Supply Chain Online - Product and Process Design for Supply Chain Management

SCM106: Product and Process Design for Supply Chain Management

...A tool called conjoint analysis may be used to estimate the potential benefits from offering customization. Conjoint analysis refers to a method of evaluating consumer preferences by asking individuals to make choices between different sets of options. For example, an auto manufacturer could show consumers a series of paired car profiles with different prices and optional equipment, and for each pair, ask them to select which car they would prefer. The product profiles are carefully selected to help researchers identify consumer choices; sophisticated models analyze the choices consumers made, to identify which options are most important and how much consumers would be willing to pay for them. Provided the sample of consumers is representative of your target market, this information can help you determine what kinds of customization to offer, how to price it, and its expected impact on sales and market share.

Conjoint analysis would ask a series of questions similar to the above; for each pairing, the customer chooses one of the buttons based on how much they prefer choice A or choice B. As the customer makes choices between various prices and features, patterns of preferences emerge. These patterns can be used to place a value on customization of products (whether to offer choices, how many to offer, and what price to charge for each).

Mass customization may not be suitable for all products and markets, nor is every implementation a "win-win"...

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SCM106 Specifications

SCM106: Product and Process Design for Supply Chain Management
Rating:

4.3 / 5 (908 ratings)

Total Reading Time: Approx. 1 - 2 hours (for average readers)

Word Count: Approx. 10,600 words

Author: Dr. Warren H. Hausman
Professor of Management Science & Engineering, Stanford University

Certificate: Counts toward Fundamentals of Supply Chain Management

Datasheet: Download

Contents

Introduction; Component Commonality, Modularity, Modular vs. Integral Design
Universality
Framework for Costs and Benefits
Benefits of Design Changes
Benefits of Design Changes, Continued
Postponement: The HP Deskjet Printer
Postponement Costs and Benefits (Deskjet Printer, continued)
A Quick Estimate of Postponement Benefits from Reduced Inventories
Packaging Postponement
Postponement via Software
End-of-Life and New Product Situations
Process Design for Postponement
Mass Customization
Incentive Issues
Conclusions
Test Your Knowledge
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