodology described
by Galsworth (1994) for helping companies decrease the complexity of variety. The
methodology uses six analysis tools covering the following areas of 1) unique vs. shared
parts, 2) modularity, 3) reduction of part count, 4) design for assembly, 5) range of
component specifications, and 6) trends in product and component specifications.

As already mentioned in the previous section, Martin and Ishii proposed in several
works (Martin and Ishii, 1997; Martin, 1999; Martin and Ishii, 2000), Design for Variety (DFV)
as a methodology to help companies to quantify the costs of providing variety and to guide
designers in developing products that incur minimum variety costs. Authors advance the
development of two indices Generational Variety Index (GVI) and Coupling Index (CI) to give
the project team a more explicit understanding of the external drivers of change and of how
changes may propagate throughout the design. The generation of the indices and their
application to architecture development constitutes the core of DFV method.

The method uses the indices to focus on the most critical areas in developing the
architecture taking into account the reasons both external (changing customer requirements,
regulations, competitor introductions, etc.) and internal for which a component will change
over time. Moreover, the method uses some heuristics for helping the team determine the
critical components affecting the design effort and different approaches to modify the
architecture to reduce these effects. Its mains steps are the following ones:

• DFV Step 1: Generate GVI and CI for the design.

• DFV Step 2: Order the components according to the GVI rank, CI rank and design
costs.
• DFV Step 3: Determine where to focus efforts where to standardize or modularize.
• DFV Step 4: Develop product platform architecture.

36
 Design has been considered as a deciding factor in the final product form, cost,
reliability, and market acceptance. Studies at British Aerospace (Jiao et al., 2003) show that
85% of the cost components of a product can be attributed directly to decisions made before
product design is released to manufacturing. On the other hand, the actual or incurred cost of
design may range from 5% to no more than 15%. More explicitly there are arguments that
the major cost decisions are made in the very early phases of the design process. These are
strong arguments for which companies should extend the traditional boundaries of product
design to encompass a larger scope spanning from sales and marketing to manufacturing,
distribution and services. At the same time, product differentiation will be enhanced
designing group of products belonging to a product family instead of designing individual
products. From 1998, Jiao, Tseng and others have published several works (Tseng and Du,
1998; Tseng and Jiao, 1998; Tseng and Jiao; 2000; Jiao and Tseng, 2000; Jiao et al., 2003;
Jiao and Tseng, 2004) in which they propose Design for Mass Customization (DFMC) as
strategy to expand the context from both a design scope perspective and a product
differentiation perspective.

Figure 27. DFMC conceptual implications. Source: Tseng and Jiao (1998)

Authors present a methodology of developing Product Family Architecture (PFA) as

the kernel of DFMC. PFA performs as the underlying platform architecture within which
various product variants can be derived from the basic product designs to satisfy a spectrum
of customer needs related to various market niches. In this way, each new individual product
can be efficiently developed at an incremental cost relative to the development of the initial
common product line structure.

One important aspect of PFA is concerned with including customers in the product
life-cycle, particularly in the design phase, through proactively connecting customer needs to
the capabilities of a company. By recognizing and capturing patterns of customer needs and
market niches, the PFA is ready and convenient for marketers and designers to bring out
customer requirements and to elicit expectations for new product designs.

The methodology for developing PFA consists of several systematic steps to

rationalize product development for mass customization, which workflow development is
showed in the next figure.

37
 Figure 28. Workflow of PFA development. Source: Jiao et al. (2003)

Corresponding to the three views of product modeling, the development of a PFA

consists of three consecutive stages, namely functional view, behavioral view, and structural
view.

• Functional view: The functional structure of a product consists of the functional elements,
or the so-called functional requirements (FRs), and their interrelationships. In the context
of product families and mass customization, the functional structure of a PFA exhibits the
product line of a firm that embodies the customer requirements.
• Behavioral view: The behavioral view describes the product design by its modules and
the modular structure in terms of technical parameters (TPs). The purpose is to highlight
differentiation (variety) in product design resulting from different solution technologies
applied to meet diverse customer needs.
• Structural view: The structural view represents product information by a description of the
physical realization of a product design and is strongly related to the manufacturing and
delivering of the product.

38
 Figure 29. Multiple views of product family. Source: Jiao et al. (2003)

Additional issues such as synchronization of multiple views, generic variety structure,

reusability, modularity, commonality and other PFA elements are included in the
methodology.

In Arana et al. (2005), apart from three similar views of the product model called
functional view, technical view and physical view that are comparable to the PFA views,
propose to add a new one: the manufacturing view. In this type of view, the different
components are incorporated into specific phases of the current process, in accordance with
the production model established and the product instance generated from the requirements.

Another approach is the guideline presented by Schuh et al. (2005) to determine a

product structure and identify part and module commonality in an efficient manner. This
guideline offers several performance figures to evaluate the status-quo of an already existing
product structure.

Figure 30. Procedure for product structuring. Source: Schuh et al. (2005)

The guideline is divided into four main steps to group functions (see figure 16), to
define interfaces and to achieve a high degree of commonalty:

39
• The first step is the collecting of the requirements and transferring them into technical
functions.
• The second step describes the way how to integrate several functions in a single module
without any conflicts within the product structure. Result of this step is a functional
module structure.
• Based on the steps before, the interfaces between the combined modules must be
defined and evaluated in step three.
• After this, in the last step, the commonality of components/ parts and modules must be
analyzed and evaluated to realize an efficient product structure.

In the last decade, several computational methods have been developed for
optimizing product platforms and product families development. An exhaustive classification
of such methods and tools can be found in Simpson (2005).

2.3 Configuration Process

The process which allows users to select functional requirements and transforms this
requirements into the configured products is the configuration process.

In the sales/delivery process an order or an enquiry initiates the process of

configuration. It is not always possible to produce the final configuration in one step. This can
indicate that the product is very complicated and many technical terms are used in the
configuration process. The process of configuration is therefore divided in two; where the
customer in step one specifies the demands and preferences to the product and, in step two,
engineers run a technical configuration process where the customer selections are
transformed to a product description, and production- and assembly orders are generated. It
is important to state that, through the second configuration process, new modules or
components are not designed or constructed. The process is only to transform the customer
choices to a precise formal product description ready for production (Jørgensen, 2008).

Figure 31. The process from sale to delivery of a configurable product. Source: Sulonen et al. (1998)
40
 Some companies offer partly configurable products, so that the customer can specify
some of the functionalities, and the development department will be involved in satisfying
more specific customer needs. If a specially designed product is produced for a customer
and it is profitable to make it available for other customers, the necessary changes should be
performed in the product family model. So, if the company later accept an order for this
product, it will be an ordinary order on a configurable product. However, the product should
not be visible in the product family model until fully detailed production documentation (bill of
materials, routings etc.) for the product has been created (Jørgensen, 2008).

2.4 Product Configurators

A product configurator1 can be defined as a tool - computer software – that can support
the process of customization (Kovse, et al., 2002). For example a car manufacturer could
introduce mass customization into his business process on the basis of a set of available
engine types, transmission mechanism types, security device types, sunroofs of adjustable
dimensions, seat types with different surface materials and colors (Kovse, et al., 2002).

Product configurators (Tiihonen, et al., 2001) are also knowledge-based systems used
to support configuration process. It is an information system that assists in the creation and
management, especially in the long term of configuration knowledge (Tiihonen and Soininen,
1997) and with intelligence capabilities makes it less complicated to the customer (Sabin and
Weigel, 1998). In other words a configurator is software with logic capabilities to create,
maintain and use electronic product models that allow complete definition of all possible
variants with minimum data entries and maintenance (Inala, 2007).

Web-based configurator tools have become an important means of configuring

products in the mass customization era. But with more and more variants the configuration
process has become complex and confusing for the customer (Stegman, et al., 2003). The
old trend was to choose products from predefined set of variants. The goal of mass
customization today is to offer complete personalization of products for individual customers
(Pine, 1993; Piller, 2001). This can be possible if customers participate in the design process
as co-designers and configure their product in a product configuration system. Manual
configuration would make it a complex task for customers as they lack the know-how of
transferring their preferences into product configuration containing detailed technical
knowledge. To reduce the complexity experienced by the customer, the configuration system
should generate personal recommendations automatically based on customer preferences
and interests (Inala, 2007).

Configurators can be classified into two classes namely manufacturing model

configurator and marketing model configurator approaches (Tiihonen and Soininen, 1998):

• Manufacturing model configurators have technical focus and are considered to be

complex for customer oriented product configuration. Customers cannot completely
understand the technical details and would be overwhelmed with the content.

• The marketing model configurator is considered dominant in commercial solutions. It

focuses on those aspects of the product that would hold the attention of the customer.
Web-based configurators of Dell, Adidas and Nike etc fall in this category. In short,
marketing model configurator can provide simple choice variants.

Ideally, a configurator should have capabilities based on type of customization and volume of
customization being offered. Thus it should have both manufacturing and marketing model

1
Configurator example: http://www.theboxbuilder.com/web/en/index.html
41
configurator capabilities based on the product customization. Most of the B2C kind of
products should have marketing model configurator capabilities, if the customer involvement
occurs early in value chain, the configurator needs to also have some manufacturing model
configurator capabilities. So a configurator cannot truly fall in any of these categories but
have a mix of both types. Manufacturing and marketing model configurators cannot exist
independently. Technically speaking, a configurator should have both these capabilities but
one might dominate the other based on the degree of customization and customer
involvement (Stegman, et al., 2003).

The design of configurable products specifies a set of rules on how these elements can
be combined into products to meet customer requirements (Salvador and Forza, 2004;
Tiihonen and Soininen, 1997). Customer requirements in the purchase of customized
products can be met by applying the process of product configuration. The product
configuration potential used in this process can be expressed in the form of generic product
structures, commonly known as configuration models (Mannisto, et al., 1996). They are used
to describe a specific product family. Product family is defined as a set of all possible product
individuals that allow to be instantiated generically on the basis of a given configuration
model (Inala, 2007).

Figure 32. Product configuration process. Source: Kovse, et al. (2002)

Configurators are the systems that use product definition information in sales-delivery
process for accurate and fast configuration that fulfils customer requirements and company
constraints. Product configurators however don’t support full all degrees of customization.
This demands the integration of product configurator with CAD/CAM/CAE applications (Inala,
2007).

It’s also a difficult to update the product configurator with new release of configuration
data. The engineering staff of the company has better knowledge about the product but they
cannot always transfer all that knowledge to the configurator because of lack of user friendly
42
tools (Mesihovic and Malmqvist, 2000). For this reason, the customers should be offered
configurators with front-end capabilities and the internal data is dealt with the back-end
configurator. For better assistance, front-end and back-end should be linked. Only front-end
or back-end capabilities cannot serve all the purposes of the customer. Ideally, the system
should have both front-end and back-end capabilities and they should be interlinked. An
effective configuration should have the capability of transferring knowledge from product
development process to sales-delivery process (Inala, 2007).

The front office sale has the capabilities of capturing the requirements of the customer
followed by generation of quote sometimes. Back office has capabilities of producing
engineering designs. Back-end is mainly responsible for the conversion of configuration into
bill of material, quoting and estimating price, and product routing and generation CAD
models (Inala, 2007).

Back-end configurators have the capabilities oriented to the needs of manufacturing,

primarily to create accurate product configurations with minimal bill of materials. Front- end
systems are termed as sales configurator systems. To fully address the company’s
configuration needs, both front-end and back-end capabilities are needed (Bourke, 2000).
The advantages of having front-end and back-end systems are well recognized: accurate
and timely quotes and orders for complex products and unassisted customer ordering
through web with front-end capabilities that facilitate online ordering (Sabin and Weigel,
1998).

Configurators should be used throughout all the phases of product life cycle like
through design, sales, manufacturing and supply chain. The same is classified into front-end
and back-end for convenience. Sales, more often need not be via web, it could be offline as
well. If sale is possible via web, it means that the configurator has online configuration
capabilities. If configuration and sales is performed offline, then it is said to possess offline
configurator capabilities (Inala, 2007).

A configurator tool alone cannot serve the purpose of mass customization. Because
many degrees of freedom are involved in the customization process, it leads to confusion
and uncertainty for the customer (Helander and Jiao, 2002). Many times, customer clearly
does not know what they want (Wind, et al., 2002). Therefore it is always advisable that
companies maintain a database of previous customer designs and preferences as it could
guide and influence the new customer. It would even save time as the new customer has
some idea in mind before he starts the configuration process. When a company is following
the mass customization strategy, it faces a number of challenges in manufacturing, logistics
and another issue that arises is involving customer in value chain. For this reason, customers
need to be aware of the product and some basic functionality.

Also, customers do not know what they really want, until they see it (Wind, et al., 2002).
It is important that the configurator has graphical capability along with textual as well as
graphics that would act as good visuals. Since the customer is configuring something that is
new and which he cannot see, feel or test until he buys it, graphical ability is absolutely
helpful. This would not only reduce the complexity but overcome uncertainty (Leckner, 2003).

Leckner (2003) discusses about customer communities to assist the customers in

configuration. He discusses asynchronous collaboration and synchronous collaboration is
provided by the database of previously configured products in the form of participatory
catalogues (Schubert, 2000). These catalogues contain the rating and comments of group
members. Synchronous collaboration speaks about shared workspace (Miles, et al., 1993)
which enables collaborative design to develop products. Irrespective of the amount of
collaboration provided by customer communities, it is of greater value if a consultant or a
43
sales person assists the customer in the technical aspects. Depending on the complexity of
the product customization, consultation can be provided to the customer that would ease the
process. If the decision is just in terms of color and other things, the graphics ability of a
configurator can handle the situation. If the product has something to do with the technical
features, more than any database, consultation can work the best (Leckner, 2003).

One of the most successful applications of the product configurator is artificial

intelligence. Based on the configuration knowledge, the conceptualization can be classified
into rule-based, model-based and case-based approaches. Rule-based approach works on
executing rules in the form of if–then conditions (Blecker, et al., 2004). At each step the
system verifies all set of rules and proceeds to those steps that can be executed next. As
there is no separation between relationships and actions, they contain both domain
knowledge and the control strategy to compute the solution (Sabin and Weigel, 1998). The
drawback of rule-based system is problems encountered during acquisition, consistency
checking and knowledge maintenance. Model-based approach is mostly implemented in
configurators which are logic-based, resource-based and constraint based (Sabin and
Weigel, 1998). Case-based approach works on the assumption that similar problems have
solutions. A current problem is solved by finding and adapting to a similar previous problem
(Inala, 2007).

Based on the business strategy configurators can be classified into Assemble-to-Order

(ATO), Fabricate-to-Order (FTO) and Engineer-to-Order (ETO). ATO has finite number of
standard modules for combining. FTO and ETO may have infinite configuration possibilities
but would have complex configurators to allow parameterization of dimensions. According to
Mittal and Frayman (1989) ATO configurators are built after the product development and
thus have fixed number of combinations and predefined set of rules. ATO typically includes
steps like specification mapping, preliminary configuration and selection of sales-delivery.
ETO configuration concept uses assemble to order configuration for some parts while others
are designed to customer requirements. These other activities are supported by
CAD/CAM/CAE. These definitions speak more about customization types than product
configurator capabilities (Mesihovic and Malmqvist, 2000).

Internal configurators and external configurators are the next category (Blecker, et al.,
2004). Internal configurators support sales aspects in capturing customer requirements.
External configurators are designed with front-end with direct assistance during
configuration.

Online configurators enable communication with the customers over the web. The
configuration knowledge is stored in the web server. Offline configurators work with CD ROM
or other data carriers. They work independent of the network (Blecker, et al., 2004). More
often offline configurators are accompanied with consultation.

Further, configurators can be classified based on the updates execution into push or
pull. In push mode the supplier central unit communicates with the customer’s local unit. In
contrast in pull mode, local unit can retrieve the updates if required. Based on the scope of
use, configurators can be classified into single purpose and general purpose systems. Single
purpose has capabilities to support the sales-delivery process of the product. Special
purposes are designed to a particular industry (Tiihonen and Soininen, 1997). Based on the
design complexity, configurators are classified as primitive, interactive and automatic.
Primitive types allow basic configuration without checking the validity of decisions. Interactive
types are capable of checking the validity of decisions while automatically generating parts or
even entire configuration (Inala, 2007).

44
 Taking the integration level into consideration, there are stand-alone, data-integrative
and application-integrative configurators. Stand-alone don’t dispose interface to other
information system and thus cannot be integrated. Data-integrative helps in avoiding
redundancy of information. Application-integrative enables integration of applications like
CAD systems to the configurator (Blecker, et al., 2004).

Based on the solution searching approach there are two categories. One, based on
technical elements and the other based on features. In the system based on technical
elements, customer starts with a standard product and then specifies product options.
Configurations working by features provide facility to specify requirements in terms of
functionality (Blecker, et al., 2004).

Leckner (2003) discusses that individual needs and preferences can be categorized
into measurable physical aspects, immeasurable but descriptive aspects and vague aspects.
Measurable physical aspects are measurable by the customer like height, place of residence
etc. Customer clearly knows what it is. Immeasurable but descriptive aspects are interests,
hobbies etc. They can be read form the customer profile. Vague aspects are preferences
which the customer cannot see it but want it (Wind, et al., 2002). This is where the
configurator comes into play. Though the product is virtually created, the customer should be
able to visualize it. The graphical capabilities can serve this purpose (Leckner, 2003).

3. OPEN-INNOVATION METHODS AND TOOLKITS

3.1 Open Innovation

Open Innovation is a term promoted by Henry Chesbrough, a professor and executive
director at the Center for Open Innovation at UC Berkeley, in his book Open Innovation: The
new imperative for creating and profiting from technology (Chesbrough, 2003). The open
innovation concept is related to user innovation, cumulative innovation and distributed
innovation: “Open innovation is a paradigm that assumes that firms can and should use
external ideas as well as internal ideas, and internal and external paths to market, as the
firms look to advance their technology” (Chesbrough, 2003).

Figure 33. Open innovation concept representation. Source: Chesbrough (2003)

45
3.2 Open Innovation Methods and Toolkits
Diener and Piller (2010) introduce three generic methods that help to put open
innovation into practice. All methods focus on either accessing need or solution information,
or on providing a combined access to these factors. Some instruments are designed for an
active integration of innovative users and customers into an innovation process. Other
instruments focus on the transfer of solutions from external experts answering an open call
for cooperation (Diener and Piller, 2010):

• The lead user method first identifies innovative users. In a second step, these users
are then integrated by means of innovation workshops. Although the focus here is
primarily on accessing need information, the lead user method also is a proven
practice when it comes to accessing innovative (technological) solutions.

• Toolkits for open innovation are Internet-based instruments which aim at supporting
users in transferring their needs into new product concepts. When accessing need
information, toolkits should help over-come the problem of “sticky” information.

• Innovation contests aim at the generation of input for all stages of the innovation
process. Competitions between users and customers aim at encouraging innovative
ideas at the frontend of the innovation process. Innovation contests can also begin in
a later stage in the innovation process; usually in searches for innovative approaches
to a technical problem within a broad field of problem solvers.

3.2.1 The Lead User Method

According to Diener and Piller (2010), the lead user method is a qualitative process-
oriented approach. It aims at the active integration of selected users to generate ideas and
concepts for new product or process innovations. Lead users have, before others, within a
target market a personal need for a specific solution (a product, a process, …). They expect
a very high personal benefit from the new development fulfilling their need. Lead users thus
anticipate early on innovative characteristics, which are relevant only much later for other
customers. Lead users additionally have the ability to develop a fully functional solution for
their needs. They, hence possess not only need information, but equally also solution
information (von Hippel, 1988).

Different stages can be differentiated in the the lead user method (Diener and Piller,
2010):

• Initializing the Project

• Trend Analysis
• Identification of Lead Users and Lead Experts
• Concept Design in Lead User Workshops
Regards Concept Design in Lead User Workshops, the identified innovative users and
experts are invited by the manufacturer to attend an innovation workshop, in which ideas and
concepts are further developed for the defined project. All preliminary steps served basically
as a means to carry out the workshop successfully. The quality of the workshop’s results
determines the success of the lead user project. Even if there is no exact, fixed way of
successfully executing a lead user workshop, there are some elements in particular that we
want to talk about in the following (Diener and Piller, 2010).

Workshops usually begin with a briefing led by the internal team, a presentation of the
basic product range, a definition of the problem as well as the problem to be solved. It is
46
important to formulate exactly, which results are expected by the end of the workshop.
Afterwards, the participants are stimulated to generate their own ideas for solving the
problem in several rounds through the use of well-chosen creative problem solving
techniques. Ideas and suggested solutions generated are presented during the workshop by
the company´s experts and are realized in order to integrate the participants in their
evaluation. Ideas that are rated positively are taken into other workshops for further
development or are fed into the companys internal innovation process (Diener and Piller,
2010).

3.2.2 Toolkits for Open Innovation

A completely different procedure in open innovation is the employment of toolkits for
open innovation, also known as toolkits for user innovation and co-design (Von Hippel, 2001;
Von Hippel and Katz, 2002). Toolkits are focused on integrating customer input in the
innovation process. The primary goal of toolkits is to access need information in a more
efficient manner than possible through traditional means. They also aim at interacting with a
large number of customers which often are “average” customers, i.e. including also those
that do not obtain lead user characteristics. Toolkits can be placed in the development stage
of the innovation process. Here, customer inputs have to be more concrete and elaborated in
order to be valuable for firms. A higher degree of elaboration often requires a more
structured approach for the interaction with customers (Diener and Piller, 2010).

In order to obtain an adequate solution for an innovation problem, firms needs to

combine need information from the customer domain with their own solution information. As
first solutions are not always best, firms usually repeat this process several times and
evaluate possible solutions in an iterative process. This process of trial and error is very
expensive, because it fosters a steady flow of iteration and communication between the user
and the manufacturer. Because of the “stickiness” of (location-dependent) needs and
solution information, the exchange between both parties is often tedious and accompanied
by high transaction costs (von Hippel 1998).

Toolkits for open innovation are based upon the idea of handing over the trial and error
process to customers. A toolkit is a development environment, which enables customers to
transfer their needs iteratively to a concrete solution, often without coming into personal
contact with the manufacturer. The manufacturer provides users with an interaction platform,
where they can make a solution according to their needs using the toolkit’s avalaible solution
space (Diener and Piller, 2010).

In order to operate efficiently, toolkits should fulfill five basic requirements (Von Hippel
and Katz 2002; Von Hippel 2005):

1. Trial and error learning: Toolkit users should receive simulated feedback on their
solution in order to evaluate it and to improve on it in an iterative process. In this way,
learning by doing processes are facilitated.

2. Solution Space: A toolkit´s solution space define all variations and combinations of
allowed possible solutions. Basically, the solution space only permits those solutions,
which take specific technical restrictions into account and are producible from the
manufacturer´s perspective.

3. User friendliness: User friendliness describes how users perceive the quality of
interaction with the toolkit. Expenses influence the user´s perception of quality, (time,
intellectual effort), as well as the perceived benefit, (satisfaction with the developed
solution, fun), of interacting with the toolkit.
47
 4. Modules and components library: Modules and components library allow users to
choose from predefined solutions chunks for their convenience. Such libraries may
also contain additional functionalities such as programming languages, visualization
tools, help menus, drawing software, etc, which enable the user to focus their creative
work on those aspects that cannto be implemented via pre-designed options.

5. Transferring customer solutions: After users have developed the best possible
solution for their needs, it should be transferred to the manufacturer. A transfer over
toolkits allows for perfect communication of the customer´s solution, which is
conveniently translated into the manufacturer´s “language”.

Following Franke and Schreier (2002), Diener and Piller (2010) distinguish two types
two types of toolkits according to the degrees of freedom that the underlying solution space
provides to customers; toolkits for user innovation, and toolkits for user co-design and
customization:

• Toolkits for user innovation resemble, in principle, a chemistry set. Their solution
space or, at least some of the product’s design parameters, is boundless. Toolkit
users not only combine the manufacturer’s standard modules and components to
create the best possible product for themselves, but they also expend a tremendous
amount of effort in experimenting through trial and error processes on new and up to
now, unknown solutions for their needs. The manufacturer’s toolkit provides the
necessary solution information in the form of, for example, programming languages or
drawing software. A good example comes from the semiconductor industry where
firms equipped customers with toolkits for custom development of integrated circuits
and computer chips (Von Hippel and Katz, 2002).

• On the other hand, toolkits for user co-design and customization are used for product
individualization and adoption, rather than developing new goods and services. It can
be compared to a set of Lego bricks. Toolkits for user co-design offer users more or
less a large choice of individual building blocks (modules, components, parameters),
which can be configured to make a product according to the user’s individual
requirements. Therefore, the toolkit’s solution space is limited and can be modified
only according to its predefined “building blocks”. These building blocks lie within the
range of a manufacturer´s economic and technological capability. Well-known
examples of these types of toolkits are Dell´s product configurator and configurators
found, for example, in the automobile industry. Another well-known example is the
strategy of toy-maker LEGO and its LEGO Factory, and advanced toolkit for user
innovation targeting the children market (Diener and Piller, 2010).

These two type of toolkits are very much related, regards their functional
characteristics, to the product configurators previously described in section 2.3. In terms of
business strategy, the former, toolkits for user innovation, would be related to ETO type
product configurators, while the latter, toolkits for user co-design and customization, would
be related to ATO type product configurators.

3.2.3 Innovation Contests and “Broadcast Search” Platforms

In an innovation contest, a company calls on its customers, users, or experts in the
general public either to disclose innovative ideas and suggestions for product improvement,
or it asks for a very specific solution for a dedicated (technical) innovative tasks. The
contests come in different types. They can be a very broad call for contributions directed at
all (potential) customers of the company and/or a very dedicated question to a smaller team
of specialts. Their common objective is to increase the spectrum of a solution as well as the
48
scalability of participation (Diener and Piller, 2010). The authors (Diener and Piller, 2010)
present in their work some examples to illustrate this method:

• The Electrolux Design Lab 2005 attracted entries from over 3,058 design students
from 88 countries around the world, the top six countries being the US, the UK,
China, India, Brazil and Italy. Participants were asked to design household appliances
for the year 2020. Twelve finalists participated in a six-day design event in Stockholm,
including workshops, model building and a competition for cash-awards, appliances
and more. The competition’s registration process was run via Designboom, an
industrial design community.

• The Nokia Concept Lounge invited designers in the Benelux to share ideas and
design the next new cool phone.

• Another example is LEGO’s LEGO Factory : Children and other building enthusiasts
visiting the site are invited to design models (using easy to use, free downloadable
software) and take part in competitions for LEGO prizes..

• Danish Vores Øl (‘Our Beer’) claims to be the world's first open-source beer. The
recipe and the entire brand is published under a Creative Commons license, meaning
that anyone can use Vores Øl's recipe to brew the beer or to create a derivative. As
long as home brewers publish the recipe under the same license, they’re free to
make money from their efforts, which includes free access to Vores Øl’s design and
branding elements.

• The third Peugeot Concours Design was launched in September 2004 at the Paris
Motor Show, and the final results were shown at the Geneva Motor Show last month.
After aspiring car designers were asked to design the Peugeot of their dreams for the
near future, 3,800 projects (2,800 in 2002 and 2,050 in 2000) were sent in, from 107
countries.

• IKEA's "fiffigafolket" contest (Swedish for 'ingenious people') which is now in jury-
phase, asked amateur outsiders to send in clever designs for storing home media (hifi
sets, TV, DVD etc) in the living room. Out of 5,000 ideas submitted, fourteen winners
will be invited to IKEA headquarters for a workshop, and will receive EUR 2,500.
More interestingly, the designs will actually get produced and end up in IKEA stores
for all to see, buy and assemble.

4. ANALYSIS AND RECOMBINATION. THE GREY ZONE INBETWEEN PURE AND

TAYLORED CUSTOMIZATION: CO-ADAPTATION

4.1 Co-Innovation, Co-Service and Co-Adaptation Concepts

Based on some previously identified premises:

• Mass customization is a new paradigm based on creating variety and customization

through flexibility and quick responsiveness (Pine, 1993).

• Customer demand for individualized and customized products must exist for the
success of a mass customization system and customers´ demand for customized
products is dependent upon two main factors. The first, degree of sacrifice the
customer is willing to make for the customized product. It involves how much the
customer is willing to pay and how long she/he is willing to wait. The second, the

49
 firm´s ability to produce according to customer specifications, within a reasonable
time and cost. The balance between these two factors determines the success of the
mass customization system (Hart, 1995).

• In mass customization, customers are no longer passive recipients of products or

services that are designed and produced for a nominal customer. Instead, each
customer has his or her individual identity and provides key inputs in designing,
producing, and delivering the product or service based on his or her individual
preferences (Chen et al., 2009).

• With respect to the product and production design, products must be designed to be
customizable (Hart,1995).

• Technological revolutions enable new ways of organizing production activities and

doing business in general. Flexible manufacturing systems allow manufacturers to
quickly adapt to changes in product variety, volume, and delivery schedule without
incurring high penalty in terms of cost and lead time. Information technologies like
internet and telecommunication systems establish efficient channels for companies to
reach widely dispersed population and in the meanwhile interact directly with each
individual customer (Hart, 1995).

it could be interpreted that, in terms of mass customization, nothing new is really designed in
the bidding process, but that modules and components already pre-defined in the solution
space, and designed in the innovative stage, are presented to the customers so that they can
be combined in several also pre-defined ways (see figure below).

Figure 34. Mass customization strategies. Source: Lampel and Mintzberg (1996)

However, many mass-customizer companies operate using various strategies

simultaneously to satisfy the wishes of individual customers, i.e. MTO for the clients whose
requirements can be matched to the company’s solution space, and ETO for those clients
whose requirements can not be matched. Or in fact, within one customer requirements, there
may be parts of the solution that can be assembled to order (ATO) while others must be well
manufactured to order (MTO) or engineered to order (ETO). Therefore, in many mass-
customizer firms, specially for the case of SMEs that have evolved from craft manufacturers
towards mass customizers (Svensson and Barfod, 2002), a mix of tailored- and pure-
customization strategies are frequently performed. This type of mixed strategy allow these
firms, due to the flexibility and responsiveness of their processes, to modify the solution
space with enough agility and cost efficiencies to satisfy the requirements of a real customer
whose specific needs were not considered in the solution space so far defined.

50
 Figure 35. Adaptation of Lampel and Mintzberg’s model (Lampel and Mintzberg, 1996) to contemplate tailored-
pure-customization mixed strategies.

In this context, those SMEs that want to be truly customer oriented have to be
prepared, at least, to solve those dissatisfactions that appear when a specific customer
wants something very much like, but not exactly, something that already exists. These type
of situations, that are represented in Rudberg and Wikner’s model (Rudberg and Wikner,
2004) as well as in Kok’s model (Kok, 2007), described in sections 1.2.7 and 1.2.8
respectively, implies in practice the need of a decision support procedure that allow
deciding wether or not the product-process adaptation/re-design needed is economically and
technically viable. This decision support procedure adds, as a result, a dynamic dimmension
to Salvador et al. model (Salvador et al., 2009) described in section 1.4.

Figure 36. Adaptation of Salvador et al. (2009) framework regards product adaptation/re-engineering activities

51
 In fact, taking Salvador et al. model (Salvador et al., 2009) as a reference framework,
several mass customization and customer/user involvement concepts, models, and
strategies presented in section 1, such as those stated by Rudberg and Wikner (2004) in
section 1.2.7, Chen et al. (2009) in section 1.5, or Pine (1993) in section 1.6, can be related
in a comprehensive manner.

Figure 37. Adaptation of Salvador et al. (2009) model as a reference framework to relate different mass
customization and customer/user involvement concepts, models and strategies

In the proposed model (Figure 37) the customer is engaged, to varying degrees, in
various stages of the mass-customization process. At the macro-evolutionary stage, new
product development, the customer is involved through CO-INNOVATION, what would result
in lifetransforming experience. On the other hand, at the micro-evolutionary stage, daily
scale, the customer can be involved in two ways: (1) In the process of selecting, from a pre-
defined solution space, the solution that best suits her/his needs (CO-SERVICE), or; (2)
When her/his needs can not be satisfied by the pre-defined solution space but through an
adaptation, partial product-process (co-)redesign, can be performed without a substantial
compromise of quality, cost and delivery time aspects (CO-ADAPTATION). The latter,
according to our experience, could also result in a lifetransforming experience.

Traditionally, two types of design typologies appear the literature. The first on could be
refered as the “innovative design”, a design in which the firm develops new products or
create new functionalities to the product in order to respond new market needs. The second
one could be called “rutinary design”, and refers to those situation in which the firm adjusts
an already existing product to the specific needs of a customer, provided that these needs
were previously considered in the preceding innovative design stage. The former would

52
contemplate Understanding Customer´s Needs, Solution Space Development and Robust
Process Design stages of Salvador et al. model (Salvador et al., 2009), as well as the Co-
Innovation and Co-Production stages of Chen et al. model (Chen et al., 2009). On the other
hand, the latter, would be related to the Choice Navigation stage of Salvador et al. model
(Salvador et al., 2009) as well as with the Co-Configuration stage of Chen et al. model (Chen
et al., 2009).

In the real SMEs practice, as it has been stated in previous paragraphs, due to the
existence of customers that demand solutions outside the solutions space conceived in the
innovative design stage, SMEs are many times forced to perform an “adaptive design”:
ATOED concept (Rudberg and Wikner, 2004). In this design typology the firm modifies/adapt
an existing product, adding new features, following mass customization paradigm, in order to
satisfy customers daily requests.

Figure 38. Adaptation of of Salvador et al. (2009) model in order to represent co-innovation, co-service and co-
adaptation concepts

Those companies not involved in adaptive design will therefore follow one of the three
models stated by Lampel and Mintzberg (1996) as Mass Customization: Segmented
Standardization, Customized Standardization, Tailored Customization. While those involved
with adaptive design would be placed, regards Lampel and Mintzberg (1996) categorization,
inbetween the Tailored Customization and Pure Customization regions. In fact, companies
very much engaged with “adaptive design” will be quite close Pure Customizers.
Nevertheless, unless innovative design phase has fully covered the needs of real customers,
the adaptive design is a practice perhaps unusual, but necessary if real customer demands
want to be satisfied by SME mass customizers.

4.2 Co-Innovation, Co-Service and Co-Adaptation Toolkits

One essential feature that differentiates mass customization from mass production is
that customers are actively involved in the value creation process in mass customization.
This section discusses the toolkits that are used or should be used at different stages of
53
mass customization where the customer is involved. This will distinguish three cases,
depending on the stage, and the way, customer involvement takes place.

4.2.1 Co-Innovation, Co-Service and Co-Adaptation Toolkits. An Introduction

The first case refers to the innovative design stage and includes the Voice of the
Customer for Understanding Customer's Needs, and the Voice of the Enterprise in the early
phase of Solution Space Development and Robust Process Design of Salvador et al. model
(Salvador et al., 2009). In this case the objective is to identify potential customer needs to
further define the solution space and robust process that supports it. The process will require
dialogue and collaboration with these potential customers might even in the design of
solutions, referred in Chen et al. (2009) as Co-Innovation, or in the design of the process,
referred in Chen et al. (2009) as Co-Production.

The second scenario is the one that occurs in the rutinary design stage and
contemplates the Choice Navigation phase of of Salvador et al. model (Salvador et al.,
2009), referred in Chen et al. (2009) as Co-Configuration. In this case the goal is to facilitate
a real customer the search, in the pre-defined solution space, of that particular solution that
mets her/his current needs. This process will require dialogue with those real customers.

The third case occurs at the stage of adaptive design. That is, when a real customer
finds, in the pre-defined solution space, a solution close, but not tailored to her/his current
needs. In this case the objective is, through dialogue and collaboration with the customer, to
adapt-to-order (Rudberg and Wikner (2004) ATOED concept) the solution space, what in
practice means a light innovative design, in order to satisfy these current needs.

Next figures show the type of toolkits needed for the three cases/scenarios described
above, depending on the mode of interaction (Dialogue / Collaboration), depending on usage
(Innovation / Search / Adaptation) and according to scope (Conceptual / Technical).

Figure 39. Toolkits needed for the three cases/scenarios depending on the mode of interaction (Dialogue /
Collaboration) and the usage (Innovation / Search / Adaptation)

54
 Figure 40. Toolkits needed for the three cases/scenarios depending on the scope (Conceptual / Technical) and
the usage (Innovation / Search / Adaptation)

4.2.2 Co-Adaptation Toolkits

In section 2 and section 3 the characteristics of the toolkits needed both for the Co-
Innovation and the Co-Configuration stages have been already described. Therefore, this
sub-section will just focussed on describing what characteristics co-adaptation toolkits should
have. It is important to emphasize here that in addition to providing these toolkits to
customers, the company needs to have a very fast and efficient decision support
procedure for capturing additional requirements (define changes needed) and respond to
the client (analysis system).

Figure 41. Adaptation of Salvador et al. (2009) framework regards product adaptation/re-engineering activities.
Key blocks of the decision support procedure in red.
55
 As for the features that Adapt-To-Order Toolkits must have, in our opinion, a distinction
with respect to the type of customer/user to whom they are addressed should be made,
distinguishing between “conceptual” toolkits and “technical” toolkits.

We refer to “conceptual” toolkits as those ones that pursue that a client with knowledge
of functions, but without technical knowledge, can describe those “extra” requirements that
are not covered by the current solutions space. These clients are not supposed to provide a
new solution. Therefore, these toolkits should have the following characteristics: (1) An
accesible “Requirement Space”, and; (2) A user friendly interface so the client can
conceptually express additional requirements. However, it would need to have the following
characteristics: (1) Trial and error learning, as the client don’t have capacity to technically
evaluate, and that capacity would be embedded in the decision support procedure analysis
system, and; (2) Modules and componentes library, as the client don’t have capacity to use
or define technical concepts.

On the other hand, we refer to “technical” toolkits as those ones that pursue that a
client with functional and technical knowledge (professionals or lead users with much
knowledge of the product) could describe, not only additional requirements not covered in the
current solution space, but new solutions also. These type of toolkits besides the
characteristics of the “conceptual” toolkits should also need to have the following extra
characteristics: (1) An accesible “Solution Space”; (2) Modules and componentes library
(drawing software, languages, …), and; (3) A user friendly interface so the client can
technically define, through the solution space and the modules and components library,
new/ additional partial solutions. Regards the trial and error learning capacity, it could be
accessible to the client, or not, depending on her/his capacity to evaluate the incidence of the
proposed design changes over the organizational processes. Most of the times, however,
this functionality would be kept embedded in the company’s decision support procedure
analysis system.

From the descriptions above, in our opinion, Co-Adaptation toolkits (Co-ATOED

toolkits) should be placed, as defined in section 3.2.2 Toolkits for Open Innovation,
inbetween User Innovation Resemble toolkits and User Co-design and Customization toolkits
(Diener and Piller, 2010). The reason for this is that Co-Adaptation toolkits allow, not only to
use “predefined building blocks” by the client, as the toolkits for User Co-design and
Customization do, but also that this client could create new “building blocks”, as for the case
of User Innovation Resemble toolkits. Nevertheless, we consider that clients should not be
allowed to decide if their proposed decision is factible to be developed by the firm, as that
implies a huge knowledge of the organizational processes, and that such decision should be
kept internally most of the time, ie. company’s decision support procedure analysis system.

The following table shows a comparison between Co-Adaptation technical toolkits

characteristics and the characteristics of previously described Co-Innovation and Co-Service
toolkits.

56
 TOOLKITS
Co-Innovation Co-Service Co-Adaptation
Trial & Error Learning
Components Library
Solution Space
User Friendliness
Predefined Blocks (Modules)
Transferring Customer Solutions
New Blocks (Sub-Solutions) Yes, but similar
Execution Time Slow Very Quick Quick
Cycle Time Large Very Small Small
Push/Pull Enterprise Push Enterprise Push Customer Pull
Product Growth By Innovation By Adaptation
Beneficiary Enterprise Both Both

Table 5. Co-Innovation, Co-Service and Co-Adaptation technical toolkits characteristics

Next figure places the main characteristics of the co-innovation, co-adaptation and co-
service toolkits described using Piller’s mass customization continuum (Piller, 2004).

Figure 42. Main characteristics of co-innovation, co-adaptation and co-service toolkits adapting Piller’s (Piller,
2004) mass customization continuum

4.3 Toolkits for Customizing Mass Customization

Another way to look the toolkits characterization issue is through the process shown in
the next figure.
57
 Figure 42. Generic decision process for customizing mass customization toolkits

From the above schemma viewpoint, user co-design toolkits just differ from enterprise
design toolkits in that the former should employ a more everyday, less technical, language
understandable by the customer. Thus, toolkits could be classified otherwise:

Objective Input Tools (friendly, …) Result

TOOLKITS for Customizing

Requirements Predefined “Writers” New Requirements

Definition Requirement Space defined
Mass Customization

Solutions Predefined Ad-hoc & general New Solutions

Definition Solution Space & purpose defined
Blocks & Features library,
Elemental/Atomic software,
Blocks & Features cad,
…..
Solutions New Solutions Ad-hoc New Solutions
Evaluation systems, …, processes evaluated
Requirements New Ad-hoc translators Solution Space &
& Solutions Requirements & Choice Navigation
Transferring Solutions Growth

Table 6. Customizing mass customization toolkits classifcation matrix

The following table, that is focused on the objectives of requirements/solutions

definition, illustrates the previous concepts regarding the customer’s product knowledge and
definition capacity.

58
Customer´s Custo What How With Type Product’s Software
Product mer Tool Related product’s
Knowledge is able which Matching related
to is a … example
has …
Very Low Define Requirements Describe Writer General High Use Cases
Tools
Low Generate Solutions Compose Composer Ad-hoc High Plug-Ins
Composer
Medium Generate Solutions Modify Design Ad-hoc Medium Java Design
Patterns Patterns
High Generate Solutions Create Basic General Very Low Software
Entities Development
Kits (SDKs)

Table 7. Customizing mass customization toolkits objectives and product knowledge classifcation matrix

In the next table an industrial product’s related example can be seen:

Customer´s Customer How Tool Figure Result

Product is able to Cad with … New …
Knowledge Capabilities
Very Low Define Describe View & Markup Requirement

Low Generate Compose Parts Library Assembly

Medium Generate Modify Features Part

Library

High Generate Create Basic Entities Part

Library
(line, circle, …)

Table 8. Customizing mass customization toolkits objectives and product knowledge classifcation matrix – an
industrial example

59
5. TOWARDS MASS CUSTOMIZATION

5.1 Two Origins: Mass Production and Pure Customization

As Svensson and Barfod (2002) state, there will always be a market for cheap
standardized products, but this market is a hostile environment for most western
manufactures, and for most ‘‘build to order’’ SMEs this market will never become interesting.
On the other end of the spectrum there is also a market that will remain the domain of ‘‘built
to order’’ SMEs, as is the case of exclusive craft manufacturers.

Normally, the strategies associated with these type of situations are what is known as a
Mass Production (for standardized products) and Pure Customization (for one-of-a-kind
products). Next table and figure show some key characteristics of each strategy (Davis,
1987; Pine, 1993; Chen et al., 2009).

Mass Production Pure Customization

Market Large One of a kind
Customer Needs Functional Emotive
Quality Medium/Low High/Medium
Price Low High
Delivery Time Low High
Efficiency High Low
Product Standardized Exclusive
Automotive example
(Renault2 vs. Ferrari3)

Table 9. Generic comparison between mass production and pure customization strategy characteristics

Figure 43. Generic mass production, pure customization and mass customization strategic canvas

2
Information extracted from http://www.renault.com/
3
Information extracted from http://www.ferrari.com/
60
 Clearly, customers of Renault and Ferrari buy cars, but their needs are not the same,
some of them buy functionality and price, and others purchase exclusivity, image and
prestige.

Inbetween these markets there is an emerging battleground (Svensson and Barfod,

2002). In the era of Fordisme, as defined by Boynton and Milazzo (1996), uniformity was the
key to widespread availability for the public, if you wanted a product adapted to your
specifications, you had to find a craft company to built it or make it yourself. You would
indeed get a unique product; the price would be high, the quality inconsistent and the lead-
time long. So in most cases the customer would turn to a mass-produced product with short
lead-time, low price and high quality. The result of post Fordisme, is a merger of markets, the
strict separation of mass-produced and customized products is dissolved, resulting in a more
complex competitive situation where customizers and mass producers are to a higher degree
targeting the same customers.

Figure 43. Different paths towards mass customization. Source: Svensson and Barfod (2002)

Both paths towards the emerging market of mass customization has been studied in
the literature. Thus, in order to present a holistic picture of the evolution process towards
mass customization, over mass production, Victor and Boynton (1998) developed ‘‘the right
path’’.The right path consists of a number of sequential steps that support manufacturers in
the transformation to mass customization. The right path is aimed at mass producers who
wish to build customization into their mass production. Therefore, seen from the ‘‘built to
order’’ SME this might not be the right path. The variation often is already a part of the ‘‘built
to order’’ production, looking at the symptoms it is clear that it is the mass that is missing in
order to become a manufacturer of mass customized products.

As an alternative to the ‘‘right path’’ Svensson and Barfod (2002) designed the
‘‘knowledge stair’’. The ‘‘knowledge stair’’ describes the evolution of a ‘‘built to order’’ craft
company into an industrialized manufacturer of customized products. This is done through an
internal industrialization process where cost, precision and quality are prioritized. It is called
the ‘‘knowledge stair’’ since it focuses on the development of the non-material processes
involving the processing of data, information and knowledge. According to Svensson and
Barfod (2002), through this sequential development in the SME the manufacturer will have
developed the multi-disciplinary skills needed for efficient production of customized goods.

61
 Figure 44. The knowledge stair. Source: Svensson and Barfod (2002)

5.2 Mercedes vs. Irizar Mass Customization Strategies

In order to illustrate the previous paths, the strategies that Mercedes4 and Irizar5 have
followed in the luxury coach market are shown below.

Both companies, even selling the two luxury coaches, Mercedes sells image, prestige
and technology and Irizar integration, exclusivity and price. This seems logical because of
the origins of each company. Mercedes has always been a producer of vehicle and
generator technology (V-Engines, ABS, EPS…), while Irizar has historically been a coach
builder or technology integrator.

Thus, even approaching the two to the concept of Mass Customization, each oone
comes from opposite origins; Mercedes has moved from the world of Mass Production to
Mass Customization, while Irizar has advanced from the world of Pure Customization
towards Mass Customization.

MERCEDES (bus IRIZAR (bus market)

market) towards towards
Mass Customization Mass Customization

Market Segmented One of a kind

Customer Needs Emotive Functional
Quality (based on) Technology Integration
Price High Medium
Delivery Time Medium Low
Efficiency High High
Product Standardized Customized

Table 10. Comparison of two bus market manufacturers strategies in their transition towards
mass customisation

4
http://www2.mercedes-benz.es/content/spain/mpc/mpc_spain_website/es/home_mpc/bus.flash.skipintro.html
5
Based on Ikerlan’s knowledge of Irizar’s company derived from several research and transference projects
62
 Figure 45. Strategic canvas of Mercedes (bus market) Mass Customization

Figure 46. Strategic canvas of Irizar’s transition towards Mass Customization

From the figures above it can be observated the shift towards Mass Customization of
two firms with opposite origins. In the case of Irizar a question that arise is: How can Irizar
keep on being competitive against a heavyweight manufacturer such as Mercedes?. The
answer to this question is very much related to Svensson and Barfod (2002) formulation:
Customer satisfaction should be at the focus by combining low price with extensive variation
and adaptation. In order to do so, Irizar has set a very robust process with such an
operational efficiency that allow them to use Rudberg and Wikner’s (2004) Adapt-To-Order
(ATOED) concept.

63
5.3 Irizar’s Mass Customization Decision Support Procedure and Toolkits
The following are the features of Irizar's strategy:

• Long/Medium/
Short Distances
Product Range

• Luxury/Economic
Buses

• Big solution
space

Cosmetic Exterior/Interior, Customer Pull, One of a kind

Customization
Product/Process Strategy based on Flexibility/Responsiveness through several kinds of

Dimensional Predefined catalog (enterprise push) or customized

Customization dimensions (customer pull)
customization

When is out of catalog (customized) implies structural

redesign

Layout Predefined catalog (enterprise push) or customized layout

Customization (customer pull)

64
Integration – Chasis Supplier : Mercedes, Scania, Man, Renault, …
Customization (user – Power, Engine, Gear Box, …
selected chasis) – Axes : 2/3

When customized (new integration) implies structural

redesign

Customization by – Britain = driver door at the opposite side, passengers

Countries/Markets doors also
– Israel = without driver door
– Safety rules, …

When customized (new integration) implies structural

redesign

Furnitures – Bedroom, Bathroom, Kitchen…

Customization

When customized (new integration)

implies partial structural redesign

Table 11. Features of current Irizar strategy

65
Daily customization at Irizar is supported through the following approach:

Figure 47. Irizar’s daily customization approach

And the following decision support procedure:

Figure 48. Irizar’s daily ATOED decision support procedure (KDB = Knowledge DataBase)
66
 Based on Adapt-to-Order (ATOED) strategy, for structural customization, ETO on the
Fly, for non-structural customization, as well as MTO and ATO, with responsiveness and
efficiency which enables quality and delivery times which customers are right to pay for, the
toolkits Irizar use for automating its decision support procedure are the following ones:

• Product Knowledge Database;

• Sales Configurator;
• Technical Configurator;
• Toolkit for Cosmetic Customization;
• Toolkit for Layout Customization;
• Toolkit for Solution’s Space’s Development/ReDesign;
• Toolkit for Safety Rules Analysis, plus;
• Other Systems (CAD, FE, ERP...).

5.3.1 Toolkit for Cosmetic Customization

This toolkit needs as input the whole structural information (bus, doors, windows…) in
order to define dimensions and positions.

Figure 49. Irizar’s toolkit for cosmetic customization

5.3.2 Toolkit for Layout Customization

This toolkit also needs as input the whole structural information (bus, doors,
windows…) in order to define dimensions and positions, as well as access to the Knowledge
Database (KDB) where product families architectures are modularized and parametrized.

67
 Figure 50. Irizar’s toolkit for layout customization

5.3.3 Toolkit for Solution’s Space’s Development/ReDesign

In order to facilitate ETO by Re-Design, this toolkit is fed by the Knowledge Database.
It is based on based on modules, features, and parametrized patterns, and on ad-hoc
structural oriented Language.

Figure 51. Irizar’s toolkit for solution’s space’s development/re-design

This toolkit has an ad-hoc user interface too, as shown below.

68
 Figure 52. Irizar’s ad-hoc user interface of the toolkit for solution’s space’s development/re-design

Also, utilities for transfering technical information (BOMs, drawings…) to ERP, PDM…
systems for production operations and suppliers are integrated in the toolkit.

Figure 53. An example of Irizar’s toolkit for solution’s space’s development/re-design utilities for transfering
technical information

5.3.4 Toolkit for Safety Rules Analysis

This toolkit evaluates aspects such as turning radious, load checks, etc, in order to
evaluate the design regards several safety rules and physical constraints.

69
 Figure 54. Irizar’s toolkit for safety rules analysis

5.3.5 Irizar’s Conclusions

Irizar, with the goal of achieving Best Customer Experience with the Best Production
Efficiency, has mainly focused on the customer satisfaction and competitiveness through
adaptability and efficiency.

• Market Segment: Defined

• Customer Needs: Satisfied
• Quality: Satisfied
• Price: Competitive
• Responsiveness: Competitive
• Efficiency: Competitive
• Based on: Adapt-to-Order Product/Process Strategy

Adaptability and efficiency has been achieved regards an agile decision support procedure
and several toolkits that allow the procedure automation.

5.4 Toolkits General Conclusions

Following Salvador and Forza (2004) survey, regards configuring products to address
the customization-responsiveness squeeze, the toolkits described in this section (section 5),
and the previous one (section 4), facilitates the subsequent issues, not only for co-service
activities development, but also for the development of a co-adaptation strategy.

Issues related to the front-office (sales organization):

• Managing product alternatives.

• Ensuring technical feasibility during the sales process.
• Salesmen need for product information supporting them in the sales process.
• Pricing the product rapidly and precisely in the tendering phase.
• Determining the product delivery date rapidly and precisely in the tendering phase.
• Minimize the number of offers with configuration errors.

70
Issues related to the back-office (manufacturing and technical office):

• Minimize technical office personnel involvement in the tendering process.

• Minimize resources absorbed in drafting and checking technical product
documentation (BOMs, routings, production cycles, etc.)
• Minimize resources absorbed in preparing product user documentation.
• Improve the appropriateness of coding scheme for product variants management.
• Minimize production orders configuration errors and incorrect BOMs.
As well as:

• Improve the appropriateness of past product configurations for marketing and

production planning analyses.
• Facilitate that customers or distributors configure the product themselves.

6. REFERENCES

Amaro, G., Hendry, L., Kingsman, B., (1999). Competitive advantage, customization
and a new taxonomy for non make-to-stock companies. International Journal of Production
Economics, Vol. 19(4), pp. 349-371.

Arana, J.M., Lakunza, J.A., Astiazaran, J.C. (2005). Product Models and Mass
Customization Experiences in the Basque Country. Proceedings of International Mass
Customization Meeting (IMCM’05), Klagenfurt, Austria.

Baldwin, C.Y., Clark, K.B., (1994). Modularity in design: an analysis based on theory of
real options. Harvard Business School Working Paper.

Bei, Y., MacCallum, K.J. (1995). Decision Support for Configuration Management in
Product Development. Proceedings of the 3rd International Conference on Computer
Integrated Manufacturing, Vol. 1, pp. 278–286, World Scientific, Singapore.

Blecker, T., Abdelkafi, N., Kreuter, G., Friedrich, G. (2004). Product configuration
systems: State of art, conceptualization and extensions. Eight Maghrebian Conference on
Software Engineering and Artificial Intelligence, Tunis.

Boi Faltings and Eugene C. Freuder (Ed.), “Configuration - Getting it right”. Special
issue of IEEE Intelligent Systems. Vol.13, No. 4, July/August 1998

Bourke, R.W. (2000). Product Configurators: Key enablers for mass customization.
www.midrangeERP.com.

Boynton, A., Milazzo, T.G. (1996). Post-Fordisme debate: a theoretical perspective to

information technology and the firm. Accounting, Management and Information Technology 6
(3), pp. 157–173.

Brun, A., Zorzini, M. (2009). Evaluation of product customization strategies through

modularization and postponement. International Journal of Production Economics, Vol.
120(1), pp. 205-220.

71
 Cachon, G. (2003). Supply chain coordination with contracts. In Graves, S. and de Kok,
T. (Eds.) Handbooks in Operations Research and Management Science: Supply Chain
Management. North Holland.

Chandra, C., Kamrani, A.K. (2004). Mass Customization: A Supply Chain Approach.
Springer.

Chen, S., Tseng, M.M. (2005) Defining Specifications for Custom Products: A Multi-
Attribute Negotiation Approach. CIRP Annals - Manufacturing Technology, vol. 54, issue 1,
pp. 159-162.

Chen, S., Wang, Y., Tseng, M.M. (2009). Mass customisation as a collaborative
engineering effort. International Journal of Collaborative Engineering, Vol. 1, N. 1/2.

Chesbrough, H. (2003). Open Innovation: The New Imperative for Creating and
Profiting from Technology. Boston: Harvard Business School Press

Christopher, M. (1998). Logistics and supply chain management : Strategies for

reducing cost and improving service. London: Financial Times/Prentice Hall.

Da Silveira, G., Borenstein, D., Fogliato, S. F. (2001). Mass customization: Literature

review and research directions. International Journal of Production Economics, Vol., pp. 1-
13.

Davis, S.M. (1987). Future perfect. Addiseon-Wesley, Reading, MA.

Diener, K., Piller, F. (2010). The Market for Open Innovation. RWTH Aachen
University, Technology and Innovation Management Group.

Du, X., Jiao, J., Tseng, M.M. (2000). Architecture of Product Family for Mass
Customization. Proceedings of the 2000 IEEE International Conference on Management of
Innovation and Technology (ICMIT 2000), Vol. 1, pp.437-443.

Du, X., Jiao, J., Tseng, M.M. (2001). Architecture of Product Family: Fundamentals and
Methodology. Concurrent Engineering: Research and Application, Vol. 9(4), pp. 309-325.

Duray, R. (2002). Mass customization origins: mass or custom manufacturing?.

International Journal of Operations and Production Management, Vol. 22(3), pp.314–328.

Duray, R., Ward, P.T., Milligan, G.W., Berry, W.L. (2000). Approaches to mass
customization: configurations and empirical validation. Journal of Operations Management.
Vol. 18(6), pp. 605-625.

Erens, F., Verhulst, K. (1997). Architectures for product families. Computers in

Industry, Vol. 33(2-3), pp.165-78.

Faltings, B., Freuder, E.C. (Ed.) (1998). Configuration - Getting it right. Special issue of
IEEE Intelligent Systems. Vol.13, No. 4, July/August.

Feitzinger, E., Lee, H. (1997). Mass customization at HP. Harvard Business Review,
January–February, pp.116–121.

72
 Franke, N., Schreier, M. (2002). Entrepreneurial Opportunities with Toolkits for User
Innovation and Design. The International Journal on Media Management, Vol. 4(4), pp. 225-
235.

Fujita, K., Ishii, K. (1997). Task Structuring toward Computational Approaches to

Product Variety Design. Proceedings of ASME Design Engineering Technical Conferences
(DETC’97), DETC97/DAC-3766, Sacramento, California, USA.

Galsworth, G.D. (1994). Smart, simple design: Using variety effectiveness to reduce
total cost and maximize customer selection. Essex Junction, Vt., Omneo.

Gilmore, J.H., Pine, B.J. (1997). The four faces of mass customization. Harvard
Business Review, Vol. January-February, pp. 91-101.

Guttman, R.H., Maes, P. (1999). Agent-mediated integrative negotiation for retail

electronic commerce. Agent Mediated Electronic Commerce: First International Workshop on
Agent Mediated Electronic Trading, AMET-98, Minneapolis, MN, USA.

Hart, C.W.L. (1995). Mass Customization: Conceptual under pinnings, opportunities

and limits. International Journal of Service Operations, Vol., pp33-45.

Hegge, H.M.H., Wortmann, J.C. (1991). Generic Bill-of-Material: A New Product Model.
International Journal of Production Economics, Vol. 23(1–3), pp. 117–128.

Huffman, C., Kahn, B.E. (1998). Variety for Sale: Mass Customization or Mass
Confusion?. Journal of Retailing, 74(2), Winter.

Heiskala, M., Paloheimo, K., (2005), "Mass customization of services: Benefits and
challenges of configurable services", Software Business and Engineering Institute.

Heiskala, M., Tiihonen, J., (2009), "Mass customization with configurable services:
Service modeling", Helsinki University of Technology, BIT Research Center.

Helander, M., Jiao, J. (2002). Electronic product development for mass customization.
Proceedings of the conference WWDU, Germany.

Hill, T. (1993). Manufacturing strategy: the strategic management of the manufacturing

function. Basingstroke, New York, NY: The Macmillan Press.

Hoekstra, S., Romme, J. (1992). Integrated Logistic Structures: Developing Customer

Oriented Goods Flow. McGraw-Hill, London.

Holweg, M., Pil, F.K. (2001). Successful Build-to-Order Strategies Start With the
Customer. MIT Sloan Management Review, Vol. 43, pp. 74-83.

Huang, G.Q., Simpson, T.W., Pine II, B.J. (2005). The power of product platforms in
mass customization. International Journal of Mass Customisation, Vol. 1(1), pp. 1-13.

Huffman, C., Kahn, B.E. (1998). Variety for sale: mass customization or mass
confusion?. Journal of Retailing, Vol. 74, No. 4, pp.491–513.

Inala, K. (2007) Assessing product configurator capabilities for successful mass

customization. Masters of Science Thesis. University of Kentucky: Archive.uky.edu

73
 Jiao, J. (1998). Design for Mass Customization by Developing Product Family
Architecture. PhD Thesis, Hong Kong University of Science and Technology.

Jiao, J., Tseng, M.M. (1999). A methodology of developing product family architecture
for mass customization. Journal of Intelligent Manufacturing, Vol. 10 pp.3-20.

Jiao, J., Tseng, M.M. (2000). Understanding product family for mass customization by
developing commonality indices. Journal of Engineering Design, Vol. 11(3), pp. 809–821.

Jiao, J., Ma, Q., Tseng, M.M. (2003). Towards high value-added products and services:
mass customization and beyond. Technovation, Vol. 23, pp. 809–821.

Jiao, J., Tseng, M.M. (2004). Customizability Analysis in Design for Mass
Customization. Computer-Aided Design, Vol. 36(8), pp. 745-757.

Jiao, J., Tseng, M.M., Ma, Q., Zou, Y. (2000). Generic Bill of Materials and Operations
for High-Variety Production Management. Concurrent Engineering: Research and
Application, Vol. 8(4), pp. 297–322.

Jiang, P., Zhao, X., Yang, B., Zhao, L., Tan, R. (2007). The Product Family Design
Based on Axiomatic Design. IEEE International Conference on Industrial Engineering and
Engineering Management, pp. 758-762.

Jørgensen, K.A. (2008). Product Configuration and Product Family Modelling. Aalborg
University, Department of Production Working Paper, February.

Jørgensen, K.A., Petersen, T.D. (2005). Product Modelling on Multiple Abstraction

Levels. IMCM’05, Klagenfurt, Austria, June 2-3.

Kilger, C., Reuter, B. (2005). Collaborative planning. Supply Chain Management and
Advanced Planning, pp.259–278.

Kok, R. (2007). A supply-driven construction industry for transportation infrastructure.

Master of Science graduation thesis. Transport, Infrastructure & Logistics. Delft University of
Technology.

Kotha, S. (1995). Mass Customization: Implementing the Emerging Paradigm for

Competitive Advantage. Strategic Management Journal, Vol. 16, pp. 21-42.

Kovse, J., Harder, T., Ritter, N. (2002). Supporting mass customization by generating
adjusted repositories for product configuration knowledge. Department of computer science,
University of Kaiserslautern, Germany.

Lampel, J., Mintzberg, H., (1996). Customizing customization. Sloan Management

Review, Vol., 38(1), pp. 21-29.

Leckner, T. (2003). Support for online configurator tools by customer communities.

Department of informatics, Technische Universitat Munchen.

Leckner, T., Lacher, M.. (2003). Simplyfying configuration through customer oriented
product models. International Conference on Engineering Design, Stockholm.

Lu, S. (2003). Engineering as Collaborative Negotiation: A New Paradigm for

Collaborative Engineering, http://wisdom.usc.edu/ecn/index.htm

74
 Luecke, R., Katz, R. (2003). Managing Creativity and Innovation. Harvard Business
School Press, Boston, MA.

MacCarthy. B., L., Brabazon, P., G., Bramham, J., (2003). Fundamental modes of
operation for mass customization. International Journal of Production Economics, Volume
85, Number 3, pp 289 – 304.

Mannisto, T., Peltonen, H., Sulonen, R. (1996). View to product configuration

knowledge modeling and evolution in configuration. Papers from AAAI fall Symposium,
pp.111-118.

Martin, M.V. (1999). Design for variety: A methodology for developing product platform
architectures. Mechanical Engineering Thesis, 172 pages, Stanford University, Stanford,
California, USA.

Martin, M. V., Ishii, K. (1997). Design for Variety: Development of Complexity Indices
and Design Charts. Proceedings of the 1997 ASME Design Engineering Technical
Conferences (DECT'97), Sacramento, California, USA, September 14 – 17.

Martin, M.V., Ishii, K. (2000). Design for variety: a methodology for developing product
platform architectures. Proceedings of ASME Design Engineering Technical Conferences
(DETC’2000), September 10-14, Baltimore, Maryland, USA.

McCutcheon, D.M., Raturi, A.S., Meredith, J.R., (1994). The customization-

responsiveness squeeze. Sloan Management Review, Vol. 5, pp. 89-99.

McKay, A., Erens, F., Bloor, M.S. (1996). Relating Product Definition and Product
Variety. Research in Engineering Design, Vol. 8(2), pp. 63–80.

Mesihovic, S., Malmqvist, J. (2000). Product data management (PDM) system support
for the engineering configuration process. 14th European Conference on Artificial Intelligence
ECAI, Berlin, Germany.

Meyer, M.H. (1997). Revitalize Your Product Lines Through Continuous Platform
Renewal. Research-Technology Management, Vol.40(2), pp. 17-28.

Meyer, M.H., Lehnerd, A.P. (1997). The Power of Product Platforms: Building Value
and Cost Leadership. Free Press, New York, NY.

Meyer, M.H., Utterback, J. (1993). The Product Family and the Dynamics of Core
Capability. Sloan Management Review, Spring, pp. 29-47.

Mikkola, J.H., Skjott-Larsen, T. (2004). Supply-chain integration: implications for mass

customization, modularization and postponement strategies. Production Planning and
Control, Vol. 15(4), pp. 352-361.

Miles, C., McCathy, J., Dix, A., Harrison, M., Monk, A. (1993). Review designs for a
synchronous-asynchronous group edition environment. Computer supported collaborative
writing. London: Springer-Verlag.

Mittal, S., Frayman, F. (1989). Towards a generic model of configuration tasks. 11th
International joint conference on Artificial Intelligence, USA.

75
 Monplaisir, L.F., Salhieh, S.M. (2002). Collaborative product design and development:
a case study integrating computer-supported collaborative work with quality function
development. Collaborative Engineering for Product Design and Development, American
Scientific Publishers, pp.125–139.

Muffatto, M., Roveda, M. (2003). Product architecture and platforms: A conceptual

framework. International Journal of Technology Management, 24(1), pp. 1-16.

Newcomb, P.J., Bras, B., Rosen, D.W. (1996). Implications of modularity on product
design for the life cycle. Proceedings of ASME Design Engineering Technical Conferences
(DETC’96), DETC96/DTM-1516, Irvine, California, USA.

Olhager, J. (2003). Strategic positioning of the order penetration point. International

Joournal of Production Economics, 85(3), pp. 319–329.

Piller, F.T. (2001). Mass customization. Ein wettbewerbssstrategisches konzept im

informationszeitalter. Wiesbaden, Gabler Deutscher Universitatas-Verlag.

Piller, F.T. (2004). Closing Remarks: Future issues in product configuration from a
management research perspective. International Conference on Economic, Technical and
Organisational aspects of Product Configuration Systems, Technical University of Denmark,
28-29 June. Copenhagen (Denmark).

Piller, F.T., Moeslein, K., Stotko, C.M. (2004). Does mass customization pay? An
economic approach to evaluate customer integration. Production Planning and Control, Vol.
15, No. 4, pp.435–444.

Pine, B.J. (1993). Mass Customization : The New frontier in Business Competition.
Boston, MA.

Pine, B.J., Gilmore, J.H. (1999). The Experience Economy. Harvard Business School
Press. Boston, Mass.

Pine, B.J., Victor, B., Boynton, A.C. (1993). Making mass customization work. Harvard
Business Review, September–October, pp.108–119.

Robertson, D., Ulrich, K. (1998). Planning for Product Platforms. Sloan Management
Review, Summer, pp.19-31.

Rudberg, M., Wikner, J. (2004). Mass customization in terms of the customer order
decoupling point. Production Planning & Control, 15(4), pp. 445-458.

Sabin, D., Weigel, R. (1998). Product configuration frameworks – a survey. IEEE

Intelligent Systems, July–August, pp.42–49.

Salvador, F., Forza, C., Rungtusanatham, M. (2002). How to mass customize: Product
architectures, sourcing configurations. Business Horizons, vol. 45, p. 61.

Salvador F., Holan, P. de M., Piller F. (2009). Cracking the Code of Mass
Customization. Sloan Management Review, April 1.

Salvador, F., Forza, C. (2004). Configuring products to address the customization

responsiveness squeeze: a survey of management issues and opportunities. International
Journal of Production Economics, Vol. 91, No. 3, pp.273–291.

76
 Sawhney, M.S. (1998). Leveraged High-Variety Strategies: From Portfolio Thinking to
Platform Thinking. Journal of the Academy of Marketing Science, Vol. 26(1), pp.54-61.

SCC (2006), Supply chain operations reference model : SCOR 8.0, Supply Chain
Council, Washington.

Schubert, P. (2000). The participatory electronic product catalog: Supporting customer

collaboration in E-Commerce applications. Electronics Markets Journal, Vol. 10, pp. 229.

Schuh, G., Assmus, D., Zancul, E. (2005). Product Structuring - the Core Discipline of
Product Lifecycle Management. 13th CIRP International Conference on Life Cycle
Engineering, (LCE2006). Leuven (Belgium), May 31-June 2.

Schwartz, B. (2003). The Paradox of Choice: Why More Is Less. Ecco.

Shooter, S.B., Simpson, T.W., Kumara, S.R.T., Stone, R.B., Terpenny, J.P. (2005).
Toward a multi-agent information management infrastructure for product family planning and
mass customization. International Journal of Mass Customisation, 1(1).

Siddique, Z. (2000). Common Platform Development: Designing for Product Variety.

Ph.D. dissertation. Department of Mechanical Engineering. Georgia Institute of Technology,
Georgia, USA.

Simpson, T.W. (1998). A concept exploration method for product family design. Ph.D.
Dissertation. George W. Woodruff School of Mechanical Engineering. The Georgia Institute
of Technology, USA.

Simpson, T.W. (2005). Methods for optimizing product platforms and product families:
overview and classification. In: Simpson, T.W., Siddique, Z., Jiao, J. (eds) Product platform
and product family design: methods and applications. Springer, New York, pp 133–156.

Songlin Chen, Yue Wang, Mitchell M. Tseng, (2009), “Mass customization as a

collaborative engineering effort”, Int. J. Collaborative Engineering, Vol. 1

Spring, M., Dalrymple, J.F. (2000). Product customization and manufacturing strategy.
International Journal of Operations and Production Management, Vol. 20, No. 4, p.441.

Stegman, R., Koch, M., Lacher, M., Leckner, T., Renneberg, V. (2003). Generating
personalized recommendations in a Model-Based Product configurator system. Department
of Informatics, Technische Universitat Munchen, Department of Informatics, Universitat der
Bundeswehr Munchen.

Stolze, M., Strobel, M. (2004). Recommending as personalized teaching. Designing

Personalized User Experiences in eCommerce. Kluwer Academic Publishers, Norwell, MA,
USA.

Sulonen, R., Tiihonen, J., Soininen, T., Männistö, T., (1998). Configurable Products -
Lessons learned from the Finish Industry”, Proceedings of 2nd International Conference on
Engineering Design and Automation, Hawaii.

Svensson, C., Barford, A. (2002). Limits and opportunities for build to order SMEs.
Computers in Industry 49, pp.77-89.

77
 Tezcanli, E. (2006). An analytical survey on customization at modular systems in the
context of industrial design. Master of Science Thesis. Izmir Institute of Technology

Tiihonen, J., Niemela, I., Soininen, T. (2001). Representing configuration knowledge

with weight constraint rules. AAAI Spring Symposium, Stanford.

Tiihonen, J., Soininen, T. (1997). Product configurators- Information systems support

for configurable products. In: Increasing sales productivity through the use of information
technology during sales visit. Hewson Consulting Group.

Tiihonen, J., Soininen, T. (1998). Modeling configurable product families. 4th EDK
Workshop on Product Structuring, Delft University of Technology, Netherlands.

Toffler, A. (1970). Furure Shock. New York

Tseng, M.M., Du, X. (1998). Design by customers for mass customization products.
CIRP Annals, Vol. 47(1), pp. 103-106.

Tseng, M.M., Jiao, J. (1996). Design for mass customization. Annals of the CIRP, Vol.
45, No. 1, pp.153–156.

Tseng, M.M., Jiao, J. (1998). Concurrent design for mass customisation. Business
Process Management Journal, Vol 4(1), pp. 10-24.

Tseng, M.M., Jiao, J. (2000). Fundamental Issues Regarding Developing Product

Family Architecture for Mass Customization. Integrated Manufacturing Systems, Vol. 11(7),
pp. 469-483.

Tseng, M.M., Piller, F.T. (2003). The customer centric enterprise. In Tseng, M. and
Piller, F.T. (Eds.): The Customer Centric Enterprise: Advances in Mass Customization and
Personalization, Springer, Berlin, Hong Kong.

Ulrich, K. (1995). The role of product architecture in the manufacturing firm. Research
Policy, Vol. 24 (3), pp. 419-440.

Ulrich, K., Tung, K. (1991). Fundamentals of product modularity. Procedings of the

1991 ASME Winter Annual Meeting Symposium on Issues in Design/Manufacturing
Integration, Atlanta, GA.

Ulrich, K., Eppinger, S.D. (1995). Product Design and Development. McGraw-Hill, New
York.

Victor, B., Boynton, A. (1998). Invented here, maximizing your organization’s internal
growth and profitability: a practical guide to transforming work. Harvard Business School
Press, Boston, MA.

Von Hippel, E.V. (1998). The Sources of Innovation. Oxford University Press.

Von Hippel, E.V. (2001). Users Toolkits for innovation. Journal of Product Innovation
Management, Vol. 18, pp. 247-257.

Von Hippel, E.V. (2005). Democratizing Innovation. MIT Press, Cambridge, Mass.

78
 Von Hippel, E.V., Katz, R. (2002). Shifting Innovation to Users via Toolkits.
Management Science, Vol. 48, pp. 821-833.

Wikner, J., Rudberg, M. (2004). Mass Customization in terms of the customer order
decoupling point. Production Planning & Control, Vol.15, No. 4, pp.445-458.

Winch, G.M. (2003). Towards a theory of construction as production by projects.

Building Research & Information, Vol.34, No.2, pp.164-174.

Wind, Y., Mahajan, V., Gunther, E. (2002). Convergence marketing- Strategies for
Reaching the New Hybrid Consumer. Prentice Hall, USA.

Wortmann, H.C., Erens, F.J. (1995). Control of Variety by Generic Product Modeling.
Proceedings of The First World Congress on Intelligent Manufacturing Processes and
Systems, Vol. 2, pp. 1327–1342, Univ. Puerto Rico, February 13–17.

Yu, J.S., Gonzalez-Zugasti, J.P. Otto, K.N. (1999). Product Architecture Definition
Based Upon Customer Demands. ASME Journal of Mechanical Design, Vol. 121,
September, pp. 329-335.

Zamirowski, E.J., Otto, K.N. (1999). Identifying Product Portfolio Architecture

Modularity Using Function and Variety Heuristics. Proceedings of ASME Design Engineering
Technical Conferences (DETC’99), September 12-15, Las Vegas, Nevada, USA.

Zhang, M., Tseng, M.M. (2007). A Product and Process Modeling Based Approach to
Study Cost Implications of Product Variety in Mass Customization. IEEE Transactions on
Engineering Management, Vol. 54(1).

Zipkin, P. (2001) “The limits of mass customization”, Sloan Management Review, Vol.
42, No. 3, pp.81–87.

79
 TABLE OF CONTENTS

1. MASS CUSTOMIZATION ................................................................................................... 1 
1.1  INTRODUCTION TO THE NEW PRODUCTION PARADIGM ............................................................. 1 
1.2  MASS CUSTOMIZATION STRATEGIES...................................................................................... 3 
1.2.1  Lampel and Mintzberg´s Model ............................................................................... 3 
1.2.2  Gilmore and Pine´s Model ........................................................................................ 3 
1.2.3  Amaro´s Model ......................................................................................................... 4 
1.2.4  Duray´s Model .......................................................................................................... 6 
1.2.5  Da Silveira’s Model ................................................................................................... 7 
1.2.6  MacCarthy´s Model .................................................................................................. 8 
1.2.7  Rudberg and Wikner’s Model ................................................................................... 9 
1.2.8  Kok’s Model ............................................................................................................ 12 
1.3  KEY FACTORS FOR SUCCESS OF A MASS CUSTOMIZATION SYSTEM ............................................. 13 
1.3.1  Customer Sensitivity ............................................................................................... 14 
1.3.2  Process Amenability ............................................................................................... 14 
1.3.3  Competitive environment ....................................................................................... 15 
1.3.4  Organizational Readiness ....................................................................................... 15 
1.4  HOW TO MAKE MASS CUSTOMIZATION WORK ..................................................................... 16 
1.4.1  Solution Space Development .................................................................................. 16 
1.4.2  Robust Process Design ............................................................................................ 17 
1.4.3  Choice Navigation .................................................................................................. 17 
1.5  MASS CUSTOMIZATION AS A COLLABORATIVE EFFORT ............................................................ 19 
1.5.1  Co‐Innovation ......................................................................................................... 21 
1.5.2  Co‐Configuration .................................................................................................... 22 
1.5.3  Co‐Production ......................................................................................................... 23 
1.6  MASS CUSTOMIZATION FUTURE STEPS: THE EXPERIENCE ECONOMY ......................................... 24 
2. PRODUCT CONFIGURATION AND PRODUCT CONFIGURATORS ...................................... 25 
2.1  CONFIGURABLE PRODUCTS................................................................................................ 25 
2.2  PRODUCT FAMILY ARCHITECTURE AND MODULARITY ............................................................. 26 
2.2.1  Main issues involved in a Product Family Architecture .......................................... 26 
2.2.2  Managing Variety Inside a Product Family ............................................................ 33 
2.2.3  Systematizing Product Family Development .......................................................... 36 
2.3  CONFIGURATION PROCESS ................................................................................................ 40 
2.4  PRODUCT CONFIGURATORS ............................................................................................... 41 
3. OPEN‐INNOVATION METHODS AND TOOLKITS .............................................................. 45 
3.1  OPEN INNOVATION .......................................................................................................... 45 
3.2  OPEN INNOVATION METHODS AND TOOLKITS ....................................................................... 46 
3.2.1  The Lead User Method ........................................................................................... 46 
3.2.2  Toolkits for Open Innovation .................................................................................. 47 
3.2.3  Innovation Contests and “Broadcast Search” Platforms ........................................ 48 
4. ANALYSIS AND RECOMBINATION. THE GREY ZONE INBETWEEN PURE AND TAYLORED 
CUSTOMIZATION: CO‐ADAPTATION .................................................................................. 49 
4.1  CO‐INNOVATION, CO‐SERVICE AND CO‐ADAPTATION CONCEPTS ............................................. 49 
80
 4.2  CO‐INNOVATION, CO‐SERVICE AND CO‐ADAPTATION TOOLKITS ............................................... 53 
4.2.1  Co‐Innovation, Co‐Service and Co‐Adaptation Toolkits. An Introduction .............. 54 
4.2.2  Co‐Adaptation Toolkits ........................................................................................... 55 
4.3  TOOLKITS FOR CUSTOMIZING MASS CUSTOMIZATION ............................................................. 57 
5. TOWARDS MASS CUSTOMIZATION ................................................................................ 60 
5.1  TWO ORIGINS: MASS PRODUCTION AND PURE CUSTOMIZATION .............................................. 60 
5.2  MERCEDES VS. IRIZAR MASS CUSTOMIZATION STRATEGIES ...................................................... 62 
5.3  IRIZAR’S MASS CUSTOMIZATION DECISION SUPPORT PROCEDURE AND TOOLKITS ........................ 64 
5.3.1  Toolkit for Cosmetic Customization........................................................................ 67 
5.3.2  Toolkit for Layout Customization ........................................................................... 67 
5.3.3  Toolkit for Solution’s Space’s Development/ReDesign ........................................... 68 
5.3.4  Toolkit for Safety Rules Analysis ............................................................................. 69 
5.3.5  Irizar’s Conclusions ................................................................................................. 70 
5.4  TOOLKITS GENERAL CONCLUSIONS ..................................................................................... 70 
6. REFERENCES .................................................................................................................. 71 

81