Modularity in Three Dimensions: A Study of Mass Customization in the Dutch House Building Industry
Modularity is often considered as the major enabler of mass- customization. This paper introduces modularity in three business dimensions: products, processes and supply chains. The different aspects and opportunities of three-dimensional modularity are i
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Summary: Modularity is often considered as the major enabler of masscustomization. This paper introduces modularity in three business dimensions: products, processes and supply chains. The different aspects and opportunities of three-dimensional modularity are investigated in relation to successful masscustomization strategies. The central proposition of this paper is that a network of organizations will be more effective in pursuing a mass-customization strategy when all three dimensions are concurrently designed in a modular fashion. This proposition is validated within the Dutch house building industry, which is currently trying to mass-customize its products. In particular, we focus on an innovative project, called Dwelling on Demand, which is carried out in the city of Almere. This project is one of the first steps the Dutch housing indust1Y takes towards more customer-influence on a serial basis. It is concludedfrom this project that a concurrent design in all three dimensions often leads to better masscustomization peiformances, while it assures a better fit between serving the customers' requirements and the organizational nenvork stnlcture and capabilities. Keywords: mass-customization, modularity, business networks, building industry
1 Introduction This paper investigates the different aspects and opportunIties of modularity in interorganizational business networks, which are trying to achieve masscustomization effectively. Modularity is by many theorists and practitioners considered as the enabler of mass-customization (e.g. Pine 1993). Most attention in this respect is paid to modular design of products. We add two other business dimensions to this perspective: business processes and supply chains, together making up a three-dimensional modularity perspective. It is investigated whether
C. Rautenstrauch et al. (eds.), Moving into Mass Customization © Springer-Verlag Berlin Heidelberg 2002
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interorganizational business networks, which want to offer mass-customized products to their customers, do in fact modularize in these three dimensions. Do they not only modularize products, but modularize processes and supply chains as well? We try to find theoretical and empirical evidence of the analogy between the three dimensions of modularity. The central proposition in this paper is that an interorganizational network will be more effective in pursuing a mass-customization strategy when all three dimensions are concurrently designed in a modular fashion. The proposition is validated within the Dutch house building industry, which is currently trying to mass-customize its products. In particular we focus on an experimental project, called Dwelling on Demand!, which is carried out in a Dutch city called Almere. It is one of the first steps the Dutch housing industry takes towards more customerinfluence on a serial basis. It is an experiment to explore the organizational and technical difficulties belonging to such a mass-customization strategy. The paper is structured as follows. In the following section
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