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Including papers from...Emerging R&D and technology sources: a Russian perspective on the internationalisation of manufacturing technology
Edited by Anna Trifilova
Introduction
Mass customization (MC) is the ability to manufacture a relatively high volume of different product options for a relatively large market that demands customization, without substantial tradeoffs in cost, delivery, and quality (adapted from [46] McCarthy, 2004). It combines the cost-saving effectiveness of mass production with the value-added processes associated with product customization ([77] Westbrook and Williamson, 1993; [6] Berman, 2002; [16] Duray, 2002). It is widely acknowledged that MC provides companies with competitive advantages ([38] Kotha, 1995).
MC ability is dependent upon two main competencies. The first is to accurately understand customer needs and the second is to procure appropriate and timely supplies for the manufacture of the required product configurations ([77] Westbrook and Williamson, 1993; [1] Åhlström and Westbrook, 1999; [79] Zipkin, 2001). However, uncertainties in demand or supply make it difficult to efficiently match supply with demand. A company's ability to cope with demand uncertainties directly affects its ability to satisfy diversified customer demand ([20] Fisher, 1997). Likewise, a company's ability to cope with supply uncertainties affects its production efficiency, and will indirectly impact its ability to satisfy diversified customer demand by preventing supply-demand mismatches ([21] Fisher et al. , 1994; [41] Lee, 2002). Thus, effectively managing both demand and supply uncertainties should impact a company's MC ability.
In this paper, we theoretically link demand and supply uncertainty management to MC, and empirically investigate this relationship with survey data. In the next section, we use organizational information processing theory (OIPT) to identify mechanisms that companies use to manage demand and supply uncertainties, and propose hypotheses about their relationships with MC ability. Then, we describe the research methods and report the findings. Academic and practical implications of the findings are discussed in the last section.
Theoretical background and hypotheses
The impact of demand and supply uncertainties on supply chain design has been widely discussed in the literature. [20] Fisher (1997) categorized supply chains into two types depending on the product's demand characteristics: efficient supply chains for functional products with predictable demand, and responsive supply chains for innovative products with unpredictable demand. [41] Lee (2002) expanded Fisher's framework by including supply uncertainties. Based...