Pradeep Khanna

Late Prof. Arun Kanda

Abstract

Today, the businesses worldwide are experiencing a common phenomenon - increasing uncertainty and unpredictability in the business environment (19). Mass manufacturing did very well in the initial phases to cater to the increasing demands. Later the emphasis shifted from producing in bulks to price, developing a new system called 'lean manufacturing' where the idea was to manufacture products with less of everything-less time to design and manufacture, less cost to store, handle and deliver and better quality approaching zero defect. We now are approaching an environment ofmass customization that requires a shiftfrom the current paradigm of economies of scale towards a new paradigm called economies ofscope. If a company wishes to stay competitive in future, it must accept new values such as 'agility'. Agility is a business wide capability that embraces organizational structures, information systems, manufacturing, logistic processes and in particular 'mindsets' (2). A key characteristic of an agile organization is flexibility. To achieve this, a learning organization is needed, where we can not survive by merely concentrating on technology alone, but must focus on organization, people and technology and the interrelationships among these three (11).

Keywords- mass customization, economy of scale, economy of scope,flexibility