Imagine you ran a company that lets customers specify whatever they want in your products – including using their own materials.
You’re probably thinking that the company has to be small and focused on artisanal products: custom jewelry, custom bicycles, etc., that lend themselves to catering to every whim of the customer. But there is a company that is neither small nor in it for the sake of art or lifestyle (read just enough money to make rent).
Lutron Electronics has built a manufacturing and services business based on customization. It began when founder Joel Spira invented the electronic light dimmer in the late ’50s. Today, it offers 17,000 products, all built around the concept of customer-driven customization.
Lutron can match any color – that Benjamin Moore Palladian blue you painted the nursery, say – and deliver a light switch cover to match. Its new motorized window shade products can incorporate custom fabrics sent in by customers.
The tension between order and chaos
In an interview with my colleague Stephanie Overby, Spira says that his company’s embrace of a profitable make-for-me model is governed by a constant tension between order and chaos, between standard modules and creativity in engineering, between costs and customization in production, and between customer satisfaction and information overload in sales. The chaos increases new business. The order boosts profitability.
4 practices to make customization work
Lutron focuses on four practices when customizing its products:
- Create common modular components across product lines. Of course, not every aspect of a Lutron product is customized – just the ones customers care about. The rest is built on common platforms that are shared.
- Make sure employees continuously interact with customers. Continuous interaction, through sales and service, helps Lutron figure out what parts of its products need to be customized.
- Widen the ranges of functions and features in new and old product lines. There’s a certain finality to customization in customers’ minds. They got it just the way they wanted it. But if the product suddenly does more than it used to, that sense of finality goes away and customers become more open to replacing it.
- Think ahead of customers. Most importantly, Lutron thinks about how customers might want to alter or improve a product before they begin producing it in order to create profitable processes for bespoke products.
Processes designed to anticipate
Early on in the product lifecycle, Lutron’s designers and engineers meet to brainstorm the kinds of individualization customers may want. For example, when Lutron decided to launch ultra-quiet, precision-controlled window treatments, it created a process for the automated window shades so that they could incorporate custom materials designated by the customer – a specific red fabric, for example – while still maintaining product quality. They created a “customer-supplied material process” so the company could accept and safely store the fabrics, some of which might be valuable or irreplaceable.
Don’t customize everything
Lutron still churns out mass produced products. Mass production will never die – at Lutron or anywhere else. But a complementary and profitable make-for-me model of manufacturing has sprung up alongside it.
Lutron’s model gives it a head start in the make-for-me future. We are witnessing the beginning of the democratization, decentralization, and hyper-personalization of manufacturing – just in time, just in place, and just for me. As a broad spectrum of customization emerges, from truly unique lots of one to the typical “list of options” model that exists today, companies will have to figure out where they fit – and fit profitably – on that continuum.
We recently interviewed other experts along with Lutron about where the make-for-me future is going. You can read our findings in the in-depth report The Make-for-Me Future.