Mass Customization doesn't mean mass produced.
Mass customization refers to a customer co-design process of products and services which meet the needs of each individual customer with regard to certain product features . All operations are performed within a fixed solution space, characterized by stable but still flexible and responsive processes. As a result, the costs associated with customization allow for a price level that does not imply a switch in an upper market segment.
Some more discussion of the main points of this definition:
- Customer co-design: The genus of mass customization is customer co-design. Customers are integrated into value creation by defining, configuring, matching, or modifying an individual solution. Customization demands that the recipients of the customized goods transfer their needs and desires into a concrete product specification. Different to a do-it-yourself (DIY) setting (i.e. autonomous creation activities of consumers), this is done in a mode of interacting with the manufacturer who is responsible for providing the custom solution (“co-creation”, Ramirez 1999). Co-design activities are performed in an act of company-to-customer interaction and cooperation. Without the customers' deep involvement, the manufacturer would be unable to adequately fill each individualized product demand. In my understanding, co-design is the core element that differentiates mass customization from other strategies like agile manufacturing or postponement strategies in the distribution chain. Customer co-design in a mass customization context establishes an interaction between the manufacturer and customer which offers also possibilities for building up a lasting relationship. Once the customer has successfully purchased an individual item, the knowledge acquired by the manufacturer represents a considerable barrier against switching suppliers.
- Meeting the needs of each individual customer: From a strategic management perspective, mass customization is a differentiation strategy. Customers gain from customization the increment of utility of a good that better fits to their needs than the best standard product attainable. The larger the heterogeneity of all customers' preferences, the larger is this gain in utility. From a managerial point of view, customization can be carried out with regard to fit, style, and functionality . To match the level of customization offered by a manufacturer with the customers' needs becomes a major success factor.
- Stable solution space: The space within which a mass customization offering is able to satisfy a customer's need is finite. A successful mass customization system is characterized by stable but still flexible and responsive processes that provide a dynamic flow of products. Value creation within a stable solution space is the major differentiation of mass customization versus conventional (craft) customization. A traditional (craft) customizer re-invents not only its products but also its processes for each individual customer. But a mass customizer uses stable processes to deliver high variety goods.
- Adequate price and cost level : Mass customization practice shows that consumers are frequently willing to pay a price premium for customization to reflect the increment of utility they gain from a product that better fits to their needs than the best standard product attainable But mass customization goods are still targeting the same market segment that was purchasing the standard goods before. Traditionally, craft customization is related to price premiums of such an extent that it targets a completely different market segment. Premiums of mass customization offerings may be substantial, but have to be still affordable.