Traditionally, companies competed by either mass-producing a standardized productor offering customized products in small volumes. One of the current competitivechallenges for companies is the need to offer to customers a greater variety of productchoices of a traditionally standardized product. This is the challenge of flexibility. Forexample, Procter and Gamble offers 13 different product designs in the Pampers lineof diapers. Although diapers are a standardized product, the product designs are customizedto the different needs of customers, such as the age, sex, and stage of developmentof the child using the diaper.One example of flexibility is mass customization, which is the ability of a firm toproduce highly customized goods and services and to do it at the high volumes ofmass production.Mass customization requires designing flexible operations and usingdelayed product differentiation, also called postponement. This means keeping theproduct in generic form as long as possible and postponing completion of the productuntil specific customer preferences are known.
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