Research On Building Mass Customization Capability: Based On The Prospect Of External Learning

While having been making great contribution to the rapid economy development inChina, Chinese manufacturers are also facing a series of challenges due to domestic andinternational market changes brought by global financial crisis. It is the common concern ofnumerous entrepreneurs, scholars and government officials to maintain the competitivenessand sustainability of Chinese manufacturers under such background. Mass customizationhas been considered as one kind of effective manufacturing mode to respond to the rapidmarket changes as well as to improve the competitiveness, which may help themanufacturing firms to gain the competitive advantage. Mass customization is amanufacturing mode to fulfill the customization by the comprehensive utilization of massproduction, flexibility and advance manufacturing technology to the extent such as toachieve the cost, volumn and delivery comparable to those by mass production, and tocontinuously meet the customization needs of different customers by expanding the scopeof customization. It may foster the manufacturing firms to successfully implement masscustomization so as to gain competitive advantage, to reveal the path to building the masscustomization capability, i.e., the capability to fulfill the customization at the cost close tomass production with satisifaction in devlivery, cost control and volumn.The following viewpoint was upheld in this paper, that under the deficient endogenouscondition, the Chinese manufacturing firms ultimately gained the competitive advantagethrough capability building by mastering advance technology and management from themarket. Based on such understanding, by using empirical research, this paper attempted toanalyse the path to build the mass customization capability of Chinese manufacturing firmsfrom the perspective of external learning, and to investigate the influence on the masscustomization capability building caused by the firm’s stakeholders of customers, suppliersand competitors, so as to reveal the beneath mechanism to gain the competitive advantagefor Chinese manufacturing firms. Such study was sparse in current research literatures, andtherefore, this paper may enrich the relevant management theory as well as guidance to theimplementation of mass customization.The research design in the paper utilized theoretical study, case study and empirical research. The research model in the empirical research was based on the literature review intheoretical study and the twin cases in case study. The analysis unit in the empirical researchwas firm, and the data collection was conducted by questionnaire survey in manufacturingfirms in Pearl River Delta Area. A total of745questionnaires were distributed, of which204were usable. The final response rate was27.4%, while88%of informants held managerialpositions with title of general manager or department manager. Hypotheses as well as theconceptual model were tested then by SEM.The results indicated that:(1) external learning, either from customers, suppliers orcompetitors, had no significant direct effect on mass customization capability.(2)Customization knowledge utilization demonstrated a strong mediating role between thelearning routine from customers, suppliers as well as competitors to mass customizationcapability.(3) Production Process Improvement demonstrated a strong mediating rolebetween the learning routine from suppliers as well as competitors to mass customizationcapability.(4) The total effect on mass customization capability by suppliers andcompetitors showed minor difference, while the one by customers was much smallercomparing to that by suppliers and competitors.(5) Modularity had no direct effect on masscustomization. In addition, modularity had no significant direct effect on production processimprovement, though with certain significant direct effect on customization knowledgeutilization.(6) The control variables of size, year of setup, ownership, industry or marketpresented no significant moderating effect on mass customization capability.This study made several significant contributions to the current literatures in thefollowing ways.(1) A conceptual model was proposed and tested to link two importantorganizational learning strategy implementation means, the external learning and internallearning initiatives, with mass customization capability, which revealed the learning routineto build the mass customization capability.(2) The total effects on mass customizationcapability by external learning from customers, suppliers and competitors were empiricallytested, and the difference among them was carefully tested and distinguished.(3) By usingthe samples of Chinese manufacturing firms, the empirical research in this study made acomplement to the previous research in mass customization which tended to focus on firmsin mature markets in western and developed countries. Particularly, the result in this research may be referred for many Chinese OEM and ODM manufacturing firms asguidance to improve response to current turbulent market.(4) New insight into the relationbetween modularity and mass customization capability was provided based on empiricalevidence, which may enhance better understanding of the role played by modularity in theimplementation of mass customization. Such insight also enriched the resource-based view,knowledge-based view, and dynamic capability theory as well.