Development chain and mass customization
- 1. Introduction to PSCM Seminar Presentation on Development Chain and Mass Customization By Kemal Abdela: Feb, 2021
- 2. Development Chain Is the set of activities and processes associated with new product introduction. A chain which focuses on new product introduction. Integrating development chain into SC is a must in SCM. because supply chain strategies cannot be determined in isolation.
- 3. Development Chain… It includes: Product design phase: product architecture, make/buy decisions, and earlier supplier involvement Associated capacities and knowledge that need to be developed internally: Sourcing decisions: supplier selection, supply contracts, and strategic partnerships Production plans:
- 4. The development and supply chains interact at the production point.
- 5. Why need Alignment of SC and Development Chain Because customers demand product variety, lower cost, better quality, and need faster response. To stay competitive, manufacturing firms must continuously update their product offers. To adapt the supply chain to deliver the new products effectively and efficiently.
- 6. Alignment is reached when supply chain performance is maximized .
- 7. Key Characteristics of Development Chain • Technology speed – Speed by which technology changes in a particular industry. • Make/Buy decisions – Decisions on what to make internally and what to buy from outside suppliers. • Product structure – Level of modularity or integrality in a product
- 8. SCM and New Product Development (NPD) Process • The NPD is one of business process of SCM. • SCM and NPD are related to each other since the supply chain produces and distributes the product, • NPD involves technical and management aspects, in which an organization transforms market and technical possibility opportunities into information for the production of a commercial product. • SC should be flexible enough.
- 9. Product architecture is the scheme by which the function of the product is allocated to physical components. Product architecture decisions influence: decisions related to outsourcing, supplier selection, location of supplier base, production, and warehousing operations. many actions taken by different supply chain functions.
- 10. Supportability Designing the products in a way that they will not cause serious breakdowns in the SC system throughout the product life cycle. Product supportability needs to consider during the product design and development.
- 11. Packaging During packaging design, material handling, transportation and communication among different parties should be considered. These minimizing damages
- 12. Transportability ability to transport the product with in the supply chain, inside a facility and between them. The transportability is strongly connected to product design, packaging, and supportability. During product development needs to consider physical properties of the product Capacity of SC system to store and transport environmental limitations
- 13. Strategic Alliances: Suppliers participation • Currently, most businesses depend on strategic relations with their customers and suppliers to create value to develop product and to obtain better market- share. Designing products to match the processes and supply chains, processes to match product platforms and supply chains, and supply chains to match the product platforms and process are the ingredients in today’s fast developing markets.
- 14. Benefits of early supplier's involvement in development chain • to gain supplier’s technical capabilities and expertise • to complement internal capabilities- reduce time to market, costs, quality problems and • improved the overall design effort. • shared burden of development • better understanding of market trends and customer needs, • better ability to generate new innovative ideas
- 15. Drawback of suppliers’ involvement Suppliers can introduce new problems: risk of losing proprietary knowledge, hollowing out internal competencies, eased accessibility for competitors to copy or acquire key technologies,
- 16. Supply Contract • Supply Contracts is a legal binding that address issues that arise between a buyer and a supplier. • Are very powerful tools that can be used for far more than to ensure adequate supply of, and demand for, goods.
- 17. New product development variables: • Generally, the alignment framework includes three NPD variables: modularity, product variety and innovativeness. 1. Modularity Modularity is a system characteristic. Modular systems consist of loosely coupled modules that can be mixed and matched by the use of standardized interfaces.
- 18. 2. Product variety product variety has been defined from different perspectives. Based it's nature of product: two dimension Range of product at a given time and rate at which the firm replaces the existing products. There is also external and internal variety. external variety denotes the level of choice to the customers, internal variety is experienced inside manufacturing and internal supply chain operations.
- 19. 3. Innovativeness The degree of newness of an innovation from the viewpoint of an entire industry or a firm. We can also consider innovativeness from the customer’s and firm’s viewpoints.
- 20. Supply chain variables: SC model has three main dimensions: Configuration-the modeling of the existing business relationships between the network entities. Collaboration- describes the degree and kind of partnership between the participants; level of mutual trust and openness between the actors and whether the network strategies are aligned or not. Coordination-describes the daily operations of transcorporate processes and methods in the logistic network.
- 22. Introduction • Mass customization relates to the ability to provide customized products or services through flexible processes in high volumes and at reasonably low costs. The concept has emerged in the late 80's and may be viewed as a natural follow up to processes that have become increasingly flexible and optimized regarding quality and costs.
- 23. • Also, mass customization appears as an alternative to differentiate companies in a highly competitive and segmented market. • It deals with making changes to a product or service to satisfy a given consumer group. The changes could be as small as a variety of different flavors or colors or as complex as developing a completely new product for a particular client-base.
- 24. APPROACHES TO MASS CUSTOMIZATION
- 25. Collaborative customization • Collaborative customizers talk to the clients to help them recognize what they need, to recognize factors that will fulfill those needs and to create customized products following those guidelines. • Collaborative customizers change the product itself in addition to changing some aspect of the representation.
- 26. Adaptive approach • Businesses that follow the approach of adaptive customization offer one standard product to the customers along with a few customization options. This approach makes sure that the product is designed in a manner that it can be customized by the end client with absolute ease.
- 27. • This approach is ideal for a client-base that has different expectations from the product in different situations and occasions. With the availability of technology, clients can easily customize the products on their own.
- 28. • adaptive customizers change neither the product nor the representation of the product for individual customers; instead, they provide the customer with the ability to change both the product’s functionality and its representation to meet his or her particular needs.
- 29. cosmetic approach • Cosmetic customizers advertize a standard product differently to different groups of clients. This approach works well when clients use the same product but want them to be presented differently. Such products are not customized but instead they are packaged differently to suit different kinds of customers.
- 30. • A cosmetic customizer changes only the representation of the product
- 31. Transparent approach • Transparent Customization deals with providing customized products to individual clients without telling them that the products are exclusively produced for them. • Businesses that deal in a transparent customization examine client’s behavior without direct communication with them and then discreetly customize their products for them.
- 32. Challenging the Mass-Market Mind-Set • Instead of focusing on homogeneous markets and average offerings, mass customizers have identified the dimensions along which their customers differ in their needs. These points of common uniqueness reveal where every customer is not the same.
- 33. • And it is at these points that traditional offerings, designed for average requirements, create customer sacrifice gaps: the difference between a company’s offering and what each customer truly desires.
- 34. • Adept mass customizers have identified the dimensions along which their customers differ in their needs. • To be effective, mass customizers must let the nature of these sacrifice gaps drive their individual approaches to customization.
- 35. Combining Multiple Approaches • Each of the four customization approaches used alone challenges the mass production paradigm of offering standard goods or services to all customers. Many companies, however, combine two or more approaches in order to meet individual customers’ specific needs.
- 36. MASS CUSTOMIZATION CHALLENGES • Challenges with higher cost • Successful for luxury and not successful for basic products • Challenges with return of customized product • Challenges with supply chains: The biggest obstacle to mass customization is the fact that most businesses’ supply chains cannot efficiently handle it.
- 37. • The systems of suppliers are mostly optimized and designed for producing prearranged amount of products rather than catering to any unforeseen demand
- 38. Conclusions • MC has become an important choice of manufacturing strategy. Agility and quick responsiveness to changes have become mandatory to most companies in view of current levels of market globalization, rapid technological innovations, and intense competition.
- 39. References 1. Omera Khan , Terje Stolte , Alessandro Creazza & Zaza Nadja Lee Hansen | (2016) Integrating product design into the supply chain, Cogent Engineering, 3:1, 1210478, DOI: 10.1080/23311916.2016.1210478. 2. N. Abdelkafi, T. Blecker, and M. Pero. Aligning New Product Development and Supply Chains: Development of a Theoretical Framework and Analysis of Case Studies. G. Huang et al. (Eds.): DET2009 Proceedings, AISC 66, pp. 1399–1419 3. M.A. Vonderembse et al. Designing supply chains: Towards theory development / Int. J. Production Economics 100 (2006) 223–238. 4. Crippa et al. The impact of new product introduction on supply chain ability to match supply and demand International Journal of Engineering, Science and Technology, Vol. 2, No. 9, 2010, pp. 83-93. 5. Margherita Pero, Nizar Abdelkafi, Andrea Sianesi, and Thorsten Blecker . A framework for the alignment of new product development and supply chains: An International Journal Volume 15 · Number 2 · 2010 · 115–128. 6. A. C. Santos, R. E. Kieckbusch and F. A. Forcellini. Product Development Process Managing in Supply Chain, January 2007. 7. Zehra E., Akgün Y., Hilletofth P., Johansson G.,Supply chain related decisions in product development projects: Insights from the industry.
- 40. THANK YOU