Lecture 5

Question 1

What is modularity, and how does it impact supply chain configuration?

Answer 1

Modularity involves designing and producing products using interchangeable modules that can be independently developed and assembled into different configurations. Its impacts include:
1. Enhancing integration by involving suppliers in supply, assembly, and distribution.
2. Supporting postponement strategies for customization.
3. Enabling supplier collaboration, such as ‘zero-level suppliers’ taking responsibility for modules and logistics.
4. Reducing costs through economies of scale while offering variety.

Question 2

What are the three levels of modular production?

Answer 2

1. Product level.
2. Product group level.
3. Process level.

Question 3

What is the postponement strategy in supply chain management?

Answer 3

A strategy where final assembly or customization is delayed until customer orders are received. This minimizes inventory and improves responsiveness to changing demands.

Question 4

What is mass customization, and why is it considered an oxymoron?

Answer 4

Mass customization combines the efficiency of mass production with the flexibility of customization. It’s considered an oxymoron because mass production implies uniformity, while customization suggests individualized products.

Question 5

What are the three components of a mass customization strategy?

Answer 5

1. Elicitation: Enabling customers to meet product catalog options for customization.
2. Process Flexibility: Using modular designs and postponement for flexible manufacturing.
3. Logistics: Efficient shipping of differentiated products with integrated information systems.

Question 6

What are the challenges of mass customization?

Answer 6

1. Requires advanced logistics and supply chain coordination.
2. Higher costs compared to mass production, offset by increased customer satisfaction.
3. Dependence on robust integration of supply chain actors.

Question 7

How does mass customization differ from mass production?

Answer 7

Mass Customization:
* Objective: Customer satisfaction, individualized value
* Demand: Unstable, personalized
* Product variety: High, customer-specific
* Production process: Flexible, small batches
* Lead time: Variable
* Pricing: Higher due to added value

Mass Production:
* Objective: Economies of scale, cost minimization
* Demand: Stable, predictable
* Product variety: Limited, standardized
* Production process: Continuous flow, long runs
* Lead time: Short for standardized products
* Pricing: Low due to uniformity

Question 8

What were the findings of Berman’s (2002) article on mass customization?

Answer 8

Benefits:
* Aligns products with customer preferences, reducing ‘sacrifice gaps.
* Enhances efficiency through lower inventory and reduced markdowns.
* Enables trend analysis via continuous dialogue with customers.

Challenges:
* High costs for flexible systems and logistics.
* Requires strong supply chain integration.

Conclusion: Mass customization is feasible for industries with fragmented demand and shorter product life cycles enabled by modular designs and postponement strategies.

Question 9

What did van Hoek and Weken (1998) conclude about modular production?

Answer 9

Modular production reshapes supply chains by:
- Facilitating integration of supply, assembly, and distribution networks.
- Supporting mass customization through postponement.
- Requiring collaboration across supply chain actors.

Question 10

What are the four types of mass customization identified by Gilmore and Pine (1997)?

Answer 10

1. Collaborative: Dialogue with customers to define needs.
2. Adaptive: Standard products customers can modify.
3. Cosmetic: Standard products presented differently.
4. Transparent: Customization based on observed needs without customer awareness.