Challenges of Business Adminsitration in Mass Customization

  • Determining the optimum number and location of factories and distribution centers is a complex decision.
  • It requires balancing such factors as response time to a customer’s order, the marketing value of maintaining a local manufacturing presence, local-content rules, duties, transportation time and costs, local labor and occupancy costs, and the replication of fixed assets.
  • Centralized distribution networks – using one depot or warehouse to serve multiple regions – typically offer the advantage of low costs.
  • Decentralized networks, however, often allow a business to offer customers

improved service. By rethinking the design of the
supply network when redesigning products and
processes for mass customization, a company can
optimize costs and provide fast, effective service.

  • A company with many product options

benefits little from having many distribution
centers around the world if those centers perform
only the tasks of warehousing and distribution.

  • The investments in inventory required to support all the options would be enormous.

Read more in the Mass Customization at Hewlett Packard

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