Order Management in the Customization-Responsiveness Squeeze

ABSTRACT Make‐to‐order (MTO) products may be either customized or standard, and customization can occur either at the configuration or component level. Consequently, MTO production processes can be divided into three customization gestalts: non‐customizers, custom assemblers, and custom producers. I...

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Bibliographic Details
Published in:Decision sciences 2012-02, Vol.43 (1), p.173-206
Main Authors: Tenhiälä, Antti, Ketokivi, Mikko
Format: Article
Language:English
Subjects:
and Operations Management-Information Systems Interface
Assembly lines
Customization
Decision Support Systems
Empirical research
Field Studies
Make-to-order
Manufacturing-Sales Interface
Mass Customization
Modular Design
Order management
Production management
Production systems
Qualitative analysis
Quantitative analysis
Supply chain management
Supply chains
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Summary:ABSTRACT Make‐to‐order (MTO) products may be either customized or standard, and customization can occur either at the configuration or component level. Consequently, MTO production processes can be divided into three customization gestalts: non‐customizers, custom assemblers, and custom producers. In this article, we examine how the multilevel nature of customization affects order management in processes that produce complex MTO products. We first empirically validate the existence of the three customization gestalts and subsequently, analyze the order management challenges and solutions in each gestalt in a sample of 163 MTO production processes embedded in seven different supply chains. In the analyses, we follow a mixed‐methods approach, combining a quantitative survey with qualitative interview data. The results show that important contingencies make different order management practices effective in different gestalts. Further qualitative inquiry reveals that some seemingly old‐fashioned practices, such as available‐to‐promise verifications, are effective but commonly neglected in many organizations. The results also challenge some of the conventional wisdom about custom assembly (and indirectly, mass customization). For example, the systematic configuration management methods—conventionally associated with project business environments—appear to be equally important in custom assembly.
ISSN:0011-7315
1540-5915
DOI:10.1111/j.1540-5915.2011.00342.x