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Operations Management in practice

JAPAN'S PERSONALIZED BIKE PRODUCTION

Does your bike fit you to a Would y0u like one that does? If you are willing to pay 20 to 30 percent more than you would pay for a mass-produced bike, you can get a Panasonic bike manufactured to exactly match your size weight  and color preference You can even get your bike within three weeks of your order (only two weeks if you visit Japan) This is accomplished via a process called the Panasonic Individual Customer System (PICS) which skillfully employs computers robots and a small factory workforce to make  models at the National Bicycle Industrial Company factory in Shikoku Japan The National Bicycle Industrial Company(NBIC) a subsidiary of electronics giant Mitsubishi  began making the bikes under the Panasonic brand in 1987 With the introduction of its personalized order system (OPS) for theJapanese market (PICS was developed for overseas sales) the firm gained international attention as a classic example of mass customization pronounce products to order in lot sizes of one The factory itself has 21 employees and a compute-raided design (CAD) system and is capable of producing  any of 8 million variations on 18 models of racing road  and mountain bikes in 199 color patterns for virtually any size person The PIC system works in the following way A customer visits a local Panasonic bicycle store and is measured or characteristics that a firm or its products mu t have in order to even be considered as a potential supplier or source. In Europe. for example the vast majority of companies today require that their vendor be ISO-9000 certified. (This certification ensures that a firm has documented all of its processes.) Thus ISO-9000 certification is an order-qualifier in Europe. In contrast most companies in the United States at this time are not ISO-9000 certified (those firms that are certified in the United States have done so primarily to do busies in Europe  As a consequence ISO-9000-certified companies in the United States use their certification as an order-winner  that is ISO-9000 certification distinguishes them as being better than their competition  Basically when very few firms offer a specific characteristic. such as high quality. customization or outstanding service. that characteristic can be defined as an order-winner. However over time. as more and more firms begin to offer that same enhancement the order  winner becomes an order-qualifier. In other words. it becomes the minimum acceptable level for all competitors. As a result the customer uses some other new enhancement or characteristic to make the final purchase. The shift of a product characteristic from being an order winner to an order-qualifier is show n in Exhibit 2.5. We have arbitrarily selected 50 percent to reprint the point at which an order-winner becomes an order-qualifier. as that is when the majority of firms provide a particular enhancement. or characteristics that a firm or its products mu t have in order to even be considered as a potential supplier or source. In Europe. for example the vast majority of companies today require that their vendor be ISO-9000 certified. (This certification ensures that a firm has documented all of its processes.) Thus ISO-9000 certification is an order-qualifier in Europe. In contrast most companies in the United States at this time are not ISO-9000 certified (those firms that are certified in the United States have done so primarily to do busines in Europe). As a consequence ISO-9000-certified companies in the United States use their certification as an order-winner that is ISO-9000 certification distinguishes them as being better than their competition). Basically when very few firms offer a specific characteristic. such as high quality. customization or outstanding service. that characteristic can be defined as an order-winner. However  over time. as more and more firms begin to offer that same enhancement the order winner becomes an order-qualifier. In other words. it becomes the minimum acceptable level for all competitors. As a result the customer uses some other new enhancement or characteristic to make the final purchase. The shift of a product characteristic from being an order winner to an order-qualifier is show n in Exhibit 2.5. We have arbitrarily selected 50 percent to reprint the point at which an order-winner becomes an order-qualifier. as that is when the majority of firms provide a particular enhancement. model in 90 minutes. One might ask why a customer must wait two to three weeks given that it takes less than three hours to make a custom model. According to the general manager of sales We could have made the time shorter but we want people to feel excited about   fairing for something special. To provide a more personal touch to mass customization  the factory is given the responsibility to communicate directly with the customer. Immediately after the factory receives the customers order  a personalized computer-generated drawing of the bicycle is mailed with a note thanking the customer for choosing the bike. This is followed up with a second personal note  three months late inquiring about the customer's satisfaction with the bicycle. Finally a bicycle birthday card" is sent to commemorate the first anniversary of the bicycle. NBIG is how contemplating extending the Panasonic system td all of its bicycle production while Mitsubishi is considering applying the concept to industrial machinery Source urech Kotha The National Bicycle Industrial Company: Implementing a Strategy of Mass-Customization  case study from the International University of Japan 1993; and Susan Offbeat Japan'§ New Personalized Production Fortune October

JAPAN'S PERSONALIZED BIKE PRODUCTION

JAPAN'S PERSONALIZED
BIKE PRODUCTION

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