Customization around the world: challenges and solutions
Consumers all around the world are increasingly asking for products they can customize to express their personalities. In order to cater to this new demand, furniture manufacturers are transforming their manufacturing processes.
How furniture manufacturers are transforming their production processes for customization
The stakes are high: as no two orders are the same, companies must manage complex production planning. They also have to find out how to optimize cost per piece in order to maintain their margins. And that’s not all: they must train their workforce on new processes or hire new workers; they must anticipate customers’ expectations.
This report examines how millennials and contract clients lead manufacturers to intensify their customization endeavors. It also showed, through the analysis of product variants, that most companies are already deeply engaged in customization and many plan to continue expanding their customization offering.
Read this guide and discover:
- The main hurdles to customization for furniture manufacturing professionals;
- Why manufacturers from the US and China are the most committed to customization;
- How digitalization and automated cutting technology can be game-changers.
From mass production to mass customization: Discover the most efficient customization strategies
As the reign of standardized products is coming to an end, today’s furniture buyers have clearly communicated their desire for products they can customize to reflect their personalities. In order to satisfy this growing appetite for customization, furniture manufacturers are questioning their manufacturing processes and devising new product strategies.
To find out how companies are adapting to this challenging situation, we teamed up with the Centre for Industrial Studies (CSIL) to survey leading upholstered furniture manufacturers around the world. We disclosed a first set of insights resulting from this comprehensive study in a lite paper entitled Customization Around the World: Furniture Manufacturers Take Stock. This report examined how millennials and contract clients lead manufacturers to intensify their customization endeavors. It also showed, through the analysis of product variants, that most companies are already deeply engaged in customization and many plan to continue expanding their customization offering. All respondents to our survey affirmed that this transition from mass production to mass customization increases the level of complexity they must deal with. However, they also acknowledged that it brings numerous opportunities. “From the production side, customization is difficult to manage but, from the marketing standpoint, customization is the future of the furniture industry”, insists a furniture manufacturing professional in Vietnam.
We will begin by investigating the main hurdles mentioned by the respondents to our survey. We will also see whether the commitment to customization is similar across all regions of the world. To conclude, we will analyze the solutions and strategies that manufacturers can carry out to succeed throughout their customization journey.
The commitment to customization of furniture manufacturers
American companies are currently providing the largest number of product variants (5.8 on average) and they seem determined to widen the gap. Almost 70% of the survey respondents located in North America plan to increase the number of options they offer. “We want to offer an even wider variety of custom options in order to meet our retail partner and customers’ needs. Every future investment will serve to achieve this goal,” states an American furniture manufacturing professional. In the US, millennials, a significant part of the furniture buying market, represent the dominant force for customization in the marketplace. This situation explains why local companies are so eager to go further into customization2. It is also important to keep in mind that import penetration (currently at 39%) is growing steadily in the US. In this context, expanding the degree of customization provides a powerful source of competitive advantage and value creation for American companies trying to succeed in a commoditized market.
As China’s economy continues to mature, its consumers are developing higher expectations for products and services. Moreover, Chinese millennials, who account for 30% of the population, place a high value on customization. No wonder that more than 60% of Chinese respondents to our survey indicated that they plan to offer more product variants. “We think that customization represented about 20% of our total sales over the past five years. In the future, we expect that it will increase to 50% on the domestic market,” reports a Chinese furniture executive.
Only 47% of the Western European companies we surveyed plan to increase the number of variants they offer. There are two major explanations for this cautiousness. First, Western European manufacturers introduced customization into their production earlier than their Asian counterparts and their customization offer is already quite significant (they provide 5.6 product variants on average compared to 3.9 for Asian companies). Besides, these companies evolve in less buoyant economies. Western Europe has been, by far, the region with the slowest growth of upholstered furniture production over the last five years. Many manufacturers in Eastern Europe are addressing the Western European market. It is probably the reason why they seem less eager than American or Chinese companies to increase their customization offer. When asked if they planned to increase the number of product variants they provide, only 50% of the Eastern Europeans respondents to our survey answered in the affirmative.