Build-To-Order is not that easy. Adding volume flexibility to mass customization

A number of industries are facing the challenge of offering multiple choices to their customers and of adjusting to heavily seasonal demands. Sports equipment, gardening equipment, and personal mobility solutions such as scooters, just to mention a few, all require the manufacturer and its supply chain to contemporarily meet the requirements for mix flexibility and volume flexibility. Both mix flexibility and volume flexibility entail the reduction of a specific trade-off. Volume flexibility means that a company serves a widely varying marked demand without building too many inventories and without compromising its cost structure with excessive overheads. On the other side, mix-flexibility means that a company serves a widely heterogeneous demand while avoiding that the costs of product proliferation offset its profitability. Research has been studying product and mix flexibility for a long time, providing strategies and methods to cope with these two trade-offs. However, the issues related to the simultaneous pursuit of mix and volume flexibility have not been explored, neither by empirical nor by conceptual research. Being mix and volume flexibility the ultimate goals pursued by the so-called Build-To-Order strategies, the relevance of this research topic is becoming greater and greater for industry. The present paper reports the first findings of a longitudinal case study of a business unit of a Fortune 500 company which is engaging into a Build-To-Order strategy. By analyzing the problems related to the simultaneous pursuit of volume and mix flexibility we propose a model explaining how these two trade-offs can be simultaneously addressed. We then speculate about the compatibility of the techniques generally advocated to address either volume or mix flexibility, in the case these two trade-offs have to be jointly reduced.