Giving customers "what they want." - mass customization - includes related article on mass customization - Daydreams - Technology and the CEO: Nightmares, Daydreams, Solutions

Chief Executive, The, Feb 15, 1998 by Christopher Elliott

Faced with mountains of data, in undated with technological gadgetry, confused by conflicting jargon, and humbled by obstinate terminals, it's hard to remember how much has changed so quickly - and how the options we're increasingly taking for granted were barely even fantasies yesterday. Here are some dreams come true.

One size never fit all at Haworth Inc:. Whether it meant fitting rare leather upholstery on a chair or cutting exotic marble for a desktop, customizing office furniture has always been the Poland, MI-based manufacturer's core business.

But that philosophy didn't always extend to Haworth's IT systems, according to its chief executive, Jerry Johanneson. "A good portion of our customization was done by brute muscle. We got to a point where we could continue customizing our products without any technology, but we had to ask ourselves if we could afford to do that," he says.

Its patchwork of mainframes didn't really help Haworth manage the resources in its 37 plants. Nor did it let managers allocate the time and raw materials required to customize the chairs, tables, and other accessories that needed assembly. The company could continue using the old system, but at a cost. As it grew, Haworth would have to hire more employees and open new factories.

Mass customization on Haworth's scale may sound appealing, yet little is known about what effect, if any, such projects have on IT departments. Will they require more technology - and possibly more hires? Will the benefits outweigh the expenses? Most important, is mass-customization really needed in the first place? In some businesses, notably information-related ones, mass customization is becoming a must. Others are carefully considering the pros and cons of tailoring their product or service before committing to a mass customization project.

"Executives are having a hard time sorting out the hope from the hype," says William Band, a managing partner for Andersen Consulting's customer relationship management practice in Boston. "Most senior executives are not that IT-oriented, but one thing they know: they've been burned before with promises of technology."

Haworth decided to scrap most of its mainframes in favor of an enterprise resource planning system (ERP) with what's known as a finite scheduler - a program that considers available materials, orders, and space, and then determines how machines can be used most efficiently. "The system makes it easy for us to work in a very complex business," says Johanneson. "It will shorten the amount of time it takes us to process an order. And it will give us a unique advantage."

It is that kind of advantage that Pillsbury was looking for - and found - in its own ERP, says its chief executive, Paul Walsh. In April, the Minneapolis-based company embarked on a two-year project to implement a system that, in effect "will break down barriers between departments." For example, now when a customer calls the shipping department and asks about the status of an order, he might get transferred to several different departments before getting the right answer. Shipping might have all the information about when a particular order was sent out, but it wouldn't be able to retrieve any details about a client's credit on its computers. The new ERP would change all that by linking various internal systems to a common platform.

"Soon, if a customer calls us to ask the status of the shipment, the representative will be able to answer any question - not just the one about his order," says Walsh. "It should make us more customer-friendly and far more efficient."

Pillsbury is customizing its service rather than its products. Other companies have tailored their actual products to clients, with positive results. Take Dun & Bradstreet's U.S. division, which delivers business-to-business credit, purchasing, and marketing information. Its lifeblood is a series of databases containing 11 million U.S. lousiness records - and mass customizing the information in the databases for users.

"Our products are built as a result of certain customer segment demands," says Andre Dahan, Dun & Bradstreet's president. For example, when a major hotel chain wanted to identify the number of florists its properties did business with, Dun & Bradstreet customized the information for the company by matching customer files to its own database. "We found they were buying $7.2 million in flowers per year from 1,900 suppliers," Dahan says. "The company concluded that they would reduce the number of suppliers and entered into more rigorous price negotiations with the suppliers it stayed with."

Dahan believes tailoring a service the way Dun & Bradstreet has is possible outside of his industry. "I think the most critical thing is to make sure the supply side and the demand side are tied together in any mass customization project," he says. "In other words, make sure a customized product is what your customers want."

His sentiments are echoed by customization guru Jeffrey P. Parker, founder of First Call and now chief executive for Corporate Communications Broadcast Network LLC in Boston. "The efficient use of resources is essential to mass customization," Parker notes. That's not just true for Parker's company, which creates customized investor-relations Web pages for corporations, but for businesses in general. "Otherwise," he warns, 'Tour customers will never get what they want."