Configurator knowledge

Mass customization: Individualization by configurator

Customization is a trending topic. But what is it about the approach that everything gets better with increa-sing individualization? For companies, for consumers, for the environment? Which industries use configura-tors to offer their products in a way that can be customized? And what does the market for customizable products look like in Germany? We have created a brief overview of this!

Mass customization: Individualization by configurator

What does "mass customization" mean?

Mass customization refers to the manufacturing of customized products. In the manufacturing process, however, the high costs of individual production should not apply, but much lower costs by using the prin-ciple of mass production. Batch size 1 or customized mass production is also used as a synonym for mass customization. It is clear that mass customization in manufacturing is the future. Only in this way the indust-ry can respond to the special wishes of consumers. And this focus requires a high level of product differen-tiation while maintaining the scaling effects of mass production.

 

Lot size 1 - magic word or old hat?

Batch size 1 or individual production has long been a reality in the automotive industry. In special plant en-gineering, too, every component is actually a universal single piece, and in medical technology this is also true in many areas. So why the euphoria? It's simple: new technologies (keyword IoT technologies, additive manufacturing) are bringing the production of small batches into the economic zone for other industries as well. This means that batch size 1 is gaining in importance in classic mass production.

Production in batch size 1 or mass customization is an essential goal of Industry 4.0. Digitized production processes deliver live data in real time and ensure that all companies involved in production can work to-gether seamlessly and efficiently. The result: extremely high adaptability and flexibility along the entire supply chain.

 

Manufacturing principles for customized products

There are different principles according to which "individualized" manufacturing can be carried out:

Assemble to Order (ATO)

In the areas of development, construction, procurement and production, production is based on forecasts. The specific variation is only completed when individual customer requests are received in production. This means that from final assembly and distribution, production is customer-specific, i.e. order-driven.

Build to Order (BTO) or Make to Order (MTO)

Production is triggered by customer orders. The customer order is forecast-driven in the areas of develop-ment and construction. Procurement, production, final assembly and distribution are order-driven. This means that the fulfillment of customer requirements is associated with longer delivery times.

Engineer to Order (ETO)

The development and construction process is only triggered after a customer order has been received. The areas of construction, procurement, production, final assembly and distribution are all order-driven at En-gineer to Order.

The basic requirement for all concepts is that the processes between suppliers, producers and customers run without interruption and error-free in order to achieve cost, time, quality, flexibility and service advan-tages.

Tip: The transition to customized mass production should not be underestimated, as the business model must be changed. The most successful companies in the field of customization are currently startups, as they have been confronted with this business model since the beginning with a focus on digitalization. The furniture industry, for example, would have immense potential and is also gradually letting its customers configure products. However, they have to wait months for delivery afterwards. This is not what is meant by optimal mass customization. Curious now? For more in-depth information, we recommend the interview with Interview with Prof. Frank T. Piller.

 

What does customization have to do with the use of configurators? 

“The customer is king” takes on a completely new dimension when it comes to customization. Ideally, prod-ucts are designed, ordered and commissioned by the customer himself with the help of a configurator. Product configurators, CPQ configurators or variant configurators are digital applications that are extreme-ly important as customer touch points. Even if accompanying sales talks take place (mainly in the B2B ar-ea), the usability of the configurator is crucial for the entire buying, ordering and manufacturing process. Because the configurator ensures that the functionality of the end product is guaranteed and that the tech-nical feasibility in production is also taken into account. For this reason, configurators for commercial end products always offer a clearly defined solution space that is illustrated using product logic.

Today configurators are highly efficient sales tools. In the B2B area, the terms Offer or CPQ Configurator (Configure Price Quote) or Guided Selling Tool have established themselves. Thanks to 3D rendering in real time, they deliver perfect models of the customized products with all product specifications for a wide vari-ety of ERP and CRM systems.

Successful examples of configurators:

 

But what about the environment?

Sustainability, environmental protection and climate change are no longer niche topics. The realignment of conventional consumption patterns will literally be vital for survival in the coming decade. Companies that want to remain fit for the future have to recognize ecological potential and act today. The advantages of customer-specific and customized production are primarily the efficient use of re-sources:

  • Suppliers ideally produce for specific needs; customization leads to reduced returns, reduced stocks and reduced overproduction.
  • Recycling, repair and reuse are made easier because products are easier to locate at the end of their lifetime (via stored customer data).
  • A modular product architecture also improves the recyclability of products.
  • Customers have the opportunity to configure the most sustainable variation of a product.

In addition, an amount of customer data and information about customer needs can be obtained that are difficult to determine using traditional market research methods. This gives companies an additional in-strument for anticipating market developments at an early stage. If mass customization is not viewed as a mere goal, but as a process of approaching the wishes of customers, new and environmentally friendly business models can be developed. The  free publication​​​ ​​ “A Sustainability Assessment of Smart Innovations for Mass Production, Mass Customization and Direct Digital Manufacturing”. provides more extensive information on the sustainability of different production processes in connection with the Industry 4.0.

 

Mass customization and the use of configurators in Germany

German industry shows a clear trend towards customization. In the German Industry 4.0 Index from 2018, 20 percent of 400 companies surveyed stated that they had realized lot size 1. In the next few years, almost 50 percent wanted to implement individual products at the cost of series production. Six out of ten of the companies surveyed at the time considered lot size 1 to be an important factor for the economic success of their company.
In the consumer goods sector, Germany leads the world in offering customized solutions. As the largest online collection of digital product configurators, the Configurator Database Report provides the following figures for the use of product configurators in global comparison:

Mass customization: Individualization by configurator

If we look at the sectors in Germany that use 3D configurators in sales, the "Home & Garden" sector leads the way:

Mass customization: Individualization by configurator

Conclusion

In the course of Industry 4.0, the trend is clearly moving in the direction of mass customization and lot size 1. Product configurators are a useful tool here and offer both customers and manufacturers countless advan-tages.  Today's and tomorrow's customers demand customizable products, which they can design simply and easily. Manufacturers, on the other hand, benefit from the use of a configurator by reducing the need for consultation and making the sales process more efficient.

 

 

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