MASS CUSTOMIZATION AT HEWLETT-PACKARD - THE POWER OF POSTPONEMENT

In many mass markets, companies are facing a predicament: customers ar e demanding not only ever faster order fulfillment but also highly cus tomized products and services. Edward Feitzinger and Hau Lee show how the Hewlett-Packard Company and others have proved that one indeed can deliver customized products quickly and at a low cost. The key to mas s-customizing effectively is postponing the task of differentiating a product for a specific customer until the latest possible point in the supply network ia company's supply, manufacturing, and distribution c hain]. Instead of taking a piecemeal approach, companies must rethink and integrate the designs of their products, the processes used to mak e and deliver those products, and the configuration of their entire su pply network. By adopting such a comprehensive approach, they can oper ate at maximum efficiency and quickly meet customers' orders with a mi nimum amount of inventory. Three organizational design principles toge ther form the basic building blocks of an effective mass-customization program. First, a product should be designed so that it consists of i ndependent modules that can be assembled into different forms of the p roduct easily and inexpensively. Second, manufacturing processes shoul d be designed so that the): too, consist of independent modules that c an be moved or rearranged easily. Third, the supply network should be designed to supply the basic product to the facilities performing the customization in a cost-effective manner. It should have the flexibili ty and responsiveness to take individual orders and deliver the finish ed, customized goods quickly.