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Identifying potential contributions of lean production to
business model evolution towards mass customization in the wood furniture industry
Matheus Pinotti Moreira – Ph.D. CandidateSophie D’Amours – Research DirectorRobert Beauregard – Research Co-directorRiadh Azouzi – Research Co-director
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MCPC 2007Boston, USA, October 07-09, 2007
The Furniture Industry In Quebec
• Important manufacturing sector;
• Current situation is very difficult;
• Furniture manufacturers believe that mass
customization is a promising alternative to regain
competitiveness.
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MCPC 2007Boston, USA, October 07-09, 2007
Retailing Distribution Packaging Finishing Componentmanuf.
Assembling Supply
Sale-2O
Ship-2O
Pack-2O
Finish-2O
Assembly-2O
Make-2O
Supply-2O
Popularizing
Engineering Design
Engineer-2O
Design-2O
Configuring MonitoringAdjustingServicingTailoringAccessorizingVarietizing
The challenge of mass customization for the wood furniture sector in Quebec (Lihra et al., 2005; Poulin et al., 2006)
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MCPC 2007Boston, USA, October 07-09, 2007
Why Toyota as a reference?
• Similar radical complex change
Jan. 2005J.D. Power Customer Satisfaction Alemagne 2005
OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com
20001940 1950 1980 19901960 1970
Popularizing Varietizing + Accessorizing + Configuring
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MCPC 2007Boston, USA, October 07-09, 2007
Research questions
1. What are the common competencies of lean production and mass customization?
2. What are the specific competencies needed for mass customization in the wood furniture industry?
3. What are the opportunities and barriers for the development of these competencies using lean production as a reference?
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MCPC 2007Boston, USA, October 07-09, 2007
Competencies for mass customization01. Employment of product modularity
02. Integration of client information
03. Application of product configuration systems
04. Information and communication management aligned with IT systems
05. Management of product variety costs
06. Flexible production scheduling
07. Sales & Marketing integration with other functions
08. Efficient supply chain management
09. Efficient development of new products
10. Efficient fabrication and assembly
11. Coordination with retailing network
12. Flexible logistics and handling of final products
13. Utilization of a structured problem solving methodology
14. Continuous learning and retention of employees
Moser (2005)
Anderson (2004)
Muda & Hendry (2002)
Da Silveira et al. (2001)
Alford et al. (2000)
Feitzinger & Lee (1997)
Kotha (1996)
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MCPC 2007Boston, USA, October 07-09, 2007
Lean production & Mass customization01. Employment of product modularity
02. Integration of client information
03. Application of product configuration systems
04. Information and communication management aligned with IT systems
05. Management of product variety costs
06. Flexible production scheduling
07. Sales & Marketing integration with other functions
08. Efficient supply chain management
09. Efficient development of new products
10. Efficient fabrication and assembly
11. Coordination with retailing network
12. Flexible logistics and handling of final products
13. Utilization of a structured problem solving methodology
14. Continuous learning and retention of employees
Correspondent on lean productionLiker (2004)
Shimizu (1999) Fujimoto (1999)
Shimokawa (1987)...
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MCPC 2007Boston, USA, October 07-09, 2007
Selection of participants
1) What is the competitive advantage of
the competencies?
2) What is their development level in the
industry?
Researchers
Participants
Answers and commentsFinal report
Analysis & synthesis
Analysis & synthesis
1st round 2nd round
Delphi Technique
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MCPC 2007Boston, USA, October 07-09, 2007
Is the competence… Consequences on competitiveness
Rare? Hard to imitate?
Hard to substitute?
No - - Competitive parity
Yes No -Temporary competitive advantage
Yes Yes No Competitive parity
Yes Yes YesDurable competitive advantage
Median for each question:> 3 yes< 3 no
= 3 verify μ
Perceived competitive advatange
Adapted from: Barney (1992)
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MCPC 2007Boston, USA, October 07-09, 2007
R1 R2 R1 R2 R1 R21. Employment of product modularity 0.35 0.272. Integration of client information 0.27 0.363. Application of product configuration systems 0.35 0.284. Information and communication mgmt. aligned with IT systems 0.36 0.355. Management of product variety costs 0.19 0.176. Flexible production scheduling 0.40 0.297. Sales and Marketing integration with other functions 0.32 0.208. Efficient supply chain management 0.52 0.399. Efficient development of new products 0.20 0.2010. Efficient fabrication and assembly 0.31 0.2511. Coordination with retailing network 0.26 0.2012. Flexible logistics and handling of final products 0.24 0.2013. Utilization of a structured problem solving methodology 0.34 0.1814. Continuous learning and retention of employees 0.29 0.19
Temporary ParityCompetitive advantage
Durable
Ratio Σσ/Σμ
If < 0.3, acceptable consensus
Perceived competitive advatange
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MCPC 2007Boston, USA, October 07-09, 2007
Perceived competitive advantage
Durable advantage
Temporary advantage
Competitive parity
Current level of developmentWeak
developmentAverage
developmentElevated
development
7. Sales & Marketing integration with other functions
9. Efficient development of new products
12. Flexible logistics and handling of final products
2. Integration of client information
11. Coordination with retailing network
10. Efficient fabrication & assembly
1. Employment of product modularity
4. Information and communication mgmt.
13. Utilization of a structured problem
solving methodology
14. Continuous learning & retention
of employees
6. Flexible production scheduling
8. Efficient supply chain management
3. Product configuration system
5. Management of product variety costs
Commercialization & Marketing
New production & management technologies
Furniture enterprise of the future project
Human capital
Business models
Perceived competitive advantage
Durable advantage
Temporary advantage
Competitive parity
Current level of developmentWeak
developmentAverage
developmentElevated
development
7. Sales & Marketing integration with other functions
9. Efficient development of new products
12. Flexible logistics and handling of final products
2. Integration of client information
11. Coordination with retailing network
10. Efficient fabrication & assembly
1. Employment of product modularity
4. Information and communication mgmt.
13. Utilization of a structured problem
solving methodology
14. Continuous learning & retention
of employees
6. Flexible production scheduling
8. Efficient supply chain management
3. Product configuration system
5. Management of product variety costs
Commercialization & Marketing
New production & management technologies
Furniture enterprise of the future project
Human capital
Business models
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MCPC 2007Boston, USA, October 07-09, 2007
New competencies suggested
• Cooperative network
• Development of new markets and offers
• Change management
• Reverse logistics
• Polyvalent employees
• Management of individual competence profiles
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MCPC 2007Boston, USA, October 07-09, 2007
Conclusion and further questions
• Lean production can contribute much more to mass customization:• From order to delivery From concept to commercialization
• Knowledge front-loading, heavy-weight product manager, revenue cost management, set-based CE,...
• Complementary references needed: • Delivery services• Product configuration systems
• Limits: Researchers’ point of view vs. Industry point of view
• Is a structured problem-solving methodology important for mass customization ?
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MCPC 2007Boston, USA, October 07-09, 2007
THANKS FOR YOUR ATTENTION!
QUESTIONS?
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