Have It Your Way

Mass customization is a popular trend in the business-to-business arena. Read how manufacturing and communications technology have allowed small companies to custom-tailor products.

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Mass customization has entered the business-to-business arena. With the right technology, even small companies can provide tailor-made goods and services affordably and fast

The product-development room at ChemStation, a $25-million company based in Dayton, Ohio, has the nerdy look of a high school chemistry lab. Bunsen burners, microscopes, and beakers full of rainbow-colored liquids crowd every square inch of the black countertops. But then there are what appear to be some very peculiar reagents: stacks of greasy train-engine parts, clouds of fluffy goose down, even gleaming piles of silver flutes. Kathy Hansen, a chemist, sits on a high stool in the midst of the clutter, applying droplets of a pale green fluid to one of the flutes. She wants to see if the customized detergent will clean the metal the way she hoped it would.

Hansen is one of three chemists employed by the 15-year-old industrial-detergent company to formulate cleaning products, one by one, for customers. Those customers run the gamut--everything from car-wash operations to the U.S. Air Force--and the concoctions Hansen and her colleagues come up with must be just as varied. Hence the wild backdrop: some customers actually send their cleaning problems to the lab to aid the chemists in their work.

Still, the chemists can't function alone. They must work closely with ChemStation's salespeople, who spend their time visiting customer sites to collect information about the various operations' cleaning needs. They must find out, for example, what kind of dirt customers are dealing with (say, mud in the case of a truck-cleaning service) and what properties--foamy or flat, gritty or smooth--they prefer in a soap.

All the information, from the lab and from the field, sits in a central customized database called the Tank Management System (TMS). The TMS is linked directly to both the lab and the company's 40 plants across the country, where computer-run machines invented by the company's CEO, George Homan, mix together each customer's special formula. The customer knows nothing about the flurry of communications between the lab and the salespeople or about the automation used to make its particular suds. All the customer knows is that ChemStation gives it exactly what it needs. And in turn, ChemStation has seen its profit margins soar to the double digits. "The money we've been able to save by doing things this way is mind-boggling," says Homan.

Mass customization, a popular trend in the area of consumer goods and services, is slowly making its way into the business-to-business arena. Even small companies like ChemStation are finding that with the latest in manufacturing and communications technology--everything from computer-aided design and manufacturing (CAD/CAM) equipment to actuarial software--they can provide customers with tailor-made goods and services as cheaply as, and in the same amount of time that it used to take to make, standardized ones.

While many dynamics are responsible for bringing mass customization to the business-to-business market, the one that stands out, says B. Joseph Pine II, author of Mass Customization: The New Frontier in Business Competition, is the total quality management (TQM) movement. "The TQM movement taught customers that they could get the quality they wanted at a price they wanted to pay," says Pine, "and this brought about a cross-industry snowball effect." In other words, customers started demanding the same attention they were getting in the consumer market in their business-to-business dealings. And little by little, companies started giving it to them in the way of special orders. Originally, of course, the cost and the manpower needed to whip up those special orders for the "masses" were prohibitive, says Pine. But then technology entered the picture.

Today small companies implement mass customization not necessarily in response to demanding customers but as a proactive business strategy. Many turn to it as a way to recapture market share in a mature industry. Others, like ChemStation, embrace it to increase margins. Still others use it to carve out a market niche. The payoffs can be great: it can allow companies to expand into new markets, to deepen customer relationships, and to gather valuable--and proprietary--customer information. Indeed, mass customization can make a company something a customer cannot do without.

Henry Fuignan implemented mass customization at Ross Controls, a manufacturer of pneumatic valves in Troy, Mich., for a simple reason: to turn the company around. When Duignan was brought in as chief operating officer, in 1986 (he has since retired), Ross was in a desperate state: the CEO had cancer, revenues were at an all-time low, and the company had more than $5 million in debt to pay with zero profit. "Nobody on the board of directors was under 150 years old," says Duignan. "You could hear the crackling of bones at the board meetings." But within six years of turning the company's plant in Lavonia, Ga., into a showcase of manufacturing technology, at a cost of $8 million, Ross had landed a $250-million client, and Duignan's mass-customization strategy had begun to pay off.

When salesman Dan Henman brought the client, Danly-Komatsu, into Ross/Flex, as the mass-customization program is known, he had his work cut out for him. For it is the salesperson who must act as the liaison between the customer and the company during the customization process.

First Henman met with the engineers of the Chicago-based press manufacturer to pick their brains about the project, asking questions about what pressure they wanted the valve system to operate at, what kind of lubricant they used on the presses, and so on. Then he and the engineers faxed schematics that met those criteria to the Ross/Flex engineers in Lavonia, who came up with a final design. Once it was approved, the Ross/Flex engineers turned to a CAD/CAM system from Intergraph, a 3-D modeling-and-manufacturing tool that they use both to design prototypes and to program the company's nine computer numerically controlled (CNC) multiaccess machining centers, which grind out the prototypes. The machining centers (five A-55 Plus machines from Leblond Makino and four MA-3's from Tsugami) are linked to the CAD/CAM system by a local area network.

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