The effects of mass customisation on productivity

Abstract

In the last two decades, demanding customers put manufacturing industries under the pressure of customised product orders. This market condition forced manufacturers to follow and adopt a customer-oriented philosophy. Therefore, some manufacturing industries began to change their business processes accordingly to actualise mass customisation systems. It can be inferred from this that such a big technical change must have a great impact on productivity. Therefore, this study aims to analyse the effects of the Mass Customisation (MC) concept on productivity. To measure the productivity change in the manufacturing industries of Turkey, the Two-Deflator Growth Accounting Approach is applied. In this frame, MC and Mass Production (MP) industries were compared according to their value-added, capital contribution, labour contribution and productivity. The findings contradict the current literature and imply that the price of customised products is higher. In this frame, to enhance productivity and lessen the price, some suggestions that are related to human quality upgrades and technical changes are provided.

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