Mass customization: mass customization is the process of modifying ones products according to the specifications of a customer. Where mass marketing lies at one extreme, mass customization lies at the very opposite end. Mass marketing is when the same product is sold to many customers with no modification. With the times changing, one single product category is not enough to cater to all the needs of the market. Hence products with variations are marketed. Mass customization would be the same product manufactured and sold exactly as per the customer’s requirements.
This, although beneficial for the customer, is a nightmare for firms. The main reason being that mass customization requires a very adaptive production system. Customized products cannot be made at a standard assembly line due to the changes required in each end product. This entails various complications such as receiving data from consumers, implementing that data and tailoring a product exactly to the customers needs. Mass customizations results in the customization of the manufacturing line as well at each production cycle with one cycle resulting in the production of one product.
This results in a major increase in costs, both fixed and variable. Although such an idea seems to be absurd, firms may opt to do it in order to achieve customer satisfaction. The essence of mass customisation is to achieve benefits of mass production along with the output of mass customization. This requires computer aided manufacturing systems to control and plan the fabrication of goods on the assembly line as per the customer’s requirements. This is exactly how Dell came at the forefront as one of the biggest personal computer dealers in the world.
In a time where most firms sold standard PC’s, Dell started selling customized computers. Whatever the customer asked for was delivered. This resulted it a huge, loyal customer base. Dell was capable of doing this due to the fact that customizing computers is not as expensive in the end as compared to customizing cars or electronic items. Even now, although it does offer a wider array of models to choose from, it still charges higher for a PC that is totally customized, from scratch. Expert Systems: Expert systems aim at acquiring the knowledge of experts in a certain field and applying this knowledge on a daily basis.
Think of it as a repository of knowledge, a library, human experience and artificial intelligence in one single computer system. Expert systems are usually used in industries where expert knowledge is a valuable asset such as medical institutions, oil industry etc. These experts take years to reach their level of knowledge and an expert system aims to gather this knowledge and distribute it from one single point. The technology required for such a system needs to be advanced and capable of handling two major issues: handling huge amounts of data and answering queries in the best possible manner.
Experts are interviewed and their knowledge is stored on these systems. This knowledge takes a huge amount of space and thus needs to be managed in an efficient way to make it as quick as possible to search though it. Once this is done, the interface that connects the user to this repository of data should be capable of assessing the query and providing the appropriate solution backed by the existing data. Such systems are artificially intelligent and can answer queries appropriately even in the absence of any human expert. Due to this, it is more applicable in a business where expert knowledge is required more frequently.
Hospitals make use of such systems for screening purposes of patients. Many times, such systems are also used (not solely but as an assistant to a human expert) for diagnosis of various complicated diseases. Its like having various libraries and knowledge form various experts (doctors) at ones fingertips and this helps in arriving at a better diagnosis of a patients condition. Enterprise Resource Planning: as its name suggest is the careful planning and usage of all of a firms resources. An ERP system is one such system that assists a firm in achieving this goal.
It aims at unifying all the processes within a firm into one single, seamless whole. By doing such integration, the processes will be parts of one whole and will operate smoothly without any discrepancies. The purpose is to integrate every step and process from the lowest level to the top most. At the end of the day, the result is a system that is in total control of the firm. This helps in establishing better communication channels among various entities within a firm and also helps in keeping checks and balances on the information and resource flow throughout the organization.
All this amount of data is almost impossible to manage manually and this is where ERP systems come in. most of the processes are computerized so as to enhance them in the real world. Processes are re-engineered to perform at the optimum level and are supported by the ERP system. The ERP system provided by SAP-AG is one such system. It has modules that integrate a firms supply chain, human resource management, planning, accounts, procurement, selling and all the processes that a firm could require. Furthermore, this system is customizable and can be changed as per the firm and the industry it operates in.
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