Mass-Customization – Where Do You Fit In?

Wood-Plastic and Natural Fiber Composites 2007 was held this week at the Marriott Baltimore Waterfront Hotel in Maryland. Organized by Principia Partners, a strategy consulting firm in Exton, Pa., the conference drew manufacturers and professionals of the composite products industry from around the world. Prevalent topics included: mass customization, the green movement, value added logistics and the state of the industry. The role of distributors and dealers was discussed, as various manufacturers stressed the need for education and promotional tools to help move product from the supplier to the consumer.

Early sessions highlighted a mass customization trend the industry is currently witnessing. Consumers are beginning to weigh all their options and combine various manufacturers’ components in order to meet their specific needs and tastes. Manufacturers are predicting this trend will strengthen, so discussions included how various aspects of the supply chain will need to adjust.

“Outdoor living isn’t sold the same as decking,” Martin Grohman, the president of Correct Building Products LLC, announced in his session on Mass Customization and the Backyard. Composite products now include everything from decking and railings to fencing and furniture. “It’s every room of the house duplicated outside,” he explained.

But the customization movement may be one of opportunity for dealers and distributors. Products from various manufacturers can be matched up and assembled sometime between the suppliers and the jobsite.

“I think it’s a good thing,” Grohman says, addressing wholesalers. “You can be a part of the whole process—invent your own brands,” he suggests. “We [manufacturers] don’t have the resources to deliver a mass-customized product. You do.”

Some manufacturers will expand their offerings in order to keep customers from going elsewhere in search of certain items. Denby Snell, general manager for Elk Composite Building Products Inc. in Lenexa, Kan., says his company will often provide an incentive for dealers and distributors to encourage stocking more of its items and less of the competition’s. He says, often, one item is tossed in essentially at-cost, to encourage dealers to group product needs into one order, rather than mixing and matching from various manufacturers.

One way dealers can take advantage of their spot in the customization chain is by supplying their own design tools. Customers are choosing to preview their outdoor designs on programs that allow them to combine various elements. While individual manufacturers can offer websites that allow combinations of their own products, distributors and dealers have the opportunity to provide the same services, but utilizing several suppliers—offering even greater design options.

Manufacturers admit that inventory will be further complicated by this trend.

“How am I going to go about selling all of this stuff and where the hell am I going to put it all?” said Chris Terrels, vice president of Railing Dynamics Inc., while speculating dealers’ reactions. Terrels suggests the complication is inevitable. “You can’t carry just one or two types of railing. Consumers are demanding greater choices in the maintenance-free category,” he says. “You’ve got to give them those options.”

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