Customization Through Standardization : a study on Atlas Copco Tools & Assembly Systems’ market offer of fixtured tools to the motor vehicle industry

Abstract: Atlas Copco Tools & Assembly Systems (ACTA) is world leader in industrial tools and assembly systems for safety-critical joints. One of the products the company sells is fixtured nutrunners, mainly to the motor vehicle industry. The margins on these highly customized products have been decreasing – much depending on changes in the purchasing behavior of the automotive industry. Traditionally, the marketing of the fixtured nutrunners has been concentrated to the parts of the product instead of the final product. Today, there is a belief within the organization that many of the sold customized products could be replaced by more standardized applications. There is also a wish to turn the focus of the market offer from the parts towards the final application. These beliefs and wishes resulted in this thesis, with the purpose to propose a new market offer to increase profitability and give more customer benefits. To reach this purpose we started out with theoretical studies of several different areas. Among those was mass customization, a strategy that combines the benefits of mass production with those of customization. We also performed a prestudy at the headquarters of ACTA in Sickla and visited major customers in Sweden. Using our collected knowledge from the theoretical studies and the prestudy, we conducted an in-depth case study by interviewing customers and people working at ACTA, both in Sweden and in the USA, in order to analyze today’s situation. In the analysis, we found several problems with today’s offer. For instance, we found that similar products are solved with unique solutions, which has lead to poor cost control and has made it difficult for ACTA to assure the quality of the ordered products. A further problem is the poor sales support and the lack of traceability of sold systems, which reduces sales and leads to unnecessary special solutions. A problem linked to that is the difficulties in getting accurate and sufficient information from the customer, which leads to extra errors and a lot of extra work. To solve these problems, we recommend ACTA to implement a mass customization strategy. Of course, not all of ACTA’s products can be mass customized, but to a large extent it should be possible. To implement a mass customization strategy, we argue that ACTA should take three measures, namely design standard products, modularize the products, and implement a computerized configuration tool. We also suggest that the implementation of the new market offer should be done stepwise. With the proposed new market offer, we believe that ACTA can increase profitability in the area of fixtured nutrunners without losing the flexibility of the products.