The University of Nottingham

Selecting a Mode

Given that an enterprise has decided to be a mass customizer, the question is which Mode or Modes are suitable? Market conditions and the cost and performance implications of changing the envelope of customizations on offer should influence strongly the selection of Mode.

Four selection factors are described below and, depending on how their status, the guidance for mode selection is as follows:

If factor (i) or (ii) are rated as high, the enterprise should not follow Mode A (Catalogue MC). Across all of the Modes, it is in Mode A that an enterprise has the highest degree of self determination over the customization it offers. Customer power or a need among customers for product differentiation reduce the level of control and increase uncertainty over what customers will be seeking.

If factor (iii) is rated as high, the enterprise should not follow Modes B or C. These two Modes involve customization on a once-off basis, but a high cost of introducing a new customization threatens the economics of these Modes. Either Mode D or E, in which the enterprise can spread the cost over repeat sales, would be better fits for this enterprise.

If factor (iv) is rated as high, the enterprise should not follow Modes B or D. These two Modes involve customization without modifying the order fulfilment realisation resources. An enterprise can operate in these Modes if new customizations have little bearing on the resources. But if it is difficult for the enterprise to perform customization using their existing resources they should be operating in Mode C or E.

Operating in multiple Modes

An enterprise can operate in more than one MC Mode. Some customers can be restricted to a Catalogue of options (Mode A) at the same time as other customers can request special customizations. Commercial vehicle manufacturers operate in two modes, with retail customers buying from a catalogue but for fleet buyers, such as utility companies, the manufacturer is prepared to adapt the vehicle further.

Standard Catalogue variants of the Ford Transit

Special versions

Table: Selection factors

Mode Selection Factor	Description
i. Customer power	The more powerful the customer the greater the pressure they can exert to reduce their compromise in a purchase and demand a customization that meets their needs more precisely than pre-engineered options in a catalogue.
ii. The strength of customer desire for differentiation from other customers	Resellers are an example of customers that value differentiation. They seek to offer unique advantages to their customers and one approach is to offer distinctive and unique versions of products, or to promote the product in a unique manner. Consequently, to get unique products they can push customizers to go beyond the boundaries of their standard catalogue options.
iii. Cost of engineering and mobilising an additional option	Low costs are achieved either by efficiencies in engineering and mobilisation of order fulfilment resources (including taking on new suppliers or procuring additional equipment), or due to re-usability of designs and processes such that the development cost can be shared across customizations.
iv. Implications of a new variant on order realisation	If further variants of a product are, in effect, unique permutations of a standard set of components, a new variant may have little impact on sourcing arrangements, costs, quality and lead time. If new customizations create problems for the existing resources, it could be sensible for the enterprise to make modifications such as link to new suppliers or materials or processes.

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