Mass Customisation and Highly Individualised Solutions. Stretching Mass Customisation Beyond the Traditional Paradigm of Industrial Production.

Globalisation if creating large changes in our social and economic system, whereas demand patterns are becoming more and more diversified and highly localised. The difference between global production and local demand relates to a paradigmatic shift in the way of looking at production and consumption patterns. The reference to a paradigm shift helps emphasising the inherent limits of industrial production and the elements of changes brought about by the possibility to generate highly individualised solutions. The concept of mass customisation was introduced to extend the domain of industrial production beyond its original limitations, however it is strongly linked to the paradigm of industrial production and not always usable to support and explain new ways of organising value creation. This paper proposes an analysis of this paradigm shift through three cases, which emphasise some elements of mass customisation that are still relevant to the new paradigm. At the same time the paper emphasises the limits of this concept and the need for a new perspective view to interpret the ongoing change in production and consumption systems. Introduction: Mass customisation between two paradigms Globalisation is a scary buzzword used in many logical contexts: when talking about markets we use this term to indicate the extension of a market logic to the whole planet. We implicitly apply the same criteria dominating the markets in industrialised countries to the cultural contexts of industrialising countries and suppose people in those countries will eventually live as we are living today (assuming that the planet support the our highly resource-intensive lifestyles). When thinking of industrial production we use the term globalisation to indicate the progressive shift of industrial production from industrialised countries to new areas, where the costs of labour is lower. The implicit assumption in this case is that industrialised countries are facing a phase of “deindustrialisation” in which manufacturing-related jobs will decrease rapidly. This causes pessimism and fears about our economies. Such pessimism also generates suspicious interpretations about the growth of the service sector, which are seen as a burden to the manufacturing economy (Boden and Miles 2000). However globalisation could also suggest a different perspective, even when based on the same assumptions: global markets are not globalising needs, which in fact are always linked to a (cultural, economic, social and technological) context. Furthermore industrial capability to satisfy complex demands is supporting a differentiation of needs, and the fragmentation of markets to smaller and smaller segments: industries are now aiming at satisfy individuals, rather than target groups. This is particularly evident in developed countries, where they can be supported by advanced services and infrastructures. While manufacturing is being shifted to developing countries, the demand for industrial products in developed countries is becoming more and more complex. Such a change is the result of deep social, cultural, economic and technological changes that are challenging the ultimate presumptions upon which industrial production was based. Such changes concern the structure of society (ageing of society, migration flows) the structure of social groups (the crisis of the traditional family) and the physical and technological infrastructure that support economic systems (networked societies, new environmental problems). Those problems are often transcending the boundaries of global production systems and asking for local and individualized solutions. At the same time those problems are likely to create new opportunities for innovation and employment in those countries that have lost manufacturing jobs. The divergence between global production and local perspectives can be related to a paradigmatic difference between two ways of looking at industrial production and consumption systems: a new paradigmatic framework is emerging, which is grounded on the network economy, is highly context sensitive for what concern both production and consumption aspects, includes end users in the production process and allows for highly individualized solutions. (Manzini, Collina et al. 2004). The difference between the two perspectives may be seen as a paradigmatic shift or simply as an advanced stage of industrialization. The authors of this paper are well aware that the changes outlined above do not present any real elements of discontinuity that would clearly define a paradigm change. However the definition of two different paradigms may help focusing on the fundamental element of this epochal passage, thus exploring the potential of mass customization in this context. For this reason this paper will refer to the existing situation as the paradigm of industrial production and the emerging paradigm as the paradigm of highly individualised solutions. In the paradigm of industrial production the value creation process was conceptualized in terms of value chain (Porter 1985). According to this concept, value creation is not only sequential, but also implies that value is ‘added’ along the production process, up to the moment in which the product was sold. In this framework customers were seen as destroying the value created during the production process. For producers, industrial value was ‘realized’ in the transaction which joined and separated them from customers.(Ramirez 1999) The new paradigmatic condition maturated with technological advancements, which allow work practices to be less linear and sequential. Distributed processing and concurrent engineering made the process of value creation more synchronic and interactive. This was the favourable condition to review the role of the customers. In the new framework value is no longer “added” until the point of sale – to be destroyed by the “consumers”but is rather co-created by a network of actors, including the traditional value producers (manufacturers, service providers) and customers. As it often happens during major paradigm shifts (Kuhn 1962; Arbnor and Bjerke 1997) the two paradigms are co-existing in the same time. However the ultimate presumptions supporting the old paradigm of industrial production, which could be very effective to interpret the logic of globalisation, would probably be not sufficient to explain the emergence of new solutions that address localised and highly individualised needs. New methodological approaches, emerged to correct the lack of explanatory powers of the old paradigm, are creating links to the new ones. Mass customisation is probably one of those approaches. Here the rigidity of mass production was mediated by the new technological possibilities to differentiate the offering, thus targeting to narrower, but more differentiated target groups. The limit of the old paradigm, however, is in the persistence of industrial products as the link between producers and customers: in this context mass customization can only refer to products (Kaplan and Haenlein 2006). Furthermore mass customization integrates the customer in order to obtain specific information about needs and desires that can be translated into product specifications. Although such integration would increase product variety and reduce the size of target groups it would not allow for solutions that fit extremely small, even individual target groups. The logic of industrial production cannot be bent to individual solutions, unless a paradigm shift is considered, which review those factors from different perspectives and on the basis of different ultimate presumptions. Such a paradigm shift has been (explicitly or implicitly) described as a shift from material production to value coproduction (Ramirez 1999; Berger and Piller 2003) from economies of scale to economies of scope (Normann and Ramirez 1994) , from traditional production-consumption systems to new systems which enable final users, by promoting them to the role of active co-workers (Manzini 2005; Morelli 2006).The perspective of a paradigm shift is therefore challenging the concept of mass customization, posing some fundamental questions about the validity of such concept, its characteristics and its implications in the new paradigm. Mass customisation and product architectures One factor that substantially contributes to the shift from mass production to mass customisation is the shift from a vertical/integrated industry to horizontal/modular one. Fine (Fine 2000) describes such a shift as connected to a change from integrated product architectures to modular structures, which allow faster development pace and frequent and profitable product upgrade (Fine 2000). Such a change is described as a “double helix”. According to Fine( Figure 1), products begin their lives in integrated product architectures. In this phase manufacturers are exclusively using internal production capabilities. After some time the manufacturers will experience the pressure to disintegrate (modularize) the product architecture – in order to facilitate innovation processes, thus keeping up the fight against niche competition. The modularisation also makes it possible to reduce the product complexity and to compensate for the organizational rigidity. Figure 1 The “double helix” (Fine; 2002) Personal computers are an example of products, which have followed the loop of the “double helix” from an integrated to a disintegrated architecture. IBM, the first manufacturer of personal computers in the 80s initiated the disintegration of the computer architecture, which made it possible to produce the hard disk, the processor, the operative system etc. separately, and then assembly them afterwards into a PC. This strategy also allowed innovation in one of the components to be easily integrated in the whole product, thus increasing the innovation speed of the whole product. The process of disintegration and modularisation o