Page 51 - DMGT501_OPERATIONS_MANAGEMENT

Unit 2: Product and Service Design

Notes

Caselet Customization at BMW

— by a BMW Mini Owner
riving a BMW-Mini often is seen as the ultimate expression of individualism.
People paying the extra premium for a small, but fun car often select a Mini to
Dexpress their individual lifestyle and to set themselves ahead from the crowd.
For me, this always seemed to be a bit a contradiction, as I have seen very few really "cool"
people driving a Mini, and at least in Germany, Mini drivers seem to follow a general
pattern of belonging to a conservative upper middle-class medium aged segment living
in larger cities. (I have, however, to admit that driving a Mini really is fun and a very nice
experience). Also, from a mass customization point of view, a Mini has rather limited
customization offerings. While the configurator suggests plenty of choice options, they
are rather limited, especially with regard to style customization like color combinations
between body, roof, and interior. All choices seem to be perfectly balanced to deliver
neatly tuned combinations fitting the Mini brand image as seen by its corporate parents.
But now, there is ultimate choice. Customers now can freely design the Mini's roof with
their very own design. The roof is one of the signature design features of the Mini. It is
often selected in a different color than the body. And now you not only can select from 15
or so standard colors, but really design your own.

Source: http://mass-customization.blogs.com
2.8 Standardization of Products and Services

Eli Whitney's use of standard parts enabled his firm to gain a competitive advantage in its bid
for an army rifle contract. Henry Ford's assembly lines were made possible by improved
manufacturing processes that allowed unskilled workers to quickly attach standard parts to
standard cars.

Standard end products enable manufacturers to use 'make to stock' market orientations, thereby
decoupling manufacturing decisions from market transactions.
Standardization of products and manufacturing inputs can also help a firm achieve:

1. Lower Product Costs: Economies of scale occur when product design costs are spread over
a large volume. Very often, a standard component in a product provides the same
functionality without paying for new engineering work and customization.

Standardized products often justify investments in more efficient production processes.
Higher volume production systems often allow the process to use less skilled employees.
However, such standardized parts often result in reduced flexibility.
2. Quicker Product Design: Standardized product interfaces often reduce product design
periods as has been demonstrated in personal computer designs. Manufacturers have
benefited by industry standards that define the protocol that must exist between each
module.

3. Enhanced Product Flexibility Capabilities: Standardized features that use standard
interfaces permit designers to enhance its offerings without risking incompatibility as
long as they stay within the specified parameters.

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