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Gensheng (Jason) LiuPh.D. Candidate

Operations and Management Science DepartmentCarlson School of Management

University of Minnesota

August 6, 2005OM Division PhD ConsortiumAnnual Meeting of AoM, Hawaii

A Configurational Approach to Mass Customization and Its Implications for

Work Design

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Dissertation

Title On Mass Customization: Configurational and Contingency perspectives

Dissertation Committee Roger Schroeder (Advisor, OMS) Rachna Shah (Advisor, OMS ) Susan Meyer Goldstein (OMS) Christopher Bingham (Statistics)

Stage: Will defend proposal in two months

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Dissertation

Research questions Are there different patterns in manufacturers’ achievement on mass

customization capabilities? Does work design has any impact on manufacturers’ achievement on mass

customization capabilities? When is mass customization the most appropriate strategy for a manufacturer? What are the cultural and structural factors that facilitate the achievement of a

manufacturer’s mass customization capabilities?

Primary research methodology: Cross-sectional survey

Unit of observation: Plant

Practical contribution: Better understanding of implementation conditions and facilitating factors of mass customization.

Academic contribution: Empirically investigate conceptually stated principles about mass customization.

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A Configurational Approach to

Mass Customization and Its Implications for Work Design

Dissertation Research Essay 1

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Outline

Research Motivation

Propositions and Hypotheses

Methods

Results

Discussion

Summary and Conclusion

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Research Motivation

Mass Customization: A New Production Paradigm

Key drivers Increasing customer demand for product variety and customization Shortening life cycle of products Technology development

Definition The ability of a firm to quickly produce customized products on a large scale at a

cost comparable to non-customized products (Tu et al. 2001).

Research Da Silveira et al. (2001): “Literature on mass customization implementation is still

incipient. Most claims are drawn from limited case examples or based on educated guesses from authors rather than from hard evidence obtained through exhaustive research.”

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Research Motivation

Achievement of Mass Customization Capabilities

Mass customization strategy is only appropriate for certain market situations (Hart 1995, Salvador et al. 2002)

Not all companies that pursue mass customization strategy actually succeed (Pine et al. 1993, Zipkin 2001)

Human resource management has an impact on mass customization (Lau 1995, Kakati 2002)

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Research Motivation

Research Questions

Are there different patterns in manufacturers’ achievement on mass customization capabilities?

Does work design has any impact on manufacturers’ achievement on mass customization capabilities?

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Propositions & Hypotheses

Proposition 1: Manufacturers can be classified into distinct groups based on their achievement on various mass customization capabilities.

A configurational approach toward mass customization (taxonomy)

An extant typology of mass customizers (Duray et al. 2000) Degree of customer involvement in product design Degree of product modularity

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Propositions & Hypotheses

Sociotechnical systems perspective on work design Fit between social subsystem and technical subsystem within an

organization Nine principles (Cherns 1978 & 1987) Applications in OM

Cellular manufacturing (Huber & Brown 1991) Lean production (Niepce & Molleman 1998)

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Propositions & Hypotheses

Hypotheses 1a-j: In work design, compared to other manufacturers, mass customizers use more of the following factors.

STS Principles Measures Hypothesis

Compatibility; Minimal critical specifications

Employee empowerment 1a

Variance control; Information flow

Feedback to shopfloor employees 1b

Autonomous maintenance 1c

Multifunctionality; Boundary location

Multifunctional employees 1d

Management breadth of experience 1e

Cellular manufacturing setup 1f

Support congruence Shopfloor assistance to employees 1g

Task-related training for employees 1h

Human values Human goodness 1i

Incompletion Continuous improvement and learning 1j

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Methods

Sample and data collection “High Performance Manufacturing” project 6 countries: U.S., Germany, Finland, Sweden, Japan, and Korea 3 industries: machinery, electronic, and automotive 189 plants

Measurement 7-point Likert scales Mass customization capabilities scale based on Tu et al. (2001)

Data analysis Cluster analysis for proposition 1 ANOVA for hypotheses 1a-j

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Methods

Mass customization capabilities scale

MC1: We are highly capable of large scale product customization.

MC2: We can easily add significant product variety without increasing cost.

MC3: Our setup costs, changing from one product to another, are very low.

MC4: We can customize products while maintaining high volume.

MC5: We can add product variety without sacrificing quality.

MC6: Our capability for responding quickly to customization requirements is very

high.

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Results I: Empirical Taxonomy

Derivation of the cluster solution

Outlier detection – 172 plants retained

Two-stage cluster analysis Hierarchical cluster analysis – 3 cluster solution most viable K-means cluster analysis

Final cluster centroids

Group 1: non-customizers; Group 2: inefficient customizers; Group 3: mass customizers

Variable MC1 MC2 MC3 MC4 MC5 MC6 n

Group 1 4.849 3.818 3.989 4.302 4.791 4.851 74

Group 2 5.898 4.263 3.789 5.471 5.404 5.822 57

Group 3 5.768 5.297 5.435 5.841 5.898 5.862 41

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Results I: Empirical Taxonomy

Validation of the cluster solution

Replication A second nonhierarchical analysis: 95.3% overlap Split sample replication: 91.0% and 76.2% overlap

ANOVA on cluster variate Only 3 out of 18 comparisons not significant, but all as expected

Discriminant analysis Both discriminant functions significant. Cross-validation: Jack-knifing procedure results misclassification rate of

4.1%.

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Results I: Empirical Taxonomy

Validation of the cluster solution

Predictive validity Manufacturing flexibility: mix flexibility and volume flexibility Product modularity (Duray et al. 2000) Time-based manufacturing practices (Tu et al. 2001) All variables are significantly different between the three groups as

predicted by theories or extant research

Contextual factors of mass customization Country effect: Germany has more inefficient customizers and Japan

has more non-customizers. No industry, plant size, or plant age effect

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Results I: Empirical Taxonomy

Proposition 1

Proposition 1 supported: Manufacturers have different patterns in terms of their achievement on various mass customization capabilities

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Results II: Work Design For Mass Customization

  Group 1 Group 2 Group 3

Non-Customizers Inefficient Customizers Mass Customizers F-value

  n = 74 n = 57 n = 41 (sig.)

EMPOWER -0.253 (2) 0.184 (1) 0.182 4.05 (.019)

FEEDBACK -0.167 (3) -0.203 (3) 0.359 (1,2) 4.76 (.010)

AUTOMAIN -0.388 (2,3) 0.084 (1) 0.421 (1) 9.90 (.000)

MULTIEMP -0.375 (3) -0.009 0.411 (1) 9.67 (.000)

MGTEXP -0.097 (3) -0.266 (3) 0.405 (1,2) 6.17 (.003)

CELLULAR -0.287 (3) -0.163 (3) 0.538 (1,2) 10.50 (.000)

EMPASSIS -0.306 (3) 0.008 (3) 0.491 (1,2) 9.30 (.000)

TRAINING -0.358 (3) -0.001 0.404 (1) 8.66 (.000)

GOODNESS -0.368 (2,3) 0.065 (1) 0.486 (1) 11.14 (.000)

CIMPROVE -0.291 (3) -0.037 0.286 (1) 4.58 (.012)

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Results II: Work Design For Mass Customization

Hypotheses 1a-j

Hypothesis 1a marginally supported: Mass customizers empower employees marginally more than non-customizers.

Hypotheses 1b-j all supported: All these work design factors have

significant effect on the achievement of mass customization capabilities.

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Discussion

Work design has important impact on mass customization. From the sociotechnical systems perspective, to successfully implement mass customization strategy, the social system should fit the technical system.

Human resource bundles (MacDuffie 1995, Ichniowski et al. 1996)

All work design factors contribute to customization ability.

Among the work design factors, assistance to employees, feedback to employees, management breadth of experience, and cellular manufacturing setup also contribute to customization efficiency. Inefficient customizers have even less management breadth of

experience and feedback to employees than non-customizers.

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Contribution & Limitation

Contribution The first empirically based taxonomy of mass customization. Apply sociotechnical systems theory in mass customization

research. Empirically investigate the relationship between work design and

the achievement of mass customization capabilities, especially identify the work design factors that contribute to efficiency of customization.

Limitation Work design factors not complete from the sociotechnical

systems perspective (i.e., human values)

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Related research

A contingency approach toward mass customization: When is mass customization the most appropriate strategy for a manufacturer?

Cultural and structural factors that facilitate mass customization

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Questions and Comments ?