Mass Customization can be seen as a specific production strategy, in which companies seek to supply the customers with highly customized products that are able to satisfy differentiated needs and wants of customers.
The benefits of mass customization for companies are two-fold. 1) Companies are able to supply customized products that satify specific customer needs. 2) Companies are able to postpone the final design characteristics of the product, to when the company exactly knows which features the customer wants.
Therefore, companies using a mass customization strategy are not only able to tailor their products to their customers, they also have the opportunity of not producing products with specific features not directly satisfying the customer's needs, which in the end might save costs for the company and the customer.
However, this strategy requires some strategic capabilities.
The different elements of the end products need to have a great degree of modularity, meaning that different components of the product can easily be incorporated or withdrawn from the final design of the products. Therefore, the design of the product must be very modular, and be easily configured by using different sets of modular components.
Likewise, the company needs to have a flexible production layout, in which customized parts can be effectively incorporated.
Furthermore, companies pursuing a mass customization strategy might need to have a very flexible base of suppliers, who are able to deliver differentiated components quickly, so that lead-times for the customized products are held to a minimum.
A very good example of a company benefitting from this mass customization strategy is the computer company DELL, who are able to quickly produce and supply highly customized products to customers on a global scale.