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gy which hassupported some of the research projects carried outby the Instituto Nacional de Tecnologia on thesubject of this paper, and John Hill at the WarwickManufacturing Group, University of Warwick forhis help and guidance.expect more frequent changes and greatvariety at lower prices from industry. Thiscycle creates feedback that leads to a moreunpredictable and dynamic market, wheresmall changes in customer demands, thatcould previously be ignored, now must beseen as competitive opportunities rather thana threat.
Some analysts claim that a new kind ofproduct-based competition, labelled masscustomization, will supersede mass production
in the next few years (Pine, 1993). In thisnew market, industries will fight to offer themost suitable product to each one of theircustomers at the cost of a standard product.
In comparison to mass production, where thetarget is the “average” customer, in this kindof environment companies will have to createtighter links with the demand and quicklyadjust their production process and productdesigns according to the desires of their capriciousand heterogeneous customers. Theautomotive industry provides an interestingexample of these issues. Ford have been pursuingthe concept of a single global car for allmarkets. However, Toyota in their recentannual reports are recognizing that eachmarket requires an individually customizedvehicle. Toyota’s desire is to meet this presentchallenge (Toyota, 1996).
The movement towards customizationaffects the short-term demand in at least twoways. First, as each customer taken individuallyis offered the possibility of defining a
roader range of product attributes the matrixof possible product configurations becomeslarger and each point in that matrix ill correspond

 

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