Customer Relationship Management

Read the caselet carefully and answer the following questions:

1. Explain, with appropriate example, how a global computer manufacturing company can practice mass customization and create competitive advantage

2. How can Customer Relationship Management (CRM) be an enabling factor to derive full benefits of mass customization?

Mass customization is best defined as a delivery process through which mass-market goods and services are individualized to satisfy a very specific customer need, at an affordable price. Based on the public's growing desire for product personalization, it serves as the ultimate combination of "custom-made" and "mass production." And it is rapidly emerging as the organizing business principle of the 21st century.

Simply stated, mass customization is about choice; about giving consumers a unique end product when, where and how they want it. During the last 15 years, choice has become an important ingredient of consumer purchasing decisions. During this period, the number of automobile models has increased from 140 to 260; the selection of soft drinks from 20 to 90. Today, the U.S. market alone offers consumers 3,000 brands of beer, 50 brands of bottled water, 340 kinds of breakfast cereals, 70 styles of Levi's jeans and 31 types of bicycles.

With choice playing such a critical role in consumer buying habits, mass customization is becoming increasingly evident in day-to-day life. For example, internet-based e-commerce now makes it possible for anyone to order a computer designed to his or her exact needs and specifications. Or compile music CDs containing any combination of songs. Or obtain customized home mortgages. Or design a one-of-a-kind friend of Barbie®, complete with unique name, clothing and personality.

Unlike mass production, which produces some variety of an item in high volumes, mass customization is characterized by small volumes - in many cases, lot sizes of one. It is also characterized by competitive cost, timely deliveries and a move away from centralized manufacturing to more distributed production. Consequently, when combined with the very latest digital technology, such as e-commerce and robotics, mass customization not only benefits the consumer, it offers the manufacturer significant benefits as well: a high degree of product/service flexibility, reduced inventory risk, and a competitive edge in the marketplace.

In agile product development, product development teams must concurrently develop flexible processes that are so agile that companies can quickly develop a broad portfolio of niche market products, build products to order, mass customize individual products at mass-production speed and efficiency, and rapidly introduce a steady succession of "new" products that are really planned "variations on a theme" based on common parts and modular product architecture.

Business Process Engineering

Business Process Engineering (BPE) focuses on the design and the improvement of entire process through the company, such as the fulfillment of customer orders from the first contact with the customer to the