Product design for mass customization and postponement.
Technische Universitat Berlin
Institute for Machine Tools and Factory Management
Department of Assembly Technology and Factory Management
Univ.-Prof. Dr.-lng. G. Seliger
Master Thesis
Manufacturing and Factory Planning
Product Design for Mass Customization and Postponement
presented by
Suriati Akmal
Matriculation Number 22764 7
supervised by
Dipl.-lng. Marco Zettl
Berlin , 28 April 2006
Eidesstattliche Erklarung
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Berlin, den 28. April 2006
Suriati Akmal
1
Acknowledgement
This Master Thesis represents the essence of achievements during two year of my studies in
Global Production Engineering (GPE) course at Technical University, Berlin. Working with
this thesis has been a very interesting experience. During this period, there have been many
people, who have inspired and guided me through my work in this thesis.
My thesis work has been based on study of mass customization and postponement of mobile
phones. I would like to express appreciation to all people in Global Production Engineering
programme who gave me help in getting valuable information, doing interviews and
answering questions. I would like to express my special thanks to my sponsor Kolej
Universiti Teknikal Kebangsaan Malaysia (KUTKM) and advisor Dipl.-lng. Marco Zettl in
Department of Assembly Technology and Factory Management for the valuable support
during the process of writing the thesis.
Suriati Akmal
11
Abstract
In this era of globalisation there are radical changes taking place that are reshaping the
industrial landscape. The manufacturing industry is facing proliferation of finished products,
rapidly increasing introduction of new products, short product life cycles, and dynamic
market, which becomes truly global.
Customers demand products that are specifically address their needs with low prices, 100
percent on-time delivery, higher quality and a product that they can give added-value when
purchasing the product. The customer demand is no longer predictable and requires large
numbers of product variance. Manufacturers have realised that customer demands are
essential to gain competitive advantage on the global market.
Therefore mass customization and postponement are the strategies that can offer competitive
advantage to overcome this complexity. The customer has been seen as the centre point in
mass customization. This thesis is written to give a practical framework for implement the
concept of mass customization of mobile phones as well as design and methods to implement
it. Initially the concepts of mass customization, postponement and modularization are
presented followed by the prerequisites that a company/manufacturer has to fulfil in order to
successfully implement mass customisation and postponement. This is followed by analysis
of design and components of mobile phone. And then, market survey about customer
requirements in which the customer demands are identified and then translated to strike a
balance between customer requirements and technological capabilities.
The modular components that can be used for mass customization and postponement are then
identified. Finally several practical designs for implementing mass customization of mobile
phones are presented so as to verify the practicality of the research.
111
Zusammenfassung
In der heutigen .Ara der Globalisierung gibt es radikale Veranderungen, die industrielle
Landschaft neu formen. Die verarbeitende Industrie ist konfrontiert mit einer starken
Zunahme von Fertigprodukten, einer schnell anwachsenden Einfiihrung von eben diesen
kurzen Lebenszyklen, und einem dynamischen Markt, der tatsachlich global wird.
Kunden fragen nach Produkten, die ihre spezifischen Bedfirfnisse hinsichtlich eines niedrigen
Preises
ansprechen,
eine
100%-ige
standige
Verfiigbarkeit
haben,
einen
hohen
Qualitatstandard gewahrleisten, und ein Produkt, das ihnen eine Wertschopfung bei
Anschaffung garantiert. Die Kundennachfrage ist nicht ohne weiteres vorhersehbar, deswegen
ist eine grofie Produktvielfalt gefordert. Die Hersteller haben realisiert, dafi das Wissen urn die
Bedfirfnisse der Kunden essentiell sind zur Erreichung von Wettbewerbsvorteile auf dem
globalen Markt.
Dafiir
sind
Mass
Customization
und
Postponement
die
Strategien,
die
die
Wettbewerbsvorteile in Bezug auf die Bewaltigung dieser Komplexitat anbieten. Diese
Masterarbeit ist geschrieben, urn die Liste der Anforderungen an das Produktdesign zu
entwickeln von Mobiltelephone fur Kunden, die im Mittelpunkt der Mass Customization und
Postponement-Strategie stehen. Es ist notig eine optimierte Kundencharakteristik zu
definieren, urn ein mafigeschneidertes Produkt anbieten zu konnen. Die Fragestellung des
Gewerbes ist also die Identifizierung der realen Kundenwiinsche und dann deren Oberfiihrung
in eine LOsung zur Wertschopfung fiber des Angebot zurn Kunden.
Die Wunsche und Bedfirfnisse der Kunden sind identifiziert und umgesetzt in eine Balance
zwischen diesen Anspruchen und technologischen Fertigungsmoglichkeiten. Einer der besten
Wege, urn die Forderungen der Kunden auszurnachen, ist die Annahme deren Perspektiven
durch den Produzenten selbst, urn so eine Nahe zu den Kundenwiinschen zu entwickeln.
Folglich ist eine Untersuchung des Marktes und des Kundenprofiles durchzufiihren, urn ein
gutes Verstandnis der V erbraucherwfinsche zu erreichen.
Die Identifikation der aufiergewohnlichen Kundenwiinsche und deren Verwendung in den
Gestaltungskriterien, erlaubt die Entwicklung benutzerfreundliche, verschiedene Formen
begfinstigende, Mobiltelephone.
IV
Table of Contents
Acknowledgement ............................................................................................................................ i
Abstract ........................................................................................................................................... n
Zusammenfassung .......................................................................................................................... iii
Table of Contents ........................................................................................................................... iv
List of Figures ................................................................................................................................ vi
List of Tables ................................................................................................................................. vii
.
···
. o fAppend Ices
.................................................................................. ..................................... v1n
L1st
List of Abbreviations ...................................................................................................................... ix
1 Introduction ............................................................................................................................... 1
1.1 Background of the Thesis ................................................................................................ 1
1.2 Paradigm Shift ................................................................................................................. 1
1.3 Problem Discussion......................................................................................................... 3
1.4 Thesis Objective .............................................................................................................. 5
1.5 Thesis Outlines and Methodology................................................................................... 5
2
State of the Art .......................................................................................................................... 7
2.1 Mass Customisation ........................................................................................................ 7
2.1.1 General Level ofMass Customization .................................................................... 9
2.1.2 Customizable Product Characteristic .................................................................... 10
2.1.3 Cost ofMass Customization ................................................................................. 11
2.2 Postponement ................................................................................................................ 12
2.3 Design for Mass Customization .................................................................................... 15
2.3.1 Customize Services Surrounded with Standardized Products and Services ......... 15
2.3.2 Customizable Products and Services ..................................................................... 16
2.3.3 Modularize Components to Customize End-Products and Services ..................... 16
3
Features of Organization Implementing Mass Customization ................................................ 20
3.1 Customer Integration ..................................................................................................... 20
3.2 People and Knowledge .................................................................................................. 21
3.3 The Value Chain Integration ......................................................................................... 22
3.4 Information Technology Enabler .................................................................................. 22
3.5 Proactive Management of Product Variations .............................................................. 23
3.6 Adaptation of Production Control ................................................................................. 24
4
Analysis of Design and Component of Mobile Phone ............................................................ 27
v
4.1 Background ofMobile Phones ...................................................................................... 27
4.2 Basic Components of Mobile Phone and their Functions ............................................. 27
4.2.1 Printed Circuit Board ............................... ............................................................. 28
4.2.2 Antenna ................................................................................................................. 29
4.2.3 Display .................................................................................................................. 29
4.2.4 Keypad .................................................................................................................. 30
4.2.5 Battery ................................................................................................................... 30
4.3 Features ofMobile Phones ............................................................................................ 30
4.4 Design of Mobile Phones .............................................................................................. 33
4.4.1 Candy Bar Form Factor ......................................................................................... 33
4.4.2 Clamshell Form Factor .......................................................................................... 34
4.4.3 Slide Form Factor .................................................................................................. 34
5
Identification of Customizable Characteristic ......................................................................... 36
5.1 Market Survey ............................................................................................................... 36
5.1.1 End-User Analysis ................................................................................................. 36
5.1.2 Network Providers Analysis ........................................ ......................................... 38
5.1.3 Mobile Phone Manufacturer Analysis ................................................................... 39
5.2 Translation of Customer Requirements ......................................................................... 40
5.3 Requirements List .................................................................. ....................................... 42
5.4 Customisation ofMobile Phones .................................................................................. 43
6
Development of Customizable Mobile Phones ....................................................................... 48
6.1 Mobile Phone Function Structure ................................................................................. 48
6.2 Working Principle of a Mobile Phone........................................................................... 50
6.2.1 Selecting Suitable Working Principles .................................................................. 50
6.3 Examples of Combination of Principles Solutions ....................................................... 53
6.3.1 Evaluation of Solution........................................................................................... 58
6.3.2 The Benefit of the Solutions .................................................................................. 63
7
Summary and Outlook ............................................................................................................ 64
7.1 The Answer to Main Problem ....................................................................................... 64
7.2 The Limitation of Study .................................... ............................................................ 65
7.3 Further Studies .............................................................................................................. 66
8
References ............................................................................................................................... 67
9
Appendices .............................................................................................................................. 72
VI
List of Figures
Figure 1: The division of product into group based on the point of customer involvement
(adapted from [LAMMIN-96]) ................................................................................... 9
Figure 2: Postponement framework (after Pagh and Copper, 1998) ........................................ 13
Figure 3: Typology of customer order decoupling point (adapted from [TH0-03}) ............... 14
Figure 4 : Basic options for the organizational structure of production (adapted from ............ 25
Figure 5: Manufacturing planning and control depending on lead-time variability (adapted
from [K.AR-89]) ........................................................................................................ 26
Figure 6: An illustration of basic components of mobile phone (after .................................... 28
Figure 7: hnage of Motorola L7 (adapted from Vodafone Catalogue).................................... 33
Figure 8: Example of clamshell design from Motorola (adapted from Vodafone Catalogue) 34
Figure 9: Samsung SGH D500, the stunning slide of its form factor (adapted from
http://www.mobile-review.com) ............................................................................... 35
Figure 10: Graph of features that customers desire for future mobile phones......................... 37
Figure 11 : Example of questionnaire analysis: Decision factors for purchasing a mobile phone
for customers............................................................................................................. 38
Figure 12: Black box model of a mobile phone. ...................................................................... 48
Figure 13: Function structure of mobile phone........................................................................ 49
Figure 14: Schematic diagram of modular mobile phone........................................................ 54
Figure 15: Schematic diagram for candy bar design with customizable solutions.................. 55
Figure 16: Schematic diagram for clamshell design with customizable solutions .................. 56
Figure 17: Schematic diagram for slip design with customizable solutions .......................... .. 57
Figure 18: Graph of factor that influence customer purchasing............................................... 74
Figure 19: Graph of features that customer like most about their current mobile phones....... 74
Figure 20: Graph of features that customer like least about their current mobile phones....... 75
VII
List of Tables
Table 1: Features of mobile phones according to functions ......... ..... ....................................... 32
Table 2: Nokia product platform.............................................................................................. 40
Table 3: QFD for mobile phone. .............................................................................................. 42
Table 4: The customisable product characteristics of mobile phone (after [MBB-03]) ......... . 43
Table 5: Possibilities solutions of customizable mobile phones. ............................................. 46
Table 6: The morphological matrix of mobile phone.............................................................. 52
Table 7: Questions for evaluating the solution based on customer requirements .................... 58
Table 8: Proposed solutions of standardize features and components of mobile phones for
mass customization and postponement strategy........................................................... 60
Table 9: Proposed solutions of customizable features and components of mobile phones for
mass customization and postponement strategy........................................................... 62
List of Appendices
Vlll
List of Appendices
Appendix A: Market questionnaire .......................................................................................... 72
Appendix B: Graph of survey results ....................................................................................... 74
Appendix C: Requirements list for mobile phone .................................................................... 76
List of Abbreviations
List of Abbreviations
ADC
Analogue-to-Digital Converter
ALU
Arithmetic Logic Unit
BOM
Bill of Material
CAD
Computer Aided Design
CAE
Computer Aided Engineering
CAM
Computer Aided Manufacturing
CCD
Charge-Coupled Device
CIM
Computer futegrated Manufacturing
CMOS
Complementary Metal Oxide Semiconductor
CODP
Customer Order Decoupling Point
CONWIP
Constant Work fu Process
CPU
Central Processing Unit
CRM
Customer Relationship Management
CRT
Cathode Ray Tube
DAC
Digital-to-Analogue Converter
EDGE
Enhanced Dta Rates for GSM Evolution
EEPROM
Electrically Erasable Programmable Read Only Memory
EMS
Enhanced Messaging Service
ERP
Enterprise Resource Planning
FEA
Finite Element Analysis
GPE
Global Production Engineering
GPRS
General Packet Radio Sevice
GPS
Global Positioning System
IMAP4
Internet Message Access Protocol
lrDA
Infrared Data Association
IX
List of Abbreviations
IT
Information Technology
KUTKM
Kolej Universiti Teknikal Kebangsaan Malaysia
Li-Ion
Lithium Ion
Li-Po
Lithium Polymer
MC
Mass Customization
MMS
Multimedia Messaging Service
MP
Mass Production
MRP
Material Resource Planning
NiCD
Nickel Cadmium
NiMH
Nickel Metal Hydride
OLED
Organic Light-Emitting Diode
OS
Operating System
PCB
Printed Circuit Board
PDA
Personal Digital Assistance
POP3
Post Office Protocol version 3
QFD
Quality Function Deployment
RAM
Random Access Memory
RF
Radio Frequency
RNIB
Royal Institute of the Blind
ROM
Read Only Memory
SAP
System, Applications and Products in Data Processing
SIM
Subscriber Identification Module
SMS
Short Messaging Service
SMTP
Simple Mail Transfer Protocol
UK
United Kingdom
VGA
Video Graphic Array
WAP
Wireless Access Protocol
X
List of Abbreviations
WMA
Windows Media Audio
xHTML
Extensible HyperText Markup Language
Xl
Introduction
1
1 Introduction
In the first chapter, an overview of the thesis is provided for the reader to become acquainted
with the subject. The thesis's background and a short discussion about the problem are
followed by a presentation of the thesis's purpose, outlines and methodology.
1.1 Background of the Thesis
In this era of globalisation there are radical changes taking place that are reshaping the
industrial landscape. Manufacturing industries are facing proliferation of finished products,
shortening product life cycles, continual improvement of products and process innovations,
computer-integrated manufacturing, quick response to markets, and fragmented markets.
Additionally, customers demand products that are available at any time, in the right quantity
and quality and specifically addressing their needs with lower prices. Moreover customers'
unique needs are no longer predictable but dynamic. Mass production (MP) in which
standardized products, homogenous markets, long product life cycle and long development
cycle were the rules is no longer feasible for many industries where customer requires highly
customized and design-to-order products and where additional services and value-added
benefits like product upgrades and future reconfigurations are important. The swift trends
towards a great number and variety of finished products have lead many companies into
problem with inventories, overhead costs and process efficiencies. For that reason,
manufacturers are struggling to adopt a new paradigm to remain competitive in the market.
1.2 Paradigm Shift
In the early twentieth century, America was an economic power that dominated the world's
production through a system called MP. The system was popularised by Henry Ford where
standardized products were p reduced for homogeneous markets and, 1ong product 1ife and
development cycles were the rule. In the MP paradigm, standard products are exactly
produced through forecasted demand. MP in practise, shares the common goal of developing,
producing, marketing, and delivering products and services at lower prices that a mass of
customers can afford them [PIN-93]. fu this paradigm, to remain competitive, manufacturers
must make a lot of profit by selling a large amount of products in homogeneous markets. Also
in the paradigm manufacturers produce a product or very similar products which are similar
Introduction
2
through entire assembly line where all machine set ups and procedures are standardized. This
requires stability and efficiency of production process, that everything run smoothly, with no
delays, no interruptions, and no changes. M P paradigm greatly depends on stable, steadily
growing demand to keep its wheels turning.
The advent of new technology and the idea of globalisation have reshaped homogeneous
markets. This radical shift, has affected the societies as well. They are much less
homogeneous with regards to gender, lifestyles, demographic, race and so on. The income
distribution is different than it was a century a go, creating a great difference in disposable
income with corresponding disparities in needs and desires. The MP's homogeneous market is
threatened by the changing needs and demands of customers. Consequently, the markets have
become increasingly heterogeneous. The market has changed into fragmented markets where
customers demand for different characteristics of similar products.
These turbulent and global markets, demand for new products that have to be diverted from
older ones and shifting power to customers who demand more variety and customized
products, and want to be treated personally. It is therefore important for new products to meet
customer needs more specifically, to be higher quality and simply to be different from what is
already in the market. In the case of Ford for an instance, at the pinnacle of its age, with the
theme of "any-colour-as-long-as-it's-black" Model T Ford had a 57% market share. However
with several options i.e. colour variations by General Motor, Ford was pulled off its pedestal.
This was due to production's key to success, hard tooling, division of labour, and economies
of scale by standard products, prevented it from offering variety or adapting quickly to
emerging trends [WDDD-90]. Thus, in order to quickly response to heterogeneous markets
where variety and customization of products replaced standardized products, the shortening of
product life cycle and development cycles a new paradigm is needed.
Through the applications of new technology and new management methods, most of
industries practitioners and researches have found a new paradigm that promoting variety and
customization through flexibility and quick responsiveness. This is called mass customization
(MC). MC strives to provide customer satisfaction with increasing product variety and
customization without a corresponding increase in cost and lead-time. While practitioners in
MP share common goal of developing, producing, marketing, delivering products and
services at lower prices that mass of customers can afford them, practitioners of MC share the
goal of developing, producing, marketing, and delivering the products and services with
enough variety and customization that nearly everyone finds exactly what he wants [PIN-93].
Introduction
3
One of the examples of implementing MC is the automobile industry. Automobile industry
has been successfully selling customized cars for years. But since cars are high value
products, therefore higher costs and high lead-time are acceptable by consumers, which are
not the case in other industries. Reducing product costs and lead-times are great challenges
not only for automobile manufacturers but also in many other branches. Postponement
concept, that is the shift of the complete product assembly towards the consumer, is an
opportunity to curb these challenges. In an ideal case, personal in contact with the customer or
even the consumer himself is customizing the product. One product-sided condition for
efficient MC and postponement is a well-developed modular product structure.
1.3 Problem Discussion
In MC, a company that better satisfies its customers' individual needs and demands will have
greater profits. With higher sales as well as a better understanding of customer requirements,
the company can provides more variety and customized products, which further fragments the
market. However companies that shift into this new paradigm are not aware that one of the
important factors that ensures the successful implementation of MC is focus on customers.
The customer is seen as the centre point in MC. In MC strategy, the chosen characteristics of
customization must be based on the customer's demand. Manufacturer should integrate the
customers in the value-added chain in order to produce a solution (throughout this thesis a
solution is referred to product and service) that can perfectly match the customers' unique
needs at lower price and shorter lead-times.
The main problem for a company that adopts this strategy is that it decouples customers from
their value-added chain. If this problem is not looked into, it can lead to a wrong decision of
product planning, and thereby reducing customer satisfaction. Another problem is that, as the
characteristics do not reflect the real customer preferences or optimum solutions, product
development team can get wrong information. Therefore, product development activities are
also not optimum. Product development team may not able to decide which components will
be modularized, standardized and customizable that leads to not optimum solutions for
efficient MC strategy.
In order to provide optimum characteristics of customization and better customer satisfaction,
several sub-problems should be analysed systematically. First, a literature research was made
to better understand of mass customization, postponement and design for mass customization.
Introduction
4
Thereafter, how mass customization can affect product design is analysed and bearing in mind
the important of customer in the value chain. Then, current design and function of mobile
phone, and understanding and determining the customer demands are analysed. Later this
analysis is used to develop a requirement list of customize mobile phone.
Defining customer demands is very crucial. The demand differs amongst customers and that
makes it important to define what customers demand really is. One of the best ways to
identify customer's demands is to get closer to the customer and manufacturers should think
themselves as a customer. In this thesis, characteristics of customized mobile phone as a
product are determined by identifying three different customers: end-user, network service
provider and mobile phone manufacturer. They are referred throughout this thesis when
mentioning mobile phones' customers. A networking service provider is a body of
organisation that provides communications and networking services, while, mobile phone
manufacturer refers to both manufacturers and distributors that sell mobile phone to the
public. In determining end-user requirements, market questionnaire is carried out. While the
information about network service providers and mobile phone manufacturers are collected
through their official website. Main problems and sub-problems are summarised in the
following sub-chapter:
Main problem:
How to determine the characteristics of customized product that peifectly meet customer true
needs and desires?
This is the common question on how to determine the optimum characteristics of
customization and thereby increasingly improve customer satisfaction. To answer the above
question, research about how MC affects product designs has to be conducted on how current
design and function of mobile phone is and what the problem incurred during determining the
customization characteristics. B eing c loser to the customer through customer integration at
the early stages of development process for example is one of the best approaches that can
ensure successful implementation ofMC.
Introduction
5
Sub-problems:
1. How to obtain the real customer's demand and to get customer integration and
information?
2. What types of variants should be offered that can perfectly match customer needs?
3. Which components are standardized, customized and modularized?
1.4 Thesis Objective
Due to dynamic customer demands where they desire product that can perfectly match their
needs, low prices and short lead times, the organisations should adapt MC and postponement
that strive to provide customer satisfaction and being competitive in the market. The objective
of this thesis is to determine which features of mobile phone should be standardized and
customizable based on customer requirements as to gain competitive advantage in MC and
postponement. By identifying customers' unique needs and applying these design
requirements, a modularized mobile phone supporting different form factors (clamshell phone
design, candy-bar phones, etc.) can be developed according to customers' requirements. All
these prospective are discussed systematically in the following chapters.
1.5 Thesis Outlines and Methodology
This thesis is written to give a practical framework to implement the concept of mass
customization of mobile phones as well as design and methods to implement it. Initially the
concepts of mass customization, postponement and modularization are presented followed by
the prerequisites that a manufacturer has to fulfil in order to successfully implement mass
customization. This is followed by analysis of design and components of mobile phone. And
then, market survey about· customer requirements as well as observations in which the
customer demands are identified and then translated to strike a balance between customer
requirements and technological capabilities.
The modular components that can be used for mass customization and postponement are then
identified. Finally several practical designs for implementing mass custornization of mobile
phones are presented so as to verify the practicality of the research.
Introduction
6
In this thesis multiple sources of information is used in order to provide better understanding
of the research problem. In this thesis there are two types of information used, primary data
and secondary data. The primary data is obtained from market survey through questionnaires
and direct observations. The questionnaire is distributed among students in Global Production
Engineering (GPE) and small numbers of workers in different industries in Malaysia. The
questionnaire is distributed through email. In the beginning of the questionnaire, the purpose
of the thesis is mentioned and a brief meaning of mass customization and postponement was
given. On the other hand, the secondary data is obtained through data that has been collected
from other individuals with another purpose of their data collection such as journals,
textbooks, research paper and Internet sources.
State of the Art
2 State of the Art
The purpose of this chapter is to provide an overview of mass customization, postponement
and mass customization products which enable a comprehensive understanding of MC and
postponement concepts and product design related issues and topics. In the topic of mass
customization, an overview of general level of mass customization is described, followed by
customizable and cost of mass customization. While the topic of postponement explains a
strategy to balance mass customization through delaying customization activities as late as
possible until an ordered from customer is confirm. Finally, in the topic of design for mass
customization, a few methods are introduced in a way to design customizable solutions.
2.1 Mass Customisation
Inherently, MC is neither a new oxymoron nor a new paradigm in current dynamic business
strategy. This concept has evolved and caught the attention of many scholars and practitioners
equally to study and understand the technical challenges of MC as well as to put the theory
into practise. Pine [PIN-93] defined MC as "MC shares the goal of developing, producing,
marketing, and delivering the products and services with enough variety and customization
that nearly everyone finds exactly what he wants". MC as the ability of manufacturer to
deliver individually designed products and services to every customer through high process
agility, flexibility and integration [DAV-89]. Meanwhile, Tseng, Ma and Jiao [TMJ-01] have
defined MC as a new paradigm for industries to provide products and services that best serve
their customers' needs while maintaining near MP efficiency.
The word "mass" in MC indicates large scale production of individually customized products
and services [MBB-03]. In spite of this to optimize the processes manufacturers have to limit
the range of variation offered. Customization is something that refers to solutions individually
offered by manufacturers in order to better suit customer needs and requirements. Tseng and
Piller [TSEPIL-03] stated that "at a certain point, MC is supported with personalisation where
they defined personalisation as involving intense communication between two parties such as
between customer and supplier". According to marketing experts, Peppers and Roger [WAL04] personalisation is the One-to-One feature where the product is being sold in different
ways to each different customer. In this one-to-one marketing, typically, the core-product is
well understood by the customer. Then the customer concentrates on designing a solution that
fits his needs in order to personalise the product.
7
State of the Art
Customization differs from personalisation as in customization the customers are offered with
solution variance and then just pick variances that match their needs the best. This shows that
the customer will get products that satisfy his demands at the price they are willing to pay.
Meanwhile in personalisation, the customers still get exactly what they want but with the
willingness to pay premium price. An example of customization is about someone who would
like to get his book binded. At the binding store, he can choose from different colours for
cover and types of binding according to his price range. This is different if he comes to the
binding shop, but wants the title of the book written on it. The shop will ask specifically the
font size, font type, font colour, and may required the customer to wait at a certain period of
time. As result, the shop will charge an extra price that definitely he is willing to pay. This is
called personalisation.
All definitions advocate that MC is a comprehensive theory where customer demands have
great influence and are the main focus throughout the entire process of product development,
production, marketing, and delivery process at reasonably low cost. In fact, in MC, customer
is the most valuable asset to a company because customer will structure the degree of
customisation and furnish customisation. Thus, the first action that should be taken into
account from the manufacturer side is to detect customer requirements. For example, in order
to better understand the customer demands the manufacturer should ask several questions:
what types of variants should be offered that can perfectly match customer needs? How can
customer needs and demands be determined, either face-to-face with the customer ate arly
stages of product development processes, or investigating customer behaviour that may affect
current market situation? Will these variances not end-up with high price? MC not only
requires manufacturer to have a very good relationship with customer but also being able to
translate these requirements into customized solution without losing the benefit of MP efficiency and productivity, low cost, high quality and quick response.
In MC cost could increase due to investments in information technology system, at customer
service centre, in advanced flexible manufacturing system, high skill labour, smaller lot sizes,
high distribution cost, etc. It is argued that - whatever the degree of customization - the
product can only be made or at 1east finished to order [ ABF-99]. It has been discussed in
many MC literatures about the means to compensate for this additional cost, namely proper
design for variety [MOR-01], the function of modular product architecture [JIATSE-96] ,
postponement strategies [FEILEE-97], etc. These topics will be discussed in detail later in this
thesis.
8
9
State of the Art
2.1.1 General Level of Mass Customization
In MC, the task of the designer is not only to defme the customer's requirements, but also to
ensure that these requirements can be fulfilled at low price and short lead-times. Finding the
right attributes to vary with the right point of customization is a must in MC due to the fact
that customers can influence product configurations. Lampel and Mintzberg [LAMMIN-96]
defined five different MC strategies as illustrated in Figure 1 :
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Pin
CustanilJiion
Figure 1: The division of product into group based on the point of customer involvement
(adapted from [LAMMIN-96]).
From Figure 1, the examples of customization regarding its classifications are enlisted below:
•
Pure standardized: soft drinks, toiletries.
•
Segmented standardization: stereo components like DVD player, TV, FM-receiver that
is assembled for a home theatre system.
•
Customized standardization: car production where colour, accessones, etc. are
assembled according to a customer order.
•
Tailored customization: products where the customer can have extra equipment, but is
constrained by the basic design of the product i.e. boat.
•
Pure customization: products where the customer is tied by few constraints i.e. ship
building.
In MC, the manufacturers are required to define the degree of standardization or
customization they should provide and be able to figure out which product should be
State of the Art
standardized or customized. Therefore it is important to define a point where the
customization can be positioned.
2.1.2
Customizable Product Characteristic
From economic point of view, MC implementation requires a thorough study of the degree of
customisation so that the product can be customised efficiently [TH0-03]. There are many
ways in which customers can customize a product according to their needs. Customisation can
be characterized into 10 nomenclatures [MAC-03]:
•
Dimensional fit I size - the product (completely or partly) is modified to better suit
customized requirement I dimension.
•
Hardware function - customized functionality of hardware features is varying, adding
or subtracting.
•
Software function - customized functionality of software (programming) features is
changing, adding or subtracting.
•
Property of the whole product - certain product property is altered for example
corrosion resistant, vibration tolerant and noise emission.
•
Grade - upgrading or downgrading components is made due to certain reason such as
cost, without affecting the function or quality level of the product.
•
Aesthetic and style - changing the geometry, profile or appearance of a product such
as colour of mobile housing.
•
Quality level - how well the components or product comply with some customized
standards for an instance reliable performance.
•
Personalisation - altering by adding special identifiers i.e. customer's name on the
product.
•
Literature and documentation - for an instance modification of product manual.
•
Packaging - for example varying the package appearance or putting other items into
the package.
10
State of the Art
2.1.3
Cost of Mass Customization
In MP, lower costs are achieved through the concept of economic of scale, in which the cost
of single unit is decreased through producing greater amount of output. According to Pine
[PIN-93] the low cost in MP can still be achieved in MC even though MC system produces
greater variety of products and services through increase in speed, capacity, effectiveness, and
efficiency of system, and usability of information and telecommunications technology.
Flexible manufacturing systems enable the manufacturers to produce all members of a family
of parts including the pre-determine variation at random and at any time, without cost
penalties for manufacturing any one part versus another. As a result, a company can quickly
respond to the turbulent demand. Designing and re-designing activities can be quickly done,
as the design specifications are linked to computer-aided designing and computer-aided
manufacturing. Finally, all of this information is integrated into a single automation system
namely, computer integrated manufacturing, a system that is fast, responsive and flexible.
However, Svensson and Jenson [SVEJEN-03] argued the cost for MC can be increased:
•
Through the implementation of flexible production equipment - the equipment is
typically expensive and it is distributed over the products, thereby product becomes
more expensive.
•
Availability of individual logistics - customer and product are linked before
manufacturing activities. For an instance automobiles industry, where customer
creates a pull situation through production by ordering a unique combination of
colour, interior, accessories, etc. As results, reduces incapacity utilization and creates
waiting time. Some automotive manufacturer compensate for this by producing cars
to be sold of the lot, while more exclusive manufacturer will have to accept a lower
capacity utilization or waiting time since their customer expects a unique product.
•
Configuring, designing and selling customized product - in selling customized
product where the customer must be supported in the decision making process
generates more cost than selling standard product which does not demand any
interaction with customer.
11
Institute for Machine Tools and Factory Management
Department of Assembly Technology and Factory Management
Univ.-Prof. Dr.-lng. G. Seliger
Master Thesis
Manufacturing and Factory Planning
Product Design for Mass Customization and Postponement
presented by
Suriati Akmal
Matriculation Number 22764 7
supervised by
Dipl.-lng. Marco Zettl
Berlin , 28 April 2006
Eidesstattliche Erklarung
Icb erkHire hiermit an Eides statt, dass icb die vorliegende Arbeit selbstandig und ohne
unerlaubte Hilfe angefertigt babe, andere als die angegebenen Quellen und Hilfsmittel nicht
benutzt und die den benutzten Quellen wortlich und inhaltlicb entnommenen Stellen als
solche kenntlich gemacht babe.
Berlin, den 28. April 2006
Suriati Akmal
1
Acknowledgement
This Master Thesis represents the essence of achievements during two year of my studies in
Global Production Engineering (GPE) course at Technical University, Berlin. Working with
this thesis has been a very interesting experience. During this period, there have been many
people, who have inspired and guided me through my work in this thesis.
My thesis work has been based on study of mass customization and postponement of mobile
phones. I would like to express appreciation to all people in Global Production Engineering
programme who gave me help in getting valuable information, doing interviews and
answering questions. I would like to express my special thanks to my sponsor Kolej
Universiti Teknikal Kebangsaan Malaysia (KUTKM) and advisor Dipl.-lng. Marco Zettl in
Department of Assembly Technology and Factory Management for the valuable support
during the process of writing the thesis.
Suriati Akmal
11
Abstract
In this era of globalisation there are radical changes taking place that are reshaping the
industrial landscape. The manufacturing industry is facing proliferation of finished products,
rapidly increasing introduction of new products, short product life cycles, and dynamic
market, which becomes truly global.
Customers demand products that are specifically address their needs with low prices, 100
percent on-time delivery, higher quality and a product that they can give added-value when
purchasing the product. The customer demand is no longer predictable and requires large
numbers of product variance. Manufacturers have realised that customer demands are
essential to gain competitive advantage on the global market.
Therefore mass customization and postponement are the strategies that can offer competitive
advantage to overcome this complexity. The customer has been seen as the centre point in
mass customization. This thesis is written to give a practical framework for implement the
concept of mass customization of mobile phones as well as design and methods to implement
it. Initially the concepts of mass customization, postponement and modularization are
presented followed by the prerequisites that a company/manufacturer has to fulfil in order to
successfully implement mass customisation and postponement. This is followed by analysis
of design and components of mobile phone. And then, market survey about customer
requirements in which the customer demands are identified and then translated to strike a
balance between customer requirements and technological capabilities.
The modular components that can be used for mass customization and postponement are then
identified. Finally several practical designs for implementing mass customization of mobile
phones are presented so as to verify the practicality of the research.
111
Zusammenfassung
In der heutigen .Ara der Globalisierung gibt es radikale Veranderungen, die industrielle
Landschaft neu formen. Die verarbeitende Industrie ist konfrontiert mit einer starken
Zunahme von Fertigprodukten, einer schnell anwachsenden Einfiihrung von eben diesen
kurzen Lebenszyklen, und einem dynamischen Markt, der tatsachlich global wird.
Kunden fragen nach Produkten, die ihre spezifischen Bedfirfnisse hinsichtlich eines niedrigen
Preises
ansprechen,
eine
100%-ige
standige
Verfiigbarkeit
haben,
einen
hohen
Qualitatstandard gewahrleisten, und ein Produkt, das ihnen eine Wertschopfung bei
Anschaffung garantiert. Die Kundennachfrage ist nicht ohne weiteres vorhersehbar, deswegen
ist eine grofie Produktvielfalt gefordert. Die Hersteller haben realisiert, dafi das Wissen urn die
Bedfirfnisse der Kunden essentiell sind zur Erreichung von Wettbewerbsvorteile auf dem
globalen Markt.
Dafiir
sind
Mass
Customization
und
Postponement
die
Strategien,
die
die
Wettbewerbsvorteile in Bezug auf die Bewaltigung dieser Komplexitat anbieten. Diese
Masterarbeit ist geschrieben, urn die Liste der Anforderungen an das Produktdesign zu
entwickeln von Mobiltelephone fur Kunden, die im Mittelpunkt der Mass Customization und
Postponement-Strategie stehen. Es ist notig eine optimierte Kundencharakteristik zu
definieren, urn ein mafigeschneidertes Produkt anbieten zu konnen. Die Fragestellung des
Gewerbes ist also die Identifizierung der realen Kundenwiinsche und dann deren Oberfiihrung
in eine LOsung zur Wertschopfung fiber des Angebot zurn Kunden.
Die Wunsche und Bedfirfnisse der Kunden sind identifiziert und umgesetzt in eine Balance
zwischen diesen Anspruchen und technologischen Fertigungsmoglichkeiten. Einer der besten
Wege, urn die Forderungen der Kunden auszurnachen, ist die Annahme deren Perspektiven
durch den Produzenten selbst, urn so eine Nahe zu den Kundenwiinschen zu entwickeln.
Folglich ist eine Untersuchung des Marktes und des Kundenprofiles durchzufiihren, urn ein
gutes Verstandnis der V erbraucherwfinsche zu erreichen.
Die Identifikation der aufiergewohnlichen Kundenwiinsche und deren Verwendung in den
Gestaltungskriterien, erlaubt die Entwicklung benutzerfreundliche, verschiedene Formen
begfinstigende, Mobiltelephone.
IV
Table of Contents
Acknowledgement ............................................................................................................................ i
Abstract ........................................................................................................................................... n
Zusammenfassung .......................................................................................................................... iii
Table of Contents ........................................................................................................................... iv
List of Figures ................................................................................................................................ vi
List of Tables ................................................................................................................................. vii
.
···
. o fAppend Ices
.................................................................................. ..................................... v1n
L1st
List of Abbreviations ...................................................................................................................... ix
1 Introduction ............................................................................................................................... 1
1.1 Background of the Thesis ................................................................................................ 1
1.2 Paradigm Shift ................................................................................................................. 1
1.3 Problem Discussion......................................................................................................... 3
1.4 Thesis Objective .............................................................................................................. 5
1.5 Thesis Outlines and Methodology................................................................................... 5
2
State of the Art .......................................................................................................................... 7
2.1 Mass Customisation ........................................................................................................ 7
2.1.1 General Level ofMass Customization .................................................................... 9
2.1.2 Customizable Product Characteristic .................................................................... 10
2.1.3 Cost ofMass Customization ................................................................................. 11
2.2 Postponement ................................................................................................................ 12
2.3 Design for Mass Customization .................................................................................... 15
2.3.1 Customize Services Surrounded with Standardized Products and Services ......... 15
2.3.2 Customizable Products and Services ..................................................................... 16
2.3.3 Modularize Components to Customize End-Products and Services ..................... 16
3
Features of Organization Implementing Mass Customization ................................................ 20
3.1 Customer Integration ..................................................................................................... 20
3.2 People and Knowledge .................................................................................................. 21
3.3 The Value Chain Integration ......................................................................................... 22
3.4 Information Technology Enabler .................................................................................. 22
3.5 Proactive Management of Product Variations .............................................................. 23
3.6 Adaptation of Production Control ................................................................................. 24
4
Analysis of Design and Component of Mobile Phone ............................................................ 27
v
4.1 Background ofMobile Phones ...................................................................................... 27
4.2 Basic Components of Mobile Phone and their Functions ............................................. 27
4.2.1 Printed Circuit Board ............................... ............................................................. 28
4.2.2 Antenna ................................................................................................................. 29
4.2.3 Display .................................................................................................................. 29
4.2.4 Keypad .................................................................................................................. 30
4.2.5 Battery ................................................................................................................... 30
4.3 Features ofMobile Phones ............................................................................................ 30
4.4 Design of Mobile Phones .............................................................................................. 33
4.4.1 Candy Bar Form Factor ......................................................................................... 33
4.4.2 Clamshell Form Factor .......................................................................................... 34
4.4.3 Slide Form Factor .................................................................................................. 34
5
Identification of Customizable Characteristic ......................................................................... 36
5.1 Market Survey ............................................................................................................... 36
5.1.1 End-User Analysis ................................................................................................. 36
5.1.2 Network Providers Analysis ........................................ ......................................... 38
5.1.3 Mobile Phone Manufacturer Analysis ................................................................... 39
5.2 Translation of Customer Requirements ......................................................................... 40
5.3 Requirements List .................................................................. ....................................... 42
5.4 Customisation ofMobile Phones .................................................................................. 43
6
Development of Customizable Mobile Phones ....................................................................... 48
6.1 Mobile Phone Function Structure ................................................................................. 48
6.2 Working Principle of a Mobile Phone........................................................................... 50
6.2.1 Selecting Suitable Working Principles .................................................................. 50
6.3 Examples of Combination of Principles Solutions ....................................................... 53
6.3.1 Evaluation of Solution........................................................................................... 58
6.3.2 The Benefit of the Solutions .................................................................................. 63
7
Summary and Outlook ............................................................................................................ 64
7.1 The Answer to Main Problem ....................................................................................... 64
7.2 The Limitation of Study .................................... ............................................................ 65
7.3 Further Studies .............................................................................................................. 66
8
References ............................................................................................................................... 67
9
Appendices .............................................................................................................................. 72
VI
List of Figures
Figure 1: The division of product into group based on the point of customer involvement
(adapted from [LAMMIN-96]) ................................................................................... 9
Figure 2: Postponement framework (after Pagh and Copper, 1998) ........................................ 13
Figure 3: Typology of customer order decoupling point (adapted from [TH0-03}) ............... 14
Figure 4 : Basic options for the organizational structure of production (adapted from ............ 25
Figure 5: Manufacturing planning and control depending on lead-time variability (adapted
from [K.AR-89]) ........................................................................................................ 26
Figure 6: An illustration of basic components of mobile phone (after .................................... 28
Figure 7: hnage of Motorola L7 (adapted from Vodafone Catalogue).................................... 33
Figure 8: Example of clamshell design from Motorola (adapted from Vodafone Catalogue) 34
Figure 9: Samsung SGH D500, the stunning slide of its form factor (adapted from
http://www.mobile-review.com) ............................................................................... 35
Figure 10: Graph of features that customers desire for future mobile phones......................... 37
Figure 11 : Example of questionnaire analysis: Decision factors for purchasing a mobile phone
for customers............................................................................................................. 38
Figure 12: Black box model of a mobile phone. ...................................................................... 48
Figure 13: Function structure of mobile phone........................................................................ 49
Figure 14: Schematic diagram of modular mobile phone........................................................ 54
Figure 15: Schematic diagram for candy bar design with customizable solutions.................. 55
Figure 16: Schematic diagram for clamshell design with customizable solutions .................. 56
Figure 17: Schematic diagram for slip design with customizable solutions .......................... .. 57
Figure 18: Graph of factor that influence customer purchasing............................................... 74
Figure 19: Graph of features that customer like most about their current mobile phones....... 74
Figure 20: Graph of features that customer like least about their current mobile phones....... 75
VII
List of Tables
Table 1: Features of mobile phones according to functions ......... ..... ....................................... 32
Table 2: Nokia product platform.............................................................................................. 40
Table 3: QFD for mobile phone. .............................................................................................. 42
Table 4: The customisable product characteristics of mobile phone (after [MBB-03]) ......... . 43
Table 5: Possibilities solutions of customizable mobile phones. ............................................. 46
Table 6: The morphological matrix of mobile phone.............................................................. 52
Table 7: Questions for evaluating the solution based on customer requirements .................... 58
Table 8: Proposed solutions of standardize features and components of mobile phones for
mass customization and postponement strategy........................................................... 60
Table 9: Proposed solutions of customizable features and components of mobile phones for
mass customization and postponement strategy........................................................... 62
List of Appendices
Vlll
List of Appendices
Appendix A: Market questionnaire .......................................................................................... 72
Appendix B: Graph of survey results ....................................................................................... 74
Appendix C: Requirements list for mobile phone .................................................................... 76
List of Abbreviations
List of Abbreviations
ADC
Analogue-to-Digital Converter
ALU
Arithmetic Logic Unit
BOM
Bill of Material
CAD
Computer Aided Design
CAE
Computer Aided Engineering
CAM
Computer Aided Manufacturing
CCD
Charge-Coupled Device
CIM
Computer futegrated Manufacturing
CMOS
Complementary Metal Oxide Semiconductor
CODP
Customer Order Decoupling Point
CONWIP
Constant Work fu Process
CPU
Central Processing Unit
CRM
Customer Relationship Management
CRT
Cathode Ray Tube
DAC
Digital-to-Analogue Converter
EDGE
Enhanced Dta Rates for GSM Evolution
EEPROM
Electrically Erasable Programmable Read Only Memory
EMS
Enhanced Messaging Service
ERP
Enterprise Resource Planning
FEA
Finite Element Analysis
GPE
Global Production Engineering
GPRS
General Packet Radio Sevice
GPS
Global Positioning System
IMAP4
Internet Message Access Protocol
lrDA
Infrared Data Association
IX
List of Abbreviations
IT
Information Technology
KUTKM
Kolej Universiti Teknikal Kebangsaan Malaysia
Li-Ion
Lithium Ion
Li-Po
Lithium Polymer
MC
Mass Customization
MMS
Multimedia Messaging Service
MP
Mass Production
MRP
Material Resource Planning
NiCD
Nickel Cadmium
NiMH
Nickel Metal Hydride
OLED
Organic Light-Emitting Diode
OS
Operating System
PCB
Printed Circuit Board
PDA
Personal Digital Assistance
POP3
Post Office Protocol version 3
QFD
Quality Function Deployment
RAM
Random Access Memory
RF
Radio Frequency
RNIB
Royal Institute of the Blind
ROM
Read Only Memory
SAP
System, Applications and Products in Data Processing
SIM
Subscriber Identification Module
SMS
Short Messaging Service
SMTP
Simple Mail Transfer Protocol
UK
United Kingdom
VGA
Video Graphic Array
WAP
Wireless Access Protocol
X
List of Abbreviations
WMA
Windows Media Audio
xHTML
Extensible HyperText Markup Language
Xl
Introduction
1
1 Introduction
In the first chapter, an overview of the thesis is provided for the reader to become acquainted
with the subject. The thesis's background and a short discussion about the problem are
followed by a presentation of the thesis's purpose, outlines and methodology.
1.1 Background of the Thesis
In this era of globalisation there are radical changes taking place that are reshaping the
industrial landscape. Manufacturing industries are facing proliferation of finished products,
shortening product life cycles, continual improvement of products and process innovations,
computer-integrated manufacturing, quick response to markets, and fragmented markets.
Additionally, customers demand products that are available at any time, in the right quantity
and quality and specifically addressing their needs with lower prices. Moreover customers'
unique needs are no longer predictable but dynamic. Mass production (MP) in which
standardized products, homogenous markets, long product life cycle and long development
cycle were the rules is no longer feasible for many industries where customer requires highly
customized and design-to-order products and where additional services and value-added
benefits like product upgrades and future reconfigurations are important. The swift trends
towards a great number and variety of finished products have lead many companies into
problem with inventories, overhead costs and process efficiencies. For that reason,
manufacturers are struggling to adopt a new paradigm to remain competitive in the market.
1.2 Paradigm Shift
In the early twentieth century, America was an economic power that dominated the world's
production through a system called MP. The system was popularised by Henry Ford where
standardized products were p reduced for homogeneous markets and, 1ong product 1ife and
development cycles were the rule. In the MP paradigm, standard products are exactly
produced through forecasted demand. MP in practise, shares the common goal of developing,
producing, marketing, and delivering products and services at lower prices that a mass of
customers can afford them [PIN-93]. fu this paradigm, to remain competitive, manufacturers
must make a lot of profit by selling a large amount of products in homogeneous markets. Also
in the paradigm manufacturers produce a product or very similar products which are similar
Introduction
2
through entire assembly line where all machine set ups and procedures are standardized. This
requires stability and efficiency of production process, that everything run smoothly, with no
delays, no interruptions, and no changes. M P paradigm greatly depends on stable, steadily
growing demand to keep its wheels turning.
The advent of new technology and the idea of globalisation have reshaped homogeneous
markets. This radical shift, has affected the societies as well. They are much less
homogeneous with regards to gender, lifestyles, demographic, race and so on. The income
distribution is different than it was a century a go, creating a great difference in disposable
income with corresponding disparities in needs and desires. The MP's homogeneous market is
threatened by the changing needs and demands of customers. Consequently, the markets have
become increasingly heterogeneous. The market has changed into fragmented markets where
customers demand for different characteristics of similar products.
These turbulent and global markets, demand for new products that have to be diverted from
older ones and shifting power to customers who demand more variety and customized
products, and want to be treated personally. It is therefore important for new products to meet
customer needs more specifically, to be higher quality and simply to be different from what is
already in the market. In the case of Ford for an instance, at the pinnacle of its age, with the
theme of "any-colour-as-long-as-it's-black" Model T Ford had a 57% market share. However
with several options i.e. colour variations by General Motor, Ford was pulled off its pedestal.
This was due to production's key to success, hard tooling, division of labour, and economies
of scale by standard products, prevented it from offering variety or adapting quickly to
emerging trends [WDDD-90]. Thus, in order to quickly response to heterogeneous markets
where variety and customization of products replaced standardized products, the shortening of
product life cycle and development cycles a new paradigm is needed.
Through the applications of new technology and new management methods, most of
industries practitioners and researches have found a new paradigm that promoting variety and
customization through flexibility and quick responsiveness. This is called mass customization
(MC). MC strives to provide customer satisfaction with increasing product variety and
customization without a corresponding increase in cost and lead-time. While practitioners in
MP share common goal of developing, producing, marketing, delivering products and
services at lower prices that mass of customers can afford them, practitioners of MC share the
goal of developing, producing, marketing, and delivering the products and services with
enough variety and customization that nearly everyone finds exactly what he wants [PIN-93].
Introduction
3
One of the examples of implementing MC is the automobile industry. Automobile industry
has been successfully selling customized cars for years. But since cars are high value
products, therefore higher costs and high lead-time are acceptable by consumers, which are
not the case in other industries. Reducing product costs and lead-times are great challenges
not only for automobile manufacturers but also in many other branches. Postponement
concept, that is the shift of the complete product assembly towards the consumer, is an
opportunity to curb these challenges. In an ideal case, personal in contact with the customer or
even the consumer himself is customizing the product. One product-sided condition for
efficient MC and postponement is a well-developed modular product structure.
1.3 Problem Discussion
In MC, a company that better satisfies its customers' individual needs and demands will have
greater profits. With higher sales as well as a better understanding of customer requirements,
the company can provides more variety and customized products, which further fragments the
market. However companies that shift into this new paradigm are not aware that one of the
important factors that ensures the successful implementation of MC is focus on customers.
The customer is seen as the centre point in MC. In MC strategy, the chosen characteristics of
customization must be based on the customer's demand. Manufacturer should integrate the
customers in the value-added chain in order to produce a solution (throughout this thesis a
solution is referred to product and service) that can perfectly match the customers' unique
needs at lower price and shorter lead-times.
The main problem for a company that adopts this strategy is that it decouples customers from
their value-added chain. If this problem is not looked into, it can lead to a wrong decision of
product planning, and thereby reducing customer satisfaction. Another problem is that, as the
characteristics do not reflect the real customer preferences or optimum solutions, product
development team can get wrong information. Therefore, product development activities are
also not optimum. Product development team may not able to decide which components will
be modularized, standardized and customizable that leads to not optimum solutions for
efficient MC strategy.
In order to provide optimum characteristics of customization and better customer satisfaction,
several sub-problems should be analysed systematically. First, a literature research was made
to better understand of mass customization, postponement and design for mass customization.
Introduction
4
Thereafter, how mass customization can affect product design is analysed and bearing in mind
the important of customer in the value chain. Then, current design and function of mobile
phone, and understanding and determining the customer demands are analysed. Later this
analysis is used to develop a requirement list of customize mobile phone.
Defining customer demands is very crucial. The demand differs amongst customers and that
makes it important to define what customers demand really is. One of the best ways to
identify customer's demands is to get closer to the customer and manufacturers should think
themselves as a customer. In this thesis, characteristics of customized mobile phone as a
product are determined by identifying three different customers: end-user, network service
provider and mobile phone manufacturer. They are referred throughout this thesis when
mentioning mobile phones' customers. A networking service provider is a body of
organisation that provides communications and networking services, while, mobile phone
manufacturer refers to both manufacturers and distributors that sell mobile phone to the
public. In determining end-user requirements, market questionnaire is carried out. While the
information about network service providers and mobile phone manufacturers are collected
through their official website. Main problems and sub-problems are summarised in the
following sub-chapter:
Main problem:
How to determine the characteristics of customized product that peifectly meet customer true
needs and desires?
This is the common question on how to determine the optimum characteristics of
customization and thereby increasingly improve customer satisfaction. To answer the above
question, research about how MC affects product designs has to be conducted on how current
design and function of mobile phone is and what the problem incurred during determining the
customization characteristics. B eing c loser to the customer through customer integration at
the early stages of development process for example is one of the best approaches that can
ensure successful implementation ofMC.
Introduction
5
Sub-problems:
1. How to obtain the real customer's demand and to get customer integration and
information?
2. What types of variants should be offered that can perfectly match customer needs?
3. Which components are standardized, customized and modularized?
1.4 Thesis Objective
Due to dynamic customer demands where they desire product that can perfectly match their
needs, low prices and short lead times, the organisations should adapt MC and postponement
that strive to provide customer satisfaction and being competitive in the market. The objective
of this thesis is to determine which features of mobile phone should be standardized and
customizable based on customer requirements as to gain competitive advantage in MC and
postponement. By identifying customers' unique needs and applying these design
requirements, a modularized mobile phone supporting different form factors (clamshell phone
design, candy-bar phones, etc.) can be developed according to customers' requirements. All
these prospective are discussed systematically in the following chapters.
1.5 Thesis Outlines and Methodology
This thesis is written to give a practical framework to implement the concept of mass
customization of mobile phones as well as design and methods to implement it. Initially the
concepts of mass customization, postponement and modularization are presented followed by
the prerequisites that a manufacturer has to fulfil in order to successfully implement mass
customization. This is followed by analysis of design and components of mobile phone. And
then, market survey about· customer requirements as well as observations in which the
customer demands are identified and then translated to strike a balance between customer
requirements and technological capabilities.
The modular components that can be used for mass customization and postponement are then
identified. Finally several practical designs for implementing mass custornization of mobile
phones are presented so as to verify the practicality of the research.
Introduction
6
In this thesis multiple sources of information is used in order to provide better understanding
of the research problem. In this thesis there are two types of information used, primary data
and secondary data. The primary data is obtained from market survey through questionnaires
and direct observations. The questionnaire is distributed among students in Global Production
Engineering (GPE) and small numbers of workers in different industries in Malaysia. The
questionnaire is distributed through email. In the beginning of the questionnaire, the purpose
of the thesis is mentioned and a brief meaning of mass customization and postponement was
given. On the other hand, the secondary data is obtained through data that has been collected
from other individuals with another purpose of their data collection such as journals,
textbooks, research paper and Internet sources.
State of the Art
2 State of the Art
The purpose of this chapter is to provide an overview of mass customization, postponement
and mass customization products which enable a comprehensive understanding of MC and
postponement concepts and product design related issues and topics. In the topic of mass
customization, an overview of general level of mass customization is described, followed by
customizable and cost of mass customization. While the topic of postponement explains a
strategy to balance mass customization through delaying customization activities as late as
possible until an ordered from customer is confirm. Finally, in the topic of design for mass
customization, a few methods are introduced in a way to design customizable solutions.
2.1 Mass Customisation
Inherently, MC is neither a new oxymoron nor a new paradigm in current dynamic business
strategy. This concept has evolved and caught the attention of many scholars and practitioners
equally to study and understand the technical challenges of MC as well as to put the theory
into practise. Pine [PIN-93] defined MC as "MC shares the goal of developing, producing,
marketing, and delivering the products and services with enough variety and customization
that nearly everyone finds exactly what he wants". MC as the ability of manufacturer to
deliver individually designed products and services to every customer through high process
agility, flexibility and integration [DAV-89]. Meanwhile, Tseng, Ma and Jiao [TMJ-01] have
defined MC as a new paradigm for industries to provide products and services that best serve
their customers' needs while maintaining near MP efficiency.
The word "mass" in MC indicates large scale production of individually customized products
and services [MBB-03]. In spite of this to optimize the processes manufacturers have to limit
the range of variation offered. Customization is something that refers to solutions individually
offered by manufacturers in order to better suit customer needs and requirements. Tseng and
Piller [TSEPIL-03] stated that "at a certain point, MC is supported with personalisation where
they defined personalisation as involving intense communication between two parties such as
between customer and supplier". According to marketing experts, Peppers and Roger [WAL04] personalisation is the One-to-One feature where the product is being sold in different
ways to each different customer. In this one-to-one marketing, typically, the core-product is
well understood by the customer. Then the customer concentrates on designing a solution that
fits his needs in order to personalise the product.
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Customization differs from personalisation as in customization the customers are offered with
solution variance and then just pick variances that match their needs the best. This shows that
the customer will get products that satisfy his demands at the price they are willing to pay.
Meanwhile in personalisation, the customers still get exactly what they want but with the
willingness to pay premium price. An example of customization is about someone who would
like to get his book binded. At the binding store, he can choose from different colours for
cover and types of binding according to his price range. This is different if he comes to the
binding shop, but wants the title of the book written on it. The shop will ask specifically the
font size, font type, font colour, and may required the customer to wait at a certain period of
time. As result, the shop will charge an extra price that definitely he is willing to pay. This is
called personalisation.
All definitions advocate that MC is a comprehensive theory where customer demands have
great influence and are the main focus throughout the entire process of product development,
production, marketing, and delivery process at reasonably low cost. In fact, in MC, customer
is the most valuable asset to a company because customer will structure the degree of
customisation and furnish customisation. Thus, the first action that should be taken into
account from the manufacturer side is to detect customer requirements. For example, in order
to better understand the customer demands the manufacturer should ask several questions:
what types of variants should be offered that can perfectly match customer needs? How can
customer needs and demands be determined, either face-to-face with the customer ate arly
stages of product development processes, or investigating customer behaviour that may affect
current market situation? Will these variances not end-up with high price? MC not only
requires manufacturer to have a very good relationship with customer but also being able to
translate these requirements into customized solution without losing the benefit of MP efficiency and productivity, low cost, high quality and quick response.
In MC cost could increase due to investments in information technology system, at customer
service centre, in advanced flexible manufacturing system, high skill labour, smaller lot sizes,
high distribution cost, etc. It is argued that - whatever the degree of customization - the
product can only be made or at 1east finished to order [ ABF-99]. It has been discussed in
many MC literatures about the means to compensate for this additional cost, namely proper
design for variety [MOR-01], the function of modular product architecture [JIATSE-96] ,
postponement strategies [FEILEE-97], etc. These topics will be discussed in detail later in this
thesis.
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2.1.1 General Level of Mass Customization
In MC, the task of the designer is not only to defme the customer's requirements, but also to
ensure that these requirements can be fulfilled at low price and short lead-times. Finding the
right attributes to vary with the right point of customization is a must in MC due to the fact
that customers can influence product configurations. Lampel and Mintzberg [LAMMIN-96]
defined five different MC strategies as illustrated in Figure 1 :
Pin
StlnclriziDon
ｾ＠
Sblldlrdizliion
Custtmzed
SlalidlrliDiion
Tlilcnd
CustanilJiion
Pin
CustanilJiion
Figure 1: The division of product into group based on the point of customer involvement
(adapted from [LAMMIN-96]).
From Figure 1, the examples of customization regarding its classifications are enlisted below:
•
Pure standardized: soft drinks, toiletries.
•
Segmented standardization: stereo components like DVD player, TV, FM-receiver that
is assembled for a home theatre system.
•
Customized standardization: car production where colour, accessones, etc. are
assembled according to a customer order.
•
Tailored customization: products where the customer can have extra equipment, but is
constrained by the basic design of the product i.e. boat.
•
Pure customization: products where the customer is tied by few constraints i.e. ship
building.
In MC, the manufacturers are required to define the degree of standardization or
customization they should provide and be able to figure out which product should be
State of the Art
standardized or customized. Therefore it is important to define a point where the
customization can be positioned.
2.1.2
Customizable Product Characteristic
From economic point of view, MC implementation requires a thorough study of the degree of
customisation so that the product can be customised efficiently [TH0-03]. There are many
ways in which customers can customize a product according to their needs. Customisation can
be characterized into 10 nomenclatures [MAC-03]:
•
Dimensional fit I size - the product (completely or partly) is modified to better suit
customized requirement I dimension.
•
Hardware function - customized functionality of hardware features is varying, adding
or subtracting.
•
Software function - customized functionality of software (programming) features is
changing, adding or subtracting.
•
Property of the whole product - certain product property is altered for example
corrosion resistant, vibration tolerant and noise emission.
•
Grade - upgrading or downgrading components is made due to certain reason such as
cost, without affecting the function or quality level of the product.
•
Aesthetic and style - changing the geometry, profile or appearance of a product such
as colour of mobile housing.
•
Quality level - how well the components or product comply with some customized
standards for an instance reliable performance.
•
Personalisation - altering by adding special identifiers i.e. customer's name on the
product.
•
Literature and documentation - for an instance modification of product manual.
•
Packaging - for example varying the package appearance or putting other items into
the package.
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2.1.3
Cost of Mass Customization
In MP, lower costs are achieved through the concept of economic of scale, in which the cost
of single unit is decreased through producing greater amount of output. According to Pine
[PIN-93] the low cost in MP can still be achieved in MC even though MC system produces
greater variety of products and services through increase in speed, capacity, effectiveness, and
efficiency of system, and usability of information and telecommunications technology.
Flexible manufacturing systems enable the manufacturers to produce all members of a family
of parts including the pre-determine variation at random and at any time, without cost
penalties for manufacturing any one part versus another. As a result, a company can quickly
respond to the turbulent demand. Designing and re-designing activities can be quickly done,
as the design specifications are linked to computer-aided designing and computer-aided
manufacturing. Finally, all of this information is integrated into a single automation system
namely, computer integrated manufacturing, a system that is fast, responsive and flexible.
However, Svensson and Jenson [SVEJEN-03] argued the cost for MC can be increased:
•
Through the implementation of flexible production equipment - the equipment is
typically expensive and it is distributed over the products, thereby product becomes
more expensive.
•
Availability of individual logistics - customer and product are linked before
manufacturing activities. For an instance automobiles industry, where customer
creates a pull situation through production by ordering a unique combination of
colour, interior, accessories, etc. As results, reduces incapacity utilization and creates
waiting time. Some automotive manufacturer compensate for this by producing cars
to be sold of the lot, while more exclusive manufacturer will have to accept a lower
capacity utilization or waiting time since their customer expects a unique product.
•
Configuring, designing and selling customized product - in selling customized
product where the customer must be supported in the decision making process
generates more cost than selling standard product which does not demand any
interaction with customer.
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