Is Customization Fruitful in Industrialized Homebuilding Industry?

Abstract

The level of customization currently being built by U.S. industrialized homebuilders, including modular and manufactured homes producers, is characterized and the impacts of customization on plant operational performance, and employee and customer satisfaction are examined. To assess the current state of the industry, including the level of customization offered and operational performance, a large-scale survey of industrialized housing producers was conducted. Results revealed that in general, the operational performance of the surveyed homebuilders deteriorates with an increase in home customization. Producers that offer more customization tend to be less efficient in their use of manufacturing space and less efficient with their labor. Results also show that a higher level of customization leads to higher employee satisfaction (lower labor turnover) and leads to lower customer satisfaction. However, those producers that had active quality programs (e.g., continuous improvement) had higher customer satisfaction ratings. Therefore, industrialized housing manufacturers have not reached the ideal of mass customization (i.e., effectively managing the production complexities of customization) and are paying a price for offering more choices to their customers. Lessons learned from this study and mass customization enabling factors are discussed.