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Proposal of a Reference Framework to Integrate Sustainability and Mass

Customization in a Production Paradigm

By Donatella Corti, Marco Taisch, Golboo

Pourabdollahian, Andrea Bettoni, Paolo

Pedrazzoli, Luca Canetta

Originally presented at 2011 World Conference on Mass

Customization, Personalization, and Co-Creation:

Bridging Mass Customization & Open Innovation

November 16-19, 2011

San Francisco Airport Marriott Waterfront

Proposal of a Reference Framework to integrate Sustainability and Mass Customization in a production paradigm

Abstract Mass customization strategy is applied by firms in

order to make them more customer-oriented and make each individual customer a source of opportunity and hence profit for the firm. Sustainability on the other hand brings not only eco-efficiency for the company, but also has a great impact on economic efficiency and social perspective of the firm. Hence integrating these two concepts together to develop a new strategy of sustainable mass customization can create a significant value for companies in today’s globally competitive environment. This research aims at introducing a reference framework to implement sustainable mass customization. 1. Introduction

Nowadays in the high competitive environment, firms try to gain a sustainable competitive advantage which enables them to compete and survive. Mass customization and sustainability are two concepts that have become very popular in recent years, nonetheless how to integrate them in a successful way is still an unexplored field in both literature and industrial practice. Mass customization strategy can provide customers with individualized products while being efficient as a mass producer. Sustainability also helps industries to compete in terms of added value dealing with customers who demand for greener and more social responsible products day by day. The results presented in this paper are the output achieved during the first step of a broad project, the Sustainable Mass Customization – Mass Customization for Sustainability (SMCS) project, funded by the European Commission within the VII framework programme [10]. In particular, the piece of research this paper focuses on is aimed at developing a sustainable mass

customized reference framework for the design of an extended production system which can act as a backbone for applying SMC strategy. The reference framework has to be considered as a first step towards the introduction of Sustainable Mass Customization (SMC) as a new production paradigm that can bring a competitive advantage for firms integrating the two concepts of mass customization and sustainability. The framework development is described in detail hereinafter; mutual impacts of these two strategies, pointing out that one can be a driving force of the other, are also highlighted. In order to clarify the procedure that led to the final framework definition, three different versions of the framework will be presented, two are focused on a single concept at a time (namely, mass customization and sustainability) and the last one is the integration of the previous two. All the required activities for the development of a new product and the corresponding production system and supply chain according to the new strategy have been introduced taking into account a life cycle perspective. 2. Mass Customization & Sustainability

The term “mass customization” was first coined by Stan Davis in his book “Future Perfect” in 1987 (Davis, 1996). He defined mass customization as a process in which companies try to reach the same large segment of the customers in mass market while treat them individually like a customized market. During time modified definitions of mass customization were suggested by different scholars. Pine (1993) emphasizes on large variety of product and prices comparable to standard products as the main pillars of mass customization. Tseng and Jiao (2001) defined a more pragmatic definition of the concept as “the technologies and systems to deliver goods and services that meet individual customers’ needs with near mass production efficiency.” Piller

(2004) gives a precise definition of mass customization focusing on main issues that differentiate it from similar concepts. In his opinion mass customization is a “Customer co-design process of products and services, which meet the needs of each individual customer with regard to certain product features. All operations are performed within a fixed solution space, characterized by stable but still flexible and responsive processes. As a result, the costs associated with customization allow for a price level that does not imply a switch in an upper market segment..

The concept of sustainability has been discussed a lot during recent years and it has become one of the concern issues of industries, governments, NGOs and universities in both national and international level. In 1987 the World Commission on Environment and Development defined sustainability as “meet the needs of the present generation without compromising the ability of future generations to meet their own needs” (United Nations, 1987). However the term “sustainability” was later explicitly explained by triple bottom line (TPL) approach which considers Economic, Environmental and Social as the three main pillars of sustainability (see Figure 1).

Fig 1: Three pillars of sustainability

(Adams, 2006)

While environmental pillar concentrates on reduction of hazardous material usage and saving the natural resources, social pillar concern is mostly on social responsibility, health and safety. More obviously economic pillar focuses on terms such as eco-efficiency, environmental accounting and ethical investments.

3. Proposal for a Sustainable Mass Customized (SMC) Reference Framework One of the outcomes of the broad literature review related to sustainability and mass customization carried out within the SMCS project was the identification of a missing point in previous researches. Indeed what seems to be ignored in previous research and studies is the relationship between mass customization and sustainability and the way they can both impact each other. In other words there is a lack of research about the fact that if “Sustainable mass customization” is an oxymoron or not.

The reference framework has been developed in a way to be capable to create a link between mass customization and sustainability concepts in order to contribute to fill in the aforementioned literature gap. The framework aims at being a reference for a company that is interested in offering a mass-customized product improving the sustainability performance at the same time. The framework identifies the activities that have to be carried out during the design of a solution space in order to achieve this goal. The solution space is defined as the combination of three main entities (1) product, (2) manufacturing process / manufacturing system and (3) supply chain. In order to define the sustainable mass customization strategy it is important to develop the framework considering these three entities simultaneously taking into account that activities related to each entity can have a mutual impact on each other. Therefore these three entities are used as columns in the framework.

Along the other dimension, the framework considers the different steps included in the design process. The process defined by Ulrich and Eppinger (2008) has been used to characterize the design process and the six sequential steps (phases) proposed by them have been included. In order to develop a new product all these steps/phases should be passed through. The first phase is planning phase, which is the link to advanced research and technology development activities. The process starts with the planning phase and going through other phases ends with production ramp-up. The output of each step is the input for the next one. In planning phase the focus is on investigation of different alternatives while in concept development different concepts related to each entity are generated and evaluated. From system-level design we enter a more detailed design phase by definition of entity structure and we reach the detailed phase called detailed

design by very detailed parts of each entity. Eventually the process is finalized by going through testing phase and then production ramp-up. For each phase and each entity the framework defines required activities and guidelines that integrate the two perspectives of sustainability and mass customization. The final framework is thus a tool that gives guidelines about how to carry out each step of the design of the product, production system or supply chain in a way that both mass-customization level and sustainability are enhanced at the same time. In order to make clear how the framework has been developed and what are the main changes compared to a traditional design process, the different versions of the framework used to arrive at the final proposal are described. They reflect the sequential conceptual steps followed to arrive at the final framework and can be summarized as follows. General reference framework: this represents the traditional process used by a manufacturing company to design a new product along with the corresponding production system and supply chain. The main purpose of preparing this general framework is to make the backbone of the research from a general perspective which can be modified later according to mass customization and sustainability perspectives. Even tough some activities can be sector dependent, at this level of the research the list of activities has been kept as general as possible. This framework is the reference against which the actions to be introduced to become more sustainable and more mass-customized proposed in the next versions are compared and discussed. Activities composing the framework are the result of a brainstorming among the researchers involved in the project who took as a starting point the activities proposed by Ulrich and Eppinger (2008). Mass-customized framework: for every design step of every entity the list of activities included in the general framework has been reviewed in order to highlight what has to be changed in a mass-customized environment. Sustainable framework: the same logic of the previous framework has been applied, but this time the main focus was on what is needed to improve the level of sustainability. Sustainable and mass customized framework: the two previous versions of the frameworks have been merged in order to lay the foundations for a sustainable mass-customized production paradigm.

The frameworks development has been supported also by the use of IDEF0 diagrams that provide more detailed information about activities and their mutual relationships. In fact, for each activity the IDEF0 diagram maps inputs, output, controls and tools needed to properly run it. Due to space limit IDEF0 diagrams are not shown, but their use is worth of mention since they have been contributed to validate and structure the activities belonging to the design process whose synthesis is shown in the frameworks in Figure 2 – 5.

 3.1. General Reference Framework The general framework (see Figure 2) includes

activities that are required for any new solution space development in any company operating in any sector.

3.1.1 – Product design As it is shown in the general reference framework

the design process within product entity starts with formalizing general requirements where not only the needs of customers are identified, but also existing and emerging market trends are clarified. Then new product opportunities are investigated in order to uncover all the options and occasions which make it possible to develop a new product concept. In concept development step different product concepts are generated to satisfy the general requirements of the customers which have been investigated in the first phase. Generated product concepts in this phase do not need to be very precise and detailed since the details of the product will be investigated in next steps. After generation of alternative product concepts a few of them will be selected based on the criteria defined by the company. In order to realize the implications related to the product design and manufacturing, some level of research is needed to assure the feasibility of a successful product development based on the best engineering practices and technologies. Concept development phase starts with product architecture definition which is followed by definition of subsystems and interfaces. Hence after generating the configuration and layout of the product the level of integration or modularity of the product is clarified trying to define how the product components/parts and assemblies/sub-assemblies are going to be assembled in a whole system, the product. In detailed design step product parts geometry and tolerance are defined based on the desired product performance. Moreover the material selection for each component / part in the product will be carried out and a set of key performance indicators are identified in order to measure the performance of the product. These indicators can measure the performance of the product from

different aspect such as quality, cost and time. Using these KPIs the company can assess the product from different perspectives before going to testing and refinement phase. In testing phase product functionality, reliability and performance is tested and product design is refined. Finally in production ramp-up phase the early production output is evaluated.

3.1.2 – Production system design Within manufacturing system entity the planning

phase includes activities such as identification of production constraints and investigation of new production opportunities. The first activity aims at defining the limits and constraints which might be exist in production system. By identifying these limits the company can have a more realistic vision in order to investigate new product opportunities and generate product concepts in next phase. The activity of constraints identification is carried out considering new product opportunities and general requirements which are defined simultaneously in product design. At the second activity potential innovative and new production technologies are identified based on formalized general requirements and in order to define the manufacturing processes that will be involved in the product manufacturing process. At Concept development phase alternative proper technologies which enable the company to manufacture the product according to defined requirements are identified. In order to carry out this activity the firm should consider new investigated technologies, production constraints and supply chain constraints and opportunities defined in planning phase. Moreover strategic priorities and objectives specified by the company can have a great impact on enabling technologies definition. An estimation of manufacturing cost and time is carried out in this phase too. Moreover assessment of manufacturing technologies feasibility from a technological point of view is done. Therefore while the product concept feasibility is investigated from product perspective, the feasibility of production technology is investigated in parallel. Assessment of lifecycle feasibility which takes place at this phase evaluates if enabling technologies can make any constraints considering the defined waste management strategy in supply chain. The main activity of subsystem step is definition of assembly and disassembly scheme. Since a life cycle approach has been applied in this framework taking into account all the lifecycle of the product during design phase, the disassembly scheme of the product is defines at this stage as well in order to be able to use the waste strategy at the end of life of the product. Detailed design phase consists of defining the manufacturing system that includes

several aspects of manufacturing based on manufacturing concept, detailed parts drawings and assembly and disassembly scheme. It includes evaluating available manufacturing technologies in order to select the best manufacturing equipment to produce a product component, defining the layout and configuration of production system, definition of required tools, sequence of equipments in selected configuration, production processes and etc. On the other hand a set of manufacturing systems KPIs are identified indicators to measure the performance of manufacturing system in terms of efficiency, effectiveness, flexibility and other aspects which are important for the company. Definition of production plan is another important activity which takes place at this step. Going to testing and refinement step is simulation of production system behavior to detect errors and weakness. Then part production and production processes are refined. Finally the entire manufacturing system will be released in production ramp-up phase.

3.1.3 – Supply chain design Regarding supply chain entity the initial point of

planning phase is identification of supply chain constraints and opportunities. Identifying supply chain constraints and opportunities can act as a guideline for company to clarify the boundaries of supply chain. It also can result to generation of alternative supply chain strategies. In order to identify supply chain constraints and opportunities the company needs to take into account production constraints, new technologies and new product opportunities defined in product design and manufacturing design at the same time. At concept development supply chain strategy is defined to drive down operational costs and maximize efficiency. In addition service strategy is defined. Definition of types of service such as MRO (Maintenance, Repair, and Overhaul), Warranty, Claims management and etc can be included in service strategy. Moreover identifying of how and in what condition to offer these services consist other part of the service strategy. One of the most important activities in this step is definition of waste management strategy. Due to the fact that product life cycle approach is applied in design phase, waste management strategy, decisions and actions which should be implemented at the product end of life have to be identified in concept development phase of the supply chain. By identifying the waste management strategy the position of the product in waste hierarchy will be specified as well. System level design concerns with definition of supply chain structure and after sales structure while at detailed design phase supply chain partners are identified and a set of KPIs to measure

the performance of supply chain are presented. Moreover supply chain management policy is defined including distribution strategy, distribution network configuration, trade-offs in logistic activities, inventory management, etc. Obviously a supply chain management policy depends on the supply chain structure which is defined in sub-system level design. Like other two entities at testing phase the behaviour of supply chain is simulated and its structure is refined and eventually the entire supply chain is release in production ramp-up phase.

3.2. Mass customized version of reference

framework In order to come out with mass customized

version of reference framework (Figure 3) the general framework was reshaped from a mass customization perspective and activities were translated to a mass customized version defining what tasks should be done during beginning of life (design phase) of a mass customized product and when each task has to be carried out. The main differences introduced compared to the general framework are discussed.

Proposed changes are aimed at integrating in the design process the mass-customization pillars as: co-design; modularity, meet individual needs, near mass production efficiency and adequate cost level. What activities they influence and at which step of the design process they have to be considered have been the drivers leading the reasoning to develop this version fo the framework.

3.2.1 – Product design Customer co-design, one of the pillars of the mass

customization, has been considered in MC version of framework. Depending on the level of customer involvement, customer co-design can start from different phases for different firms (from involvement of customers to define solution space to postpone their involvement in design process).

As it is shown in figure 3 planning phase of product entity begins with formalizing customer requirements and which enables the company to specify features and aspects of customization in further steps. Then a complete analysis and investigation is performed regarding different possible aspects of customization based on customer requirements. Customization aspects (axes) are the major directions in which a product can be customized (e.g. Style/Aesthetic, Function/Performance, Fit/Comfort, etc). Later the aspects (axes), features and degree of customization are selected and defined. The aim of this activity is to select the directions and axes along which the

company tries to satisfy the specific needs of each customer for customization. This selection is based on the investigation which has been carried out in previous phase. Moreover the features of the product which will be customized are specified in this step. Another activity in this phase is assessment of customization feasibility of axes and features considering the constraints and limits of customization. At system-level design step the product platform is defined. Since using a modular architecture is an approach to mass customization, there is a need to define the product platform in system level phase in order to have a general view of how modules components can set together in subsystems. Defining product modules and interfaces is another task which is carried out at this phase and can lead the company to use standard modules in order to make customized products for the customers. Since the modular architecture has functionally de-coupled interfaces between components another aim of this activity is to define interfaces of modules as well. Definition of modules is a trade-off between performance (e.g. high efficiency, low weight) and the benefits (e.g. high product variety, flexibility) that can be achieved with modular designs. Detailed design concerns with definition of modules and parts geometry, tolerance an material as well as identification of a set of KPIs to measure the performance of product design from two perspectives, first from a general perspective such as quality, cost and time. Second, from Mass customization perspective, this identifies how much the company has been successful to make a mass customized product. In addition definition of the mass customized solution space is taking place at this phase too. Definition of a mass customized solution space lets the company to define which modules can be combined together and in which way by considering all discrepancies and non conformity that modules can have while interacting with each other. Finally in testing and production ramp-up nothing changes in comparison with general framework. The product functionality, reliability and performance is tested and refined and the early production output is evaluated.

3.2.2 – Production system design From the manufacturing point of view the starting

point of process is identification of production system flexibility and agility and other constraints. What is considered very important in a company applying mass customization strategy is that the enterprises should respond to the markets quickly and at a high speed. Accordingly, agile and flexible manufacturing has been one of major strategies of modern enterprises. On the other side rather than flexibility

and agility other production constraints and limiting factors regarding the manufacturing system which may limit the product development should be identified in this phase. Investigation of new production technologies and MC enabling technologies is another important activity at this phase. Then in concept development step the only activity which differs in comparison with general framework is Definition of required manufacturing flexibility and agility level and select proper MC technology. After investigating different MC enabling technologies and the identification of the current system flexibility and agility the enterprise should define the required level of flexibility and agility that they desire to achieve according to the degree of customization which is defined in parallel in concept development phase from product perspective. Moreover considering all different aspects of investigated technologies (cost, time, performance, etc) the MC technology that is going to be applied in the production system should be specified at this level. The main activities at system level design are defining manufacturing processes as modules and identification of assembly scheme and decoupling point. Process modularization provides excellent basis for continuous product renewal and concurrent /simultaneous development of products /process in separate parallel projects. In this way the company will have some standard processes and some customized processes which can help the company to increase its efficiency by using standard processes while producing a customized product using customized processes. Moreover identification of decoupling point that indicates how deeply the customer order penetrates into the goods flow is carried out at this stage. Regarding three next phases the only difference in comparison with general reference framework is definition of key performance indicators to measure the performance of manufacturing system from general perspective and mass customization perspective.

3.2.3 – Supply chain design Regarding supply chain entity the activities that

are modified in mass customized version of reference framework include definition of a supply chain strategy based on mass customization. Obviously MC technologies, product concept and degree of customization can affect definition of a MC supply chain strategy to a great extent. A customized service strategy should be introduced as well. A company can have a customized delivery, packaging, maintenance or any other service according to customer request. System level design task are also revised in order o define the structures of supply chain and after sales according to mass customization

strategy. Moreover flexible and responsive partners to be identified at detailed design phase in order to enable company to adapt itself to different and continuously changing demands of the customers. KPIs and supply chain management policy are revised according to MC strategy as well.

3.3. Sustainable version of reference

framework The sustainable version of the framework (see

figure 4) is developed taking into account all three pillars of sustainability.

The logic used to develop this version was to identify ways of improving the sustainability of the design activities included in the general reference framework. In some cases, new activities were considered advisable to increase the level of sustainability of the whole process.

3.3.1 – Product design While planning at product entity includes

formalizing requirements list including sustainability criteria the concept development phase concerns with generation of alternative product concept and selection of few based on sustainability. At system level design product architecture is designed according to sustainability criteria defined previously. This can include architecture design for disassembly, remanufacturing, reusability, dematerialization, transmaterialization and some other options based on the waste management strategy that is defined in concept development of supply chain. Moreover in order to design sustainable product architecture we can design product layout for life extension or use intensity. The resource consumption for production and disposal of products shall be reduced with this strategy. Detailed design consists of part design and choosing material for sustainability. Hence the materials will be selected to have a minimum environmental impact, to reduce energy and other resource consumption (environmental and economic), to reduce toxic and hazardous materials (environmental and social), to be secure and healthy to use for the customers (social), to reduce dependence upon fossil fuels, underground metals, and minerals (environmental) and to meet human needs fairly and efficiently (social and economic).

3.3.2 – Production system design Manufacturing system entity deals with

sustainability criteria as well. Innovative sustainable manufacturing technologies are investigated during planning step. These manufacturing technologies have a reduced energy consumption to manufacture product, decrease CO2 and greenhouse gas emission, increase efficiency of the process by applying less

resource and provide a high level security for workers. On the other hand during concept development manufacturing cost, time, environmental and social impacts is estimated in order to cover not only economic pillar of sustainability but also social and environmental ones. Accordingly a sustainable manufacturing system is defined at detailed design aiming at having sustainable equipments for manufacturing system. A set of KPIs to measure sustainability of manufacturing system are defined as well.

3.3.3 – Supply chain design Regarding supply chain the initial point is

identification of constraints and opportunities for a sustainable supply chain (SCC). A sustainable supply chain objective is to minimize the social, environmental and economic impacts of supply chain processes along all supply chain partners. This can act as a guideline for company to clarify the boundaries of supply chain and define supply chain strategy, structure and management policy based on sustainability in further phases. This includes definition of reverse logistics structure as well which plays an important role in a sustainable supply chain. Another critical issue in this version of framework is selection of sustainable partners to assure having a sustainable supply chain. Identifying a set of KPIs to measure sustainability of supply chain can help to provide a detailed evaluation as well.

3.4. Sustainable mass customized (SMC)

version of reference framework

Eventually the two reshaped versions of framework (mass customized and sustainable) are merged to come out with a sustainable mass customized reference framework that can be a first step toward implementing the sustainable mass customization paradigm. The sustainable mass customized (SMC) reference framework can create a significant impact in terms of sustainability and added value for the customer on its own. The aim of this integrated framework is to offer a holistic and

integral solution to the industrial entities. The result is shown in figure 5.

One of the main challenges in the development of sustainable mass customized reference framework is the orientation of integration. Due to the fact that finding the links and the mutual impacts that mass customization and sustainability can have on each other is one of the main goals of SMCS project and hence this research, the main focus of the research at this stage is to integrate the two frameworks in a way which leads to make mass customization as a driving force for the success of sustainability and vice versa. A clear example in this regard is definition of a sustainable product platform in system level design where mass customization is reached by having a modular architecture and therefore having a product platform. On the other hand this also leads to design of a sustainable product which can be disassembled, reused or remanufactured at the end of its life. Another example is in manufacturing entity where selected mass customization enabling technologies make the manufacturing process very flexible and agile which leads to a more sustainable manufacturing thanks to increased efficiency and decreased waste.

As it has been mentioned previously, the main objective of creation of sustainable mass customization as a new production paradigm is to provide firms with a competitive advantage that can help them to compete in the increasingly competitive environment. From this perspective applying SMC reference framework lets companies to give a central position and role to their customers by giving them the opportunity to be involved in design process and therefore creating an added value for them while at the same time reaching a higher level of sustainability through this policy. These levels of sustainability can be reached from environmental point of view by reduction of inventory level and waste resulting from mass customization strategy. On the other hand economic sustainability is enhanced through using standard modules, platform and processes. Improvement of social sustainability from customer side is rather obvious by having co-design.

Fig 2: General reference framework

Planning

Concept  development

System‐Level design

Detailed

design

Testing and refinement

Production Ramp‐up

Design Phases within Beginning of Life

Product

Process

Manuf. Syste

Estimate manufacturing cost and time

Assess manufacturing feasibility

Release entire production system

Define manufacturing system

Define production strategy

Refine production system

Simulate production system behavior

Define assembly and disassembly schem

Identify production constraints

Investigate new production technologie

Generate product architecture

Define subsystems and interfaces

Define product parts geometry and tolerances 

Choose parts materials

Evaluate early production output

Test product functionality, reliability and performance

Refine product design 

Generate alternative product concept and selection of few Investigate product concept 

feasibility

Formalize general requirements 

Investigate new product opportunities

Begin

ning o

f Life

Define manufacturing system KPIs

Assess life cycle feasibility

Define Product KPIs

Identify  enabling technologies

Fig 3: Reference framework from mass customization perspective

Planning

Concept  development

System‐Level design

Detailed

design

Testing and  refinement

Production  Ramp‐up

Process

Manuf. System

Identify MC enabling technologies

Assess manufacturing feasibility

Release entire production system

Define manufacturing system

Define production strategy

Refine production system

Define manufacturing processes as modules

Identify production system flexibility and agility and other constraints

Investigate new production technologies and MC enabling 

Define product platform

Define product modules and interfaces

Define modules & parts materials

Refine product design

Define MC solution space

Test product functionality, reliability and performance

Generate alternative product concepts and selection of fewSelect aspects, features  and degree of customization

Formalize customers requirements

Investigate customization aspects (axes) and new product opportunities

Begin

ning o

f  Define manufacturing system KPIs (General + MC )

Assess life cycle feasibility

Define product KPIs (General + MC)

Evaluate early production output

Assess customization and product concept feasibility

Product

Estimate manufacturing cost and time

Define assembly scheme and decoupling point

Simulate production system behaviour

Define modules and parts geometry and tolerances

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STO

MER

CO‐D

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