Lean Manufacturing Best Practices for Mass Customization

Introduction

Manufacturers are seeking greater levels of product and service differentiation to extend their product lifecycles while also attaining cost reductions through process efficiencies and the use of lean manufacturing techniques. The use of mass customization across all product lines — and build-to-order specifically — is redefining manufacturing strategies from being purely efficiency-driven to being significant from a selling standpoint as well (Sharma, LaPlaca, 476). Lean process efficiency applied to mass customization, build-to-order, configure-to-order, and engineer-to-order delivers financial results when these lean manufacturing techniques are integrated with supply chain, manufacturing scheduling, and product systems.

Table 1, Financial Impact of Lean Manufacturing Applied to Build-to-Order Workflows (shown in the Appendix) provides a financial analysis of the benefits manufacturers can realize when they automate these product workflows. To attain these levels of financial performance, lean manufacturing techniques including Six Sigma are often applied to quoting, sales and product configuration, manufacturing workflows, and logistics processes to ensure the highest level of performance possible. The intent of this analysis is to evaluate how lean manufacturing techniques are delivering financial performance improvement based on more efficient process execution and continual improvement — choosing the best possible mass customization strategy given internal constraints, resources, and strengths (Cavusoglu, Cavusoglu, Raghunathan, 16, 17).

Applying Lean Manufacturing Techniques to Mass Customization

Manufacturers who adopt and continually strive to improve their mass customization, build-to-order, configure-to-order, and engineer-to-order strategies rely on value stream mapping to identify areas of relative strength or weakness (Chandandeep, 405, 406). In conjunction with value stream mapping, manufacturers are also relying on the Six Sigma DMAIC process (Reidenbach, Goeke, 46, 47), which stands for Define, Measure, Analyze, Improve, and Control.

Each of these five areas of the Six Sigma methodology collectively contribute to ensuring that manufacturing processes being transformed toward greater efficiency — that is, made leaner — remain focused on customers' unmet needs. The fact that lean manufacturing implementations are most successful when they are anchored in the unmet, urgent needs of customers is a critical point of the DMAIC methodology in general and Six Sigma specifically (Hallgren, Olhager, 978, 979). The prioritization of customer needs throughout the entire Six Sigma process is also captured in the Voice of the Customer synthesis, which occurs as part of the DMAIC methodology over time (Reidenbach, Goeke, 45, 46). Implicit in Six Sigma are the initially conflicting dual roles of optimizing performance and reducing process costs while simultaneously creating enough agility and lean-based workflows to keep the processes — and therefore the entire company — more customer- and demand-driven.

The use of lean manufacturing processes, principles, and techniques is especially relevant in the context of creating mass customization, build-to-order, configure-to-order, and engineer-to-order workflows. The implications of including Six Sigma workflows in product designs also become especially relevant in the context of product lifecycle management (PLM) synchronization and planning (Kumar, Wellbrock, 15). The process improvements achieved for one specific product generation need to be included and integrated into each subsequent product generation to be effective in attaining lean manufacturing benchmarked performance objectives (Searcy, 34, 35). This continual progression of process improvement — catalyzed by lean manufacturing techniques — is what makes the attainment of the longer-term financial metrics of performance shown in Table 1 achievable.

Because Six Sigma methodologies contribute to mass customization primarily by removing unpredicted variability within actual manufacturing strategies (Hallgren, Olhager, 979, 980), a clear definition of each specific customization strategy is necessary. Table 2, Definition of Mass Customization Production Strategies, provides the necessary framework for determining to what extent Six Sigma needs to be employed as a lean manufacturing strategy. Each level of customization is associated with a unique set of DMAIC requirements and variations in how the Voice of the Customer phases of the Six Sigma methodology are managed throughout PLM strategies.

Table 2: Definition of Mass Customization Production Strategies
Sources: (Cavusoglu, Cavusoglu, Raghunathan, 12–28) (Hallgren, Olhager, 976–999) (Kumar, Craig, 194–214) (Sharma, LaPlaca, 476–486)

Conclusion

The use of lean manufacturing strategies including Six Sigma is successfully being used for the continual improvement of mass customization, build-to-order, configure-to-order, and engineer-to-order strategies in manufacturers globally (Reidenbach, Goeke, 49). The integration of Six Sigma-based lean techniques into companies' PLM strategies is also showing significant potential for the development of metrics-based reporting that ties performance to lean process improvement outcomes (Hallgren, Olhager, 998).

The development of mass customization strategies that are agile enough to respond to customer needs while stable enough to deliver financial performance gains is critically important during periods of economic turbulence. For manufacturers to attain the levels of performance shown in Table 1, it is essential that the Six Sigma DMAIC methodology becomes embedded in core process areas over time. The consistent use of lean manufacturing approaches can deliver exceptional financial results, but only when accompanied by a continual focus on driving variability out of the production strategies shown in Table 2.

Continual efforts to achieve exceptional production performance must also be guided by metrics capable of capturing how customer perceptions change over time. The metrics shown in Table 3 represent the kinds of scorecards used to measure the impact of lean manufacturing initiatives and ensure that efficiency gains translate into lasting customer value.

References

Cavusoglu, Hasan, Huseyin Cavusoglu, and Srinivasan Raghunathan. "Selecting a Customization Strategy Under Competition: Mass Customization, Targeted Mass Customization, and Product Proliferation." IEEE Transactions on Engineering Management 54.1 (2007): 12–28.

Grewal, Chandandeep. "An Initiative to Implement Lean Manufacturing Using Value Stream Mapping in a Small Company." International Journal of Manufacturing Technology & Management 15.3/4 (2008): 404–417.

Hallgren, Mattias, and Jan Olhager. "Lean and Agile Manufacturing: External and Internal Drivers and Performance Outcomes." International Journal of Operations & Production Management 29.10 (2009): 976–999.

Kumar, Sameer, and Sarah Craig. "Dell, Inc.'s Closed Loop Supply Chain for Computer Assembly Plants." Information Knowledge Systems Management 6.3 (2007): 197–214.

Kumar, Sameer, and James Wellbrock. "Improved New Product Development through Enhanced Design Architecture for Engineer-to-Order Companies." International Journal of Production Research 47.15 (2009).

Reidenbach, R. Eric, and Reginald W. Goeke. "Six Sigma, Value and Competitive Strategy." Quality Progress 40.7 (2007): 45–49.

Searcy, DeWayne L. "Developing a Lean Performance Score." Strategic Finance 91.3 (2009): 34–39.

Sharma, Arun, and Peter LaPlaca. "Marketing in the Emerging Era of Build-to-Order Manufacturing." Industrial Marketing Management 34.5 (2005): 476–486.