Flexibility and rigidity in custornization and build-to-order production

This paper deals with the efforts of firms to tailor their products to the needs of individual customers. The overall aim is to analyse the features of the evolving activity structures where customized offerings are created with 'near mass production efficiency'. The paper begins with a literature review outlining modularity and build-to-order production as key features of customizing. The empirical setting of the case study is Volvo Cars' activity structure for build-to-order production. This structure is compared with previous means of making products available. The conclusion of the study is that activity structures for build-to-order production require extensive coordination, exchange of information, and interaction across company boundaries. The analysis shows that these structures rely on flexibility in some dimensions, while in others they build on rigidity. The paper concludes with implications for suppliers regarding how to combine flexibility and rigidity in order to be able to customize at reasonable costs. (c) 2005 Elsevier Inc. All rights reserved.