商学研究論集

第20号　2004．2

Mass　Customization：Levels　of　Customization　and

　　　　　　　　　　　　　　　　　　　Operational　Capabilities

博士後期課程　商学専攻　2003年度入学

　　　　　　　臼　　井　　哲　　也

　　　　　　　　　　　　　　　　　　USUI，　Tetsuya

Introduction　and　Research　agenda

1．Levels　of　customization

　　1．1．MC　concept

　　1．2．　Levels　of　customization

2．Operational　capabilities

　　2．1．　Operational　capabilities

　　2．2．Operational　capabilities　in　MC　cases

3．Levels　of　customization　and　operational　capabilities

Conclusion

lntroduction　and　Research　Agenda

　　In　marketing　literatures，　researchers　have　suggested　that　firms　urge　to　develop　appropriate　ways　to

maintain　the　relationship　with　individual　customers　and　some　suggest　that　market　segments　have　been

increasingly　broken　down　into　smaller　portions　over　time．　Their　suggestions　are　based　on　the　notion

that　markets　and　customers　are　not　homogeneous　in　nature（Smith　1956，　Claycamp　and　Massy　1968，

Wind　1978，　Alderson　1983，　Kotler　1989）and　individual　uses　of　product／class／form／brand／options

have　been　found　to　differ　in　terms　of　customer’s　individual　preferences，　as　well　as　their　effective

responses　to　marketing　actions　of　firms（Kara　and　Kaynak　1997）．

　　To　describe　the　importance　of　getting　close　to　individual　customers，　the　various　concepts　or　terms

have　been　widely　introduced　in　the　last　two　decades，　such　as　mass　customization（Davis　1987，　Pine

1993，Pine　et　aL　1993，　Pine　et　aL　1995，　Gilmore　and　Pine　1997），　micro　marketing（Kotler　1989，

論文受付日　2003年10月2日　　掲載決定日　2003年11月19日

　　　　　　　　　　　　　　　　　　　　一315一

Hapoineu　1990，　Tedlow　1990），one　to　one　marketing（Peppers　and　Rogers　2000），and　relationship

marketing（Berry　1983，　Copulsky　and　Wolf　1991，　Shani　and　Chalasani　1992）．However，　these　emerg－

ing　concepts　or　terms　may　sound　completely　different　from　one　another，　the　idea　behind　these　con－

cepts　is　very　similar，　and　that　is　to　create　more　effective　and　ef且cient　ways　of　reaching　individual

costumers　in　order　to　satisfy　their　unique　needs　and　wants　in　the　best　way（Kara　and　Kaynak　1997）．

　　Among　these　emerging　concepts，　mass　customization（MC）is　identi五ed　as　the　bridge　that　links

wide　range　of　research　fields　including，　production　and　operations　management，　marketing，　logistics，

and　information　management．　MC　is　the　ability　of且rms　to　produce　and　deliver　individually　customized

products　or　services　through且exible　business　processes　in　high　volumes　and　at　reasonably　low　costs

（Siliveira　et　al．2001）．　Delivering　some　level　of　customized　products　or　services　from　individually

designed　single　item（high　level　of　customization）to　item　with　cosmetic　minor　changes（low　level　of

customization）is　assumed　to　become　the　best　way　to　satisfy　most　customer’s　speci五c　needs　and

desires，　however，　little　is　known　about　under　what　conditions　firm　choose　the　appropriate　levels　of　cus－

tomlzatlon．

　　Although　market　requirements　in　many　industries　have　been　shifted　more　toward　the　notion　of

customization1，　the　conventional　practice　of　MC　may　not　be　effective　for　all　industries　and　all　types　of

products　or　services　as　been　expected（Zinn　and　Bowersox　1988，　Duray　et　al．2000，　and　Duray　2002）．

In　the　consumer　product　markets，　employing　modular　production　and　postponing血nal　assemblies　in

order　to　individualize　the　configuration　of　product　and　service　are　not　only　the　way　to　satisfy　cus－

tomers．　Literatures　in　strategic　management　studies，　especially　those　that　focus　on　the　Japanese　au－

tomotive　industry，　suggest　that　continuous　investment　in　their　upstream　activities（e．g．　R＆Dand

supplier　relationship）enable　the且rm　to　sustain　the　distinctive　and　inimitable　capabilities　to　develop

highly　differentiated　products　with　competitiveness　in　the　market（Dyer　and　Ouchi　1993，　Dyer　1996a，

1996b，　Clark　and　Fujimoto　1997）．With　those　capabilities　that　focused　on　upstream　activities，　the且rm

may　market　one　standardized　product（or　product　line）for　their　segmented　markets　to　satisfy　cus－

tomers，　rather　than　not　to　implement　practices　of　product　customization（e．g．　high　level　of　product

customization）．It　is　important　task　that　identifying　differences　in　the　focus　of　operational　capabilities

between　one　emphases　on　customizing　product　configurations　for　individuals（high　level　of　customiza－

tion）and　the　other　emphases　on　developing　highly　distinctive　products　that　are　hardly　duplicated　for

the　segmented　market（10w　level　of　customization）in　the　same　streamline　of　research．

　　The　objective　of　this　article　is　to　explore　operational　capabilities　that　determine　firm’s　levels　of　cus一

1The　notion　that　the　variety　of　products　and　services　has　been　increasing　over　years　could　be　described　from

　different　perspectives　such　as　a　product　proliferation（Gupta　and　Srinivasan　1998）．

　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　－316一

Fig．1　Framework　for　Determinants　of　Levels　of　Customization

S廿ategic

Vision　of

the丘rm

Operati・nal

Capabdhties

Market

ReqUirements

　　　Levels　of

Customization

tomization．　Sustaining　close　relationships　with　customer　is　an　ultimate　objective　of　firms　that　sug9est－

ed　in　the　recent　marketing　literatures，　however，　the　ways　of　getting　close　to　customers　are　differ　from

且rm　to　firm　accordance　with　its　focus　of　operational　capabilities（Pine　1993，　Silveria　et　al．2001，　Usui

2003）．Figure　l　describes　the　relationship　between　levels　of　customization　and　operational　capabilities

of丘rms．　While　market　requirements　in　many　industries　have　been　shifted　more　toward　the　notion　of

customization（Pine　1993），difference　in　the　focus　of　operational　capabilities　of　firms　may　differ　even

when且rms　are　in　the　same　industry（e．g．　consumer　products　that　have　a　complex　product　architecture

and　production　process）．The　level　of　customization　that　once　selected　by　the且rm　is　not　unchanged　or

且xed　strategy，　it　have　to　be　reevaluated　to　seek　the　optimal　level　of　customization　over　time．　The　mar－

ket　experiments　may　require　the且rm　to　modify　its　operational　capabilities　and　further　strategic　vision

in　long－term　basis．

　　This　article　is　divided　into　three　sections．　In且rst　section，　the　classification　for　levels　of　customiza－

tion　is　discussed．　It　seems　to　come　to　the　agreement　among　researchers　that　high　level　of　customiza－

tion　requires　customization　activities　from　earlier　stage　of　the　value　chain　and　low　level　requires　activi・

ties　only　at　later　stage．　In　the　second　section，　operational　capabilities　in　conventional　practices　of　MC

are　identified　and　classified　through　intensive　literature　reviews　from　wide　range　of　academic丘elds．

Analysis　from　six　case　studies　in　MC　literatures　describes　how　operational　capabilities　enhance　the

system　abilities　to　deliver　customized　products　on　the　value　chain．　Then　in　third　section，　identified

operational　capabilities　of　MC　will　be　discussed　from　the　relational　aspects　with　levels　of　customiza－

tion．

一317一

1．　Levels　of　Customization

1．1．　Mass　Customization　Concept

　　Mass　customization（MC）was　conceptualized且rst　by　Davis（1987）and　was　further　elucidated　by

Pine（1993）．Since　Davis，　the　debate　of　MC　has　progressed　from　simple　future　outlooks　in　the　late

1980’s，to　identifying　the　relationship　between　highly　automated　production　systems　and　levels　of　cus－

tomization　in　the　mid　1990’s　to　today（Gilmore　and　Pine　1995，　Lampel　and　Mintzberg　1996，　Duray　et

al．2000）．MC　is　based　on　the　idea　of　tying　computer－based　information　systems　together　with　new

modes　of　operation　such　as且exible　manufacturing　and　just－in－time（JIT）production　and　then　using

those　linked　systems　to　make　it　possible　to　provide　each　customer　with　the　attractive，　tailor－made

benefits　of　the　pre・industrial　craft　era　at　the　low　cost　of　modem　production．

　　In　production　and　operations　management　literatures，　more　narrowly　and　speci且ed　practical　con－

cepts　have　been　de且ned．　Researchers　in　this且elds　de且ne　MC　as　a　system　that　uses　information　struc－

ture　and　cos亡一e伍cient　manufacturing　methods　of　mass　production　to　deliver　a　wide　range　of　products

and　services　that　meet　specific　needs　of　individual　customers　at　a　cost　near　that　of　mass－produced

items．（Hart　1995，　Duray　et　al．2000，　Duray　2002）．From　this　point　of　view，　MC　concept　is　a　systemic

idea　involving　all　aspects　of　product　sales，　development，　production，　and　delivery，　full－circle　from

the　customer　option　up　to　receiving　the丘nished　product（Siliveira　et　al．2001）．In　other　words，　one　of

the　main　focuses　of　MC　research　is　to　elucidate　the　mechanisms　that　how　the　production　system　and

other　functional　activities　on　the　value　chain　enable　firms　to　accomplish　to　deliver　customized　offerings

to　customers．　The　goal　of　MC　is　accomplishing　two　antimony　objectives　that且rms　offer　items

that　meet　with　specific　needs　of　individual　customer　effectively　and　maintains　its　cost　ef五ciency，

simultaneOuSly．

1．2．　Levels　of　Customization

　　As　it　is　generally　known，　the　word‘‘mass　customization”is　a　coined　word　of‘‘mass　production”and

‘‘モ浮唐狽盾高奄嘯≠狽奄盾氏@of　products（or　services）”．　First　factor‘‘mass”is　represented　as　mass　production　or

the　system　produce　items　based　on　high　volumes　production　cycle　for　relatively　a　larger　size　of　cus－

tomer　group．　In　the　microeconomic　sense，　as　more　amounts　of　a　standardized　item　produce　in　a　single

production　cycle，　less　the　unit　cost　of　item　could　be　achieved　linearly．　In　general，　the　main　benefit　of

mass　production　of　items　is　achieving　high　level　of　cost　e伍ciency　on　its　value　chain．　Modular

production2，0ne　of　the　crucial　solutions　for　achieving　cost　ethciency，　is　intensively　discussed　in　MC

2The　concept　of　modular　production　was　introduced　first　by　Starr（1965）．

　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　－318一

，

literatures（Pine　1993，　Duray　et　al．2000）．By　producing　standardized　modular　components　in　mass

production　basis　that　con且gure　product　itself，五rms　could　produce　customized　products　without

scarifying　economic　of　scale　in　production．　The　issue　is　how　the五rm　configures　and　delivers　indlvid－

ually　customized　products　by　combining　different　standardized　components．

　　Several　authors　propose　a　continuous　framework　upon　which　MC　may　occur　at　various　points　along

the　value　chain，　ranging　from　the　simple‘‘adaptation”of　delivered　products　by　customers　themselves，

up　to　the　total　customization　of　product　sale，　design，　fabrication，　assembly，　and　delivery．　Based　on　Si1－

veira’s　work，　table　1　summarizes　the　combination　of　different　MC　approaches（I　name　it　MC　models）

and　levels　of　customization．　Table　l　represents　levels　of　customization　on　one　axis　and　the　use　of

different　MC　models　on　the　other．　Here，　the　vertical　axis　dlstingulshes　levels　of　customization，　ranging

from　pure　customization　down　to　pure　standardization．　The　horizontal　axis　re且ects　those　different　MC

models　introduced　in　MC　literature．

　　According　to　table　1，　MC　can　occur　each　stage　along　the　value　chain，　ranging　from　the　simplest　cus－

tomization（lowest　level　of　customization）that　occurs　only　at　distribution　stage　by　individualizing

packageS　and　usages　of　products，　up　to　the　total　customization（highest　level　of　customization）at　the

Table　1．　Levels　of　Customization　and　MC　Models

Generic　Levels Stages　of　MC MC　Approach MC　Strategies　　　　MCbonfigurations PIS　strategies

　　MC　Models

kevels　ofbustomization

　　Silveira?煤@al．（2001） Pine（1993）

Gilmore　andoine（1997）

Lampel　andlintzberg@　（1996）

　　Durayeta1．（2000） 　　Pagh　andbooper（1998）

High Design　　　Pure　　　　　　．■CUStOmlzat10n

Fabrication

Collaborative^Transparent

　　Tailared　　　　　　．，CUStOmlZat10n

Fabricators^Involvers

　　The　fulI

垂盾唐狽垂盾獅?高?獅

Assembly Modularoroduction

Customizaed唐狽≠獅р≠窒р奄嘯≠狽奄盾

The　manufactur－，1ng　Postponement

Additionalモ浮唐狽盾香@work

Point　of　delivery　　　　　　■，customlzatlon

　　Levels　ofbustomization

Additiona1　　　　◆　serVlces Customizedrervices

Modularizers^Assemblers

The　logistics垂盾唐狽垂盾獅?高?獅

Package　andр奄唐狽窒奄b浮狽奄盾

Cosmetic 　　Segmented唐狽≠獅р≠窒р奄嘯≠狽奄盾

UsageEmbedded　　　　　　レ　　　　　　　　幽CUStOmlZatlOn

Adaptive

LowStandardization 　　　　Pure

唐狽≠獅р≠窒р奄嘯≠狽奄盾

The　full唐垂?モ浮撃≠狽奄盾

＊MC　・＝　Mass　Customization

＊PIS；Postponment　and　Speculation

Source：Based　on　Silveira　et　aL（2000），pp．3

一319一

initial　stage　by　individualizing　product　design　itself．　Since　the　costs　of　customization　tends　to　increase

in　proportion　to　the　number　of　product　changes，　it　makes　sense　to　customize　the　downstream　functions

且rst（Lample　and　Mintzberg　1996，　p．25）。To　accomplish　higher　levels　of　customization，　the　firm　must

generate　its　customizing　activities　from　earlier　stage　of　the　value　chain，　in　contrast，　lower　levels　of　cus－

tomization　that　require　products　with　cosmetics　changes，　can　be　accomplished　only　at　later　stage　of　the

value　chain．

　　One　of　the　most　traditional　MC　models，　known　as　postponement　concept　introduced且rst　by　Alder－

son（1950），also　follow　this　relationship　between　levels　of　customization　and　points　of　value　chain

where　customizations　occur（Zinn　and　Bowersox　1988，　Pagh　and　Cooper　1998）．Alderson　stated　that

producer　should　add　options　or　make　differentiating　changes　to　the　product　close　to　the　time　of　pur－

chase　by　the　end－use　customer．　He　viewed　that　offering　product　options　to　end－use　customers　by

delaying且nal　production　process　until　customer　order　is　received　enable且rms　to　meet　with　customer

preferences　more　closely．　He　proposed　that　the　time　delay　of　distribution　and　final　production　process

could　be　one　of　the　critical　approaches　to　accomplish　product　customization．

　　When　the　firm　postpones　its　production，　they　take　risks　to　lose　some　customers　by　making　them

wait　longer．　Offering　product　options　to　customers　should　cause　to　be　delayed　the　processes　of　total

production　time．　Unlike　Alderson’s　perspective，　Bucklin　（1965）presented　the　framework　of

postponement・speculation　strategies；while　postponement　involves　delaying　value－adding　activities

until　a　customer　order　is　received，　speculation　involves　adding　value　before　the　order　received．　He　de－

fined　postponement　as　which　a　supplier　may　shift　risk　to　the　buyer　and　speculation　is　zero　postponed

production．　This　suggests　us　that　when　the　characteristic　of　product　can　be　added　the　most　critical

value　of　that　product　at　initial　stage　of　product　development　chain，　mass　production　can　be　an　optimal

option　for　firms　to　meet　with　customer　preferences，　rather　not　all　firms　and　businesses　have　to

postpone　their　productions．

　　This　common　agreement　on　the　relationship　between　levels　of　customization　and　MC　models　also

suggests　difference　in　the　focus　of　operational　capabilities　of　firms　re且ect　choice　of　appropriate　levels

of　customization．　The　capabilities　in　production　system　to　achieve　high　degree　of　production且exibili－

ties，　known　as　FMS　or　JIT，　have　been　defined　as　a　driver　for　delivering　customized　products　to　cus－

tomers．　The　point　of　customer　involvement（Duray　2002）or　the　focus　on　maintaining　relationships

with　end。customers　at　the　downstream　activities　may　be　identi五es　as　distinctive　capabilities　that　hard・

ly　to　imitate　by　competitors．　In　the　next　section，1　will　explore　operational　capabilities　of　MC　firms　that

may　affect　to　the　choice　of　customization　levels．

一320　一

2， Operational　capabilities

　　In　the　first　section，1　summarize　different　MC　aspects（MC　models）into　single　table　to　show　the

relationship　betWeen　levels　of　customization　and　points　of　customization　activities　on　value　chain．　The

sizable　MC　literatures　suggest　that　achieving　any　levels　of　customization　relies　heavily　on　the　firm’s

operational　capabilities．

2，1．　Operational　capabilities

　　In　strategic　management　literatures，　it　seems　to　come　the　agreement　among　researchers　that　sus。

tainable　competitive　advantage　of　firms　can　be　generated　through　continuous　development　of

resources　or　capabilities　of且rms　that　provide　the　values　to　customers（Werefelt　1984，　Barney　1991，

Peteraf　1993，　Day　1994）．While　the　competitive　forces　approach（Porter　1980，1985）have　put　empha・

sis　on　the　intensity　of　competition　in　the　industry　and　market　segment　that　determines　the　profit　poten－

tia1，　the　resource－based　approach　has　viewed　the　heterogeneousness　of丘rms　as　the　source　of　com－

petltlveness．

　　Although，　in　general，　the　resource・based　approach　in且rm　has　addressed　several　different　perspec－

tives；including　resource－based　view（Barney　1991，　Peteraf　1993，　Priem　and　Butler　2001），accumulat－

ed　assets（Dierickx　and　Cool　1989，　Amit　and　Schoemaker　1993），core　competence（Praharad　and

Hamel　1990，　Hamel　and　Praharad　1993），as　well　as　capabilities（Day　1994，　Collis　1994，　Chang　1995，

Gri伍th　and　Harvey　2001），the　main　objective　of　this　research　stream　is　to　describe　how　heterogenei－

ties　of　resources　and　processes　of　strategic　planning　in　firms　can　obtain　sustainable　competitive　advan－

tage　over　others　while　all　players　are　in　the　similar　environment（e．g．　in　the　industry　that　positioned　as

ahighly　pro趾able　one）．The　attributes　of　those　resources　or　capabilities　in且㎜s　are　characterized　as

cost－to－copy（Barney　1991，1999，　Peteraf　1993），and　more　over，　it　is　impossible　to　imitate　even　by　the

firm　that　generate　and　own　the　original　resource（known　as　the　causal　ambiguity　and　path　dependen－

cy）．

　　The　capabilities　of　a　firm　are　what　it　can　do　as　a　result　of　teams　of　resources　working　together　and　it

can　be　identified，　and　appraised　using　a　standard　functional　classi且cation　of　the五rm’s　activities（Grant

1991，Day　1994）．The　capabilities　can　be　distinguished　as　intangible　resources（Hal11992）from　con－

ventional　tangible　resources　such　as　plants，　physical　properties，　and　speci且c　equipments．　Because　the

capabilities　are　embedded　in　complexity　of　organizational　structure，　they　cannot　be　given　a　monetary

value　as　a　tangible　plant　and　equipment，　and　it　also　cannot　be　traded　or　imitated（Dierkx　and　Cool

1989，Hall　1992，　Day　1994）．

　　The　capabilities　that　embedded　in　organizational　routine　can　be　classi五ed　into　two　most　fundamental

一321一

Table　2．　Aframework　of　intangible　resources＆capability　differentials

CAPABILITY　DIFFERENTIALS

FUNCTIONAL CULTURAL POSITIONAL REGULATORY

SKILLSKnow－How　of：dmployee，　SupPliers，

浮cistributors

Perception　of　Quality，Ability　to　Leam，　etc．

ASSETSReputation，　Networks．

catabases．

Contracts，　Licenses，srade　Secrets，　Intellec－

狽浮≠戟@Property　Rights．

Source：Based　on　Hall（1992），pp．140

levels，　which　are　organizational　and　operational　capabilities（other　researchers　often　call　it　for　capabili・

ties　in　each　function）．According　to　Collis（1994，　p145），broadly　speaking　prior　definitions　of　capabili－

ties　can　be　classified　into　three　categories．　The　first　capabilities　he　defined　are　those　that　reflect　an

ability　to　perform　the　basic　functional　activities　of　the　firm，　such　as　plant　layout，　distribution　logistics，

and　marketing　campaigns，　more　ef五ciently　than　competitors．　The　second　and　third　categories　share

the　common　theme　of　dynamic　improvement　to　the　activities　of　the且rm．　These　require　firm　to　identify

the　value　of　other　resource　or　develop　novel　strategies　before　competitors　and　they　became　the　main

driver　for　product　and　process　innovations．　Hall　also　identifies　functional　capabilities　as　skills　along

with　value　chain　that　include　know－how　of　employee，　suppliers，　and　distributors　as　well　as　an　ability　to

learn（Table　2）．According　to　Hall，　capabilities　that　categorized　in　cultural，　positional，　and　regulatory

segments　are　related　with　the　organizational　routine　and　top　management　decisions　while　functional

skills　are　de且ned　as　the　capabilities　to　produce　and　deliver　the　apPropriate　products　or　services　to　cus－

tomers．

　　Although　researchers　tend　to　view‘organizationar　capabilities　as　social　embedded　or　corporate　cul－

tural　type　of　elements　in　the　firm　routines，　in　this　article，　I　de且ne　the‘operational’capabilities　of　MC　is

the　embedded　knowledge，　know－how，　or　abilities　in　each　functional　routine　on　its　value　chain　that　are

vertically　coordinated　one　another　to　produce　and　deliver　some　levels　of　customized　products　or　serv－

ices　to　customers．　Because　operational　capabilities　are　unique　to　the　firm，　it　can　be　assumed　that　differ－

ence　in　the　focus　of　operational　capabilities　among且rms　exist　even　they　face　to　the　similar（even　the

same）market　requirements。

2．2．　Operational　capabilities　in　MC　cases

　　There　is　a　flood　of　the　word‘‘mass　customization”in　various　areas　of　business　literatures　as　well　as

articles　in　business　magazines　and　related　sources．　Through　the　depth　review　of　related　sources　that

emphasize　on　MC　study　or　practice，　the　major　focuses（objectives）of　their　studies　and　MC　concepts

　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　－322一

Table　3．　MC　cases　and　some　focus　of　operational　capabilities

Case　1 Case　2 Case　3 Case　4 Case　5 Case　6

Authors（Year） 　　Kothai1995，1996）

Magrettai1998）

Feitzinger＆Lee（1997）Eastwoodi1996）

van　Hoek＆@　Weken@　（1998）

Industryiproduct　or　service）

Bicycle PC PC PrinterCellular

ohoneAutomotiveiSMART　car）

Fim1 NBIC 　　Dellモ盾高垂浮狽?

HP HP Motolora　　　MCCiMerchedes－@　SMH）

Levels　of　CustomizationRelativelygigher

Relatively

@HigherRelativelygigher

Relatively

@LowerRelatively

@LowerRelatively

@Lower

Product`rchitectureiHexibility）

Opened／Modularity Opened／Modularity Opened／Modularity Closed／Modularity Closed／Modularity

Closed／Modularity＆Integral

Supplierqelationship

Quasi－高≠窒汲?

Quasi－高≠窒汲?

Quasi－高≠窒汲?

Quasi－高≠窒汲?

Quasi－高≠窒汲?

Inter負rm／relational

Someeocuses　ofnperationalbapabilities

Channelqelationship

Relationa1Hierarchy，魔?窒狽奄モ≠戟@in・

狽?№窒≠狽?一 『

RelationalRelational／Hierarchy

Point　ofbustomerhnvolvement

Earlier Earlier Earlier Later Later Later

they　apply　as　well　as　industries　they　look　at　are　classified．3

　　To　identify　the　speci且c　operational　capabilities　of　MC，　I　focus　on　6　case　studies　that　describe　success

factors　of　MC　in　the　consumer　product　market4．　Table　3　summarizes　those　6　cases　from　5　articles　that

reveal　difference　in　focuses　of　operational　capabilities　in　each　function　as　well　as　activities　related　to

the　whole　value　chain．1　identify　four　differences　in　operational　capabilities　that　affect　the　choice　of　cus－

tOmiZatiOn　leVelS．

Product　architecture

　　The　product　architecture　relates　with　the　choice　of　levels　of　customization　and　further　structure　of

3This　original　literature　survey　is　conducted　by　using　two　popular　academic　online　journal　databases；include　the

　Proquest　and　the　Business　Premier　Research。　A　key　word‘mass　customization’provides　225　articles　and　the　final

　lists　are　prepared　by　deducting　non－academic　joumals（such　as　articles　from　magazine　or　news　sources）from

　first　results．　This　remains　64　articles　for　this　study．7articles　that　refereed　more　than　3　times　by　major　contribu－

　tors　in　MC　studies　are　added　on　the且nal　result，　This　original　distribution　of　those　71MC　articles　shows　that　arti－

　cles　are　distributed　in　different　research　fields；it　is　apProximately　19　percent　from　marketing　related　journals，24

　percent　from　strategic　management，33　percent　from　production　and　operations　management，　and　16　percent

　frorn　logistics．

4The　identi丘ed　71MC　articles　from　the　original　survey　include　ll　cases　in　g　industries．

一323一

its　value　chain．　Opened　product　architecture　is　created　when　the　interfaces　between　functional　compo－

nents　are　standardized　in　the　industry　and　specified　to　allow　to　the　substitutions　of　a　range　of　variations

in　components　into　the　product　architecture　without　requiring　changes　in　the　designs　of　other　compo－

nents（Sanchez　and　Mahoney　1996，　Schilling　2000）．Modular　production　is　most　familiar　example　of　o－

pened　product　architecture　modeL　PC，　for　example，　which　typically　allows　the　substitutions　of　varia－

tions　in　hard　disk　drive，　CPU，　memories，　monitors，　keyboards，　and　other　components　within　the　one

product　architecture．　Dell　computer　of正’ers　the　menu　of　different　combinations　of　PC　for　customers

（case　2）and　customers　of　NBIC（case　1）can　choose　from　about　eight　million　possible　variations　of　bi－

cycles　based　on　model　types，　color，　frame　size，　and　other　features（Kotha　1996）．

　　While　the　openness　of　product　architecture　is　expected　to　reduce　procurement　costs　of　components

since　it　is　standardized　in　the　industry，　nothing　exclusive　to　the　supplier，　modular　production　reduce

assembly　costs　for　customized　products　since　the　stnlcture　that　interconnect　with　other　components

allow　firms　to　easily　assemble　different　components　into　a　single　product．　The　opened／modular

product　architecture　enhances　the　ef五ciency　of　production　cost　in　MC（Pine　1993，　Hart　1996，　Gilmore

and　Pine　1997，　van　Hoek　and　Weken　1998，　Duray　2002）。

　　When　the且rm　chooses　its　product　architecture　to　be　opened（and　modularity），they　will　maintain

the　operational　capabilities　to　produce　and　deliver　the　products　by　assembling　different　standardized

components　into　a　single　customized　product　based　on　individual　customer　orders．　Such　capabilities

that　enable　firms　to　deliver　products　with　high　level　of　customization　are　not　easy　to　accomplished　or

duplicated　and　non－tradable。　In　NBIC　case，　Kotha　defines　long－term　investments　in　advanced－

manufacturing　technologies　and　human　resource　development　that　allow　implementing　MC　as　one　of

the　necessary　conditions　for　success．

SuPPIier　1～elationshiP

　　The　recent　literatures　in　strategic　management　suggest　that　interfrim（or　relational）governance　in

the　value　chain　is　expected　to　become　a　source　of　high　business　performance　generator（Dwyer，

Schurr，　and　Oh　1987，　Johnston　and　Lawrence　1988，　Dyer　1996a，1996b，　Dyer　and　Singh　1998）．Inter一

且rm　governance　is　defined　as　the　alternative　governance　structure　that　two　firms（e．g．　supplier　and

buyer）operate　their　transactions　and　business　development　through　being　a　relatively　longer－term　of

partnership．　Several　empirical　studies　support　that　cooperative　specialization　within　interfrim　relation－

ship　increases　productivity　of　resource　owners（Dyer　and　Singh　1998）and　the　costs　creating　and　ac－

quiring　resources　within　a　single　firm（and　vertically　integrated　organization）are　incurred　and　it　tends

to　avoid　those　costs　under　high　degree　of　uncertainty　of　demand　and　technological　changes．　This　per－

spective　assumes　the　emergence　of　interfirm　governance　occurs　when　firm　recognizes　the　effective－

　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　－324一

ness　of　creating　and　accumulating　resources　or　capabilities　with　the　partners，　rather　not　within　own　or－

ganization．　The　main　premise　of　this　perspective　is　that　firms　will　seek　to　reduce　uncertainty　and

manage　dependence　by　purposely　structuring　their　exchange　relationships　means　of　establishing　for－

mal　or　semiformal　links　with　other　firms．

　　In　the　empirical　settings，　the　most　relative　cases　for　valid　success　of　interfirm　relationship　are

Japanese　automotive　industry（Dyer　and　Ouchi　1993，　Dyer　1996a，1996b，　Clark　and　Fujimoto　1997，

Dyer　and　Singh　1998）．The　intensive　works　by　Dyer　theoretically　and　empirically　suggests　that

Japanese　automotive　value　chains　are　characterized　by　greater　inter五rm　asset　co－specialization　than

U．S．　chain　and　that　co－specialization　are　the　main　drivers　to　lead　firm’s　performance　such　as　product

quality，　speed　of　new　product　development，　and　inventory　cost（Dyer　1996a，1996b，　Dyer　and　Sigh

1998）．The　co－specialization　within　inter五rm　setting　he　defines　is　distinct　types　of　transaction・specific

investments，　includes　site，　physical，　human　and　dedicated　asset　specificity　that　originally　de丘ned　by

Williamson（1985）．Researchers　in　this且eld　assume　that　joint・investments　of　supPlier　and　manufac－

turer　will　generate　capabilities　that　lead　to　sustainable　competitive　advantages．

　　The　reviewed　MC　cases　do　not　emphase　on　those　joint－investments　within　inter且rm　setting；rather

their　relationships　are　maintained　through　market　transaction．　Because　there　can　be　hardly　found　one

time　discrete　market　transactions　between　components　suppliers　and　manufacturers，　firms　with　high

level　of　customization　tend　to　take　transactions　through　using　quai－market　that　characterized　as　a　less

tie　of　relationship　between五㎜s。　Ih　MC　cases，且rms　exchange　sales　and　order　related　information　with

their　suppliers　to　maintain　appropriate　level　of　inventory（Eastwood　1996，　Margretta　1998）；however，

relational　speci且c　investments　are　not　identified．　The　cases　show　that　firms　concentrate　on　maintain－

ing　the　discrete　relationships　with　several　different　suppliers，　not　having　a　concrete　relationship　with　a

single　supplier，　to　choose　the　best　supplier　possible　at　each　time　of　transaction．

Channel　relationship　and、Point（ゾα6ε勧zθ7伽oZηθ〃zent　　　　　　　　　圃

　　Unlike　the　supplier　relationship，　it　seems　that　developing　close　relationship　with　sales　channels　or

end　customers　can　be　de丘ned　as　the　one　of　the　critical　success　factors　for　implementing　customization．

In　some　cases，　the五㎜even　vertically　integrated　sales　channels　within　their　organization　to　built

direct　relationships　with　end－customers　because－all　product　customization　will　be　achieved　through

communications　with　customers．　In　order　to　deliver　customized　products　and　services，　maintaining

some　relational　links　with　customers　is　critical．　For　example，　Kotha’s　case　of　NBIC　stated　that　cus－

tomer　service，　appropriate　pricing，　and　extensive　communication　with　the　customer　are　all　integral

parts　of　NBIC’s　approach　to　MC（Kotha　1996，　p。448）．Magretta’s　case　of　Dell　computer（also　see　Dell

1999）describes　how　the　firm　develops　a　direct　customer　relationship．　In　the　interview　with　Michael

　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　－325一

Dell，　CEO　of　Dell，　he　spoke　up　that；there　are　so　many　information　links　between　us（Dell）and　our

customers．　Close　customer　relationships　have　allowed　us　to　dramatically　extend　the　value　we　deliver　to

our　customers．　We　have　developed　customized　intranet　sites　called　Premier　Pages　for　customers　and

beyond　the　mechanisms　we　have　for　sales　and　support，　we　have　set　up　a　number　of　forums　to　ensure

the　free　flow　of　information　with　the　customer　on　a　constant　basis（Magretta　1998，　p．79－80）．

3．　Levels　of　customization　and　operational　capabilities

　　The　main　objective　of　this　article　is　to　explore　the　relationship　between　levels　of　customization　and　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　「

operational　capabilities　that五rm　has　accumulated　or　enhanced　through　taking　their　own　historical

path．　It　is　important　task　that　identifying　differences　in　focus　of　operational　capabilities　of且rms　be・

tween　one　emphases　on　relatively　higher　level　of　customization　and　the　other　emphases　on　developing

highly　distinctive　products　that　are　hardly　duplicated　for　the　segmented　market（relatively　lower　level

of　customization）in　the　same　streamline　of　research．

　　One　of　the　most　popular　criticizes　against　MC　can　be　summarized　into　the　question　that　where　MC

really　occurs．　Indeed，　the　operational　capabilities　of　six　cases　I　reviewed　do　not　focus　on　long－term　in・

vestment　in　their　upstream　activities（e．g．　R＆Dand　supplier　relationship）．The　operational　capabili－

ties　of　those　firms　aim　to　develop　the　unique　product　and　process　technologies　with　partners；there－

fore，五rms　may　market　one　standardized　product（or　product　line）for　their　segmented　market　to　satis－

fy　customers，　rather　not　to　implement　practices　of　high　level　of　customization．

　　Table　4　shows　two　different　levels　of　customizatlon　in　the　MC　range．　It　can　be　assumed　that　there

are　almost　no　products　and　services　that　purely　customized　or　standardized　in　mass　production　based

consumer　market，　most　products　and　services　offered　by　firms　are　categorized　to　the　some　levels　of

MC　range　in　Table　4．

Table　4．　Difference　in　focus　of　operational　capabilities　in　MC

Some　Focuses　of Operational　Capabilities　in　MC

Levels of　Customization　　Focus　of

ualue　Added@Activities

　　Product`rchitecture

　Supplierqelationship

　　Point　of

bustomerhnvOlvement

　　Productbustomization

High 　　　　Purebustomization

　　　Massbustomization

Assembly，　sales≠獅п@post－sales

@　R＆Dandoroduct　design

Opened／Modular

blosed／Integra1

Quasi－market

qelational／Hierarchy

Earlier　Stage：@　Design／Fabrication

kater　Stage：

`ssembly／@　Delivery

　　Modulebomponentsbon負guration

bosmetics／Product　line

Low　　　　Purertandardization

一　326一

　　The　products　or　services　categorized　in　relatively　higher　level　of　customization　in　MC　tend　to　imple－

ment　the　conventional　practices　of　MC　that　discussed　in　MC　literatures　and　cases．　The　goal　of

manufacturing　strategy　of　firms　in　this　category　can　be　accomplished　through　product　flexibility　and

quick　responsiveness　to　customers（Davis　1987，　Pine　1993，　Kotha　1995）．

As　I　discuss　in　the　second　section，且ve　out　of　six　cases　in　MC　literatures　indicate　that丘㎜s　with

higher　level　of　customization　tend　to　use　the　opened／modular　product　architecture　and　discrete　trans－

actions　with　suppliers　within　quasi－market　or　typical　arms・length　relationship，　not　with　inter且rm

relationships．　In　addition，　those　firms　put　their　efR）rt　to　build　close　relationships　with　channel　members

and　end－customers　because　they　need　to　have　direct　communication　infrastructure　to　internalize

specific　needs　or　preferences　of　individual　customers　as　possible．　The　operational　capabilities　of　those

firms　are　focused　more　on　downstream　activities　of　its　value　chain，　including　assembly　of　modular

components，　close　channel　relationship，　and　sales／post－sales　functions，　than　upstream　activities．　In

this　type　of　MC，　the　main　value　for　their　customers　relies　on　the　operational　capabilities　of丘rms　to

offer　the　menu　of　customized　products　and　quickly　response　to　each　customer’s　order．

　　In　contrast，　sizable　literatures　from　strategic　management　fields　indicate　that　firms　apply　relatively

lower　level　of　customization（e．g．　product　line，　options，　cosmetic　minor　changes）tend　to　focus　more

on　upstream　activities　to　add　main　values　on　their　offerings　at　the　initial　stage．　Thus　the　offerings　of

且rms　are　standardized　within　a　narrow　range　of　features．　Upstream　activities　they　focused　on　are　R＆

Din　new　technologies　and　products，　interfirm　relationships　with　their　primary　supPliers．　The　major

difference　in　relationships　with　suppliers　is　whether　or　not　buyer　and　supplier　have　long－term　joint　in－

vestments　both　on　their　physical　assets　and　capabilities　that　speci且c　to　their　transactions，　not　with

other　partners．　The　continuous　face　to　face　communications　between　specific　partners　are　expected　to

lead　faster　product　development　cycle　and　higher　product　quality　standards．　When　these　capabilities

are　the　most　effective　drivers　for　sustainable　competitive　advantage　of　firms，　the　main　values　for　their

customers　are　the　operational　capabilities　to　develop　highly　differentiated　products　with　distinctive

narrow　range　of　features　that　customers　in　segmented　market　mostly　satisfy，　neither　offering　the　wide

variation　of　customization　nor　building　close　relationships　with　end－customers．

Conclusion

　　This　study’s　main　objective，　identifying　a　relationship　between　levels　of　customization　and　opera－

tional　capabilities　of　firm，　is　discussed　through　reviewing　literatures　from　conventional　MC　as　well　as

strategic　management　fields．　In　the　MC　literatures，　customizing　levels　of　customization　has　been　the

central　issue　of　MC　debate　for　the　last　decade，　however，　little　is　known　about　the　determinants　of　lev－

els　of　customization　in　the　consumer　product　market．　In　this　article，　I　focus　on　how　the　operational

　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　－327一

capabilities　of　firms　a｛fect　the　level　of　customization　and　MC　activities　on　the　overall　value　chain　of

且rms．　This　leads　two　types　of　MC　along　with　levels　of　customization，　While　one　type　of　MC　that　ap・

plies　relatively　higher　level　of　customization　focuses　on　downstream　activities　to　link　the　product且ex・

ibility　to　the　various　customer　inforrnation　of　preferences，　another　type　of　MC　that　applies　relatively

lower　level　of　customization　focuses　on　upstream　activities　to　enable　them　to　develop　highly　differen・

tiated　products　at　the　initial　stage　of　value　chain．

　　There　are　two　major　limitations　of　this　article　that　lead　future　research　agenda；1）dynamic　changes

in　levels　of　customizations　and　portfolio　management　and　2）difference　in　market　requirements　in　in－

dustries。　First，　this　anicle　excludes　the　aspect　how　dynamic　changes　of　levels　of　customization　affect

the五rm’s　plan　and　decision　making　process　for　future　capability　building．　Pagh　and　Cooper（1998）

suggests　that　the　stages　of　product　life　cycle　will　affect　on　the　decision　making　process　of　levels　of　cus－

tomization．　When　the　firm　has　products　with　different　levels　of　customization，　then　it　need　to　be　main－

tained　the　portfolio　management　approach　to　seek　the　optimal　levels　for　each　product．　Thus，　future

research，　it　will　be　required　to　argue　the　dynamism　of　improvement　of　MC　models　and　the　portfolio

management　for　different　levels　of　customized　products。

　　Second，　the　dif正brence　in　the　characteristics　of　products　and　industries　are　not　discussed　rigorously

enough　in　this　article．　I　address　several　consumer　products（e．g．　PC，　printer，　cellular　phone，　and　au－

tomotive）as　a’complex　product’．　Complex　product　industries　that　defined　here　as　industries　whose

production　process　involve　a　large　number　of　components，　functions，　and　process　steps（Clark　and

Fujimoto　1997）．The　major　differences　in　market　requirements　of　products　or　industries　must　be　con・

sidered　in　the　future　research．

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