Mass customization is a product design strategy. It is an incredibly important aspect of a manufacturing organization in that it allows the organization to remain both profitable and relevant in a competitive marketplace. A competitive market is one which constantly changes with the preferences of the consumers. Manufacturing is an interesting industry due to the incredibly high overhead costs associated with putting the supply chain and factory manufacturing processes in place. When a manufacturing company makes the high investment needed to surpass the barrier to entry in the industry, they must be able to adapt to a changing consumer base or risk becoming quickly obsolete.
If the consumer base raises demand on a new or improved feature to a specific product, a manufacturing company must be able to quickly and easily adapt to address that increase in demand without breaking the bank and completely retooling their manufacturing processes. This means investing in computer technology and human capital, which can quickly adapt.
Mass customization is great for the consumer because it means filling demand gaps, which makes better and cheaper products that consumers actually want versus forcing consumers to purchase products that do not fully address their needs.
Another reason mass customization is important is to handle market externalities. For example, the recent COVID-19 outbreak has led to a lack of hand sanitizer in the market. Companies such as Tito’s Vodka were able to retool their factories and use their technology to fill the demand gap for this product, which they have never produced before.