Customer preferences changed significantly since Henry Ford invented the Model-T and built a completely vertically integrated manufacturing facility making everything from iron, glass, rubber, and automobile. These days we can see a strong increase in the demand for customer orientation starting from the model, color fashion, and ending up with a product that is tailored to specific individual body shape and preference. And it is only a beginning. In the near future, we will see increased demand and competition among manufacturers to build individually configured products based on preference, body, and later on genetics and medical conditions. It took Apple a generation of AirPods to make them fit better different forms and shapes of ears.
While you can make a person label on your Tumi luggage and Apple AirPods, these are minor tweaks. Small manufacturing companies created many examples of successful small brands manufacturing custom products on a small scale. You can make it work on a small scale and significant effort. But the big changes will come when global big brands will be able to build fully customizable and individually configured products on the scale. Companies cannot do it without fundamental, coordinated changes across multiple business functions in manufacturing – sales and marketing, product planning and engineering, manufacturing, and supply chain.
Such transformation can be only done by bringing two factors together – an increased value to customers and control of the cost of customizations. The value of customization is obvious, but cost pressure is significant. It made me think about what technologies and products in engineering and manufacturing can make it possible.
1- Customer facing technologies
Communication with the customers is an absolutely necessary element to get mass customization right. It includes collecting information about customer data, usage as well as measuring and scanning. Ideally, manufacturers need to have geometrical, behavioral, personal, and other related customer information. The processes should include 3D scanning, monitoring existing product usages, social network, and online activity, personal information. Some of this information is hard to get and some others can be restricted by regulation and laws. But building the most accurate individual customer profile is what is needed.
2- Online product data modeling and BOM management
Product information is the foundation of mass customization support. Mass production schemas worked from a static BOMs of the product that changed very infrequently. It was a single product optimized for scale and profit on the scale. Mass configuration requires BOM and data representation of every single product, the way it built, what it includes. It requires connected to design, engineering, manufacturing, built, and maintenance information. Depending on the product, some of these elements can be more important and some of them can be less in focus. But knowledge about all these elements, managed in a connected way by multiple organizations of the value chain is essential. Most of BOM systems today are isolated old fashion databases of information and a bunch of Excel files. Connecting them together in the online system will be essential.
3- Pricing and cost controlling systems
Mass customization creates a unique set of requirements for costing models. While cost was always in focus on manufacturing, the velocity of these systems is a new thing. When every single product can be different and tailored to the needs of the customers, manufacturing companies need to have a full picture of cost, including transparency of suppliers and contractors. The last is not a simple thing to achieve as companies are unlikely to provide full transparency on their cost structures and related factors. Nevertheless, pricing and costing which relied on the online BOM and product configuration system I mentioned above is a foundation of efficient mass customization processes.
4- Customer facing system product configurators
User experience is critical when it comes to mass customization. There is a need to put special configurable user experience in front of customers. While a typical way to think about product configurator is a traditional car website or computer store, manufacturers will have to develop new user experience options. Some of them will be more traditional like selection and choices. Some others will include 3D scanning and other measurements to get a custom fit for the products. In some industries, product configurators will be invisible and rely on information about customer behavior, needs, and future genes and biological information.
5- Supply chain management and resource planning
The last, but absolutely critical element to support mass customization is to organize a global network of resources to make production on scale possible. Most of the current systems are optimized for scale to build the specific product(s). The supply chain for mass customization requires sophisticated connected systems to monitor and control production processes. It will rely on multiple processes happening in parallel to organize the production of components, prefabricated elements, including demand planning and customer information. Once organized, the system will learn within time and improve itself.
What is my conclusion?
Old siloed systems cannot be a foundation for mass customization at scale. These technologies are too old to be included and integrated into the modern mass customization production flow. To build a fully customizable product, there is a need to integrate multiple technologies such as customer services, BOM management, pricing, supply chain, and resource planning. Yet, all these technologies will become useless unless a fundamental product data modeling including a global bill of materials system capable to connect manufacturing companies into sustainable and economically valuable networks capable to produce custom projects on a scale as efficient as Henry Ford made his Model T. Just my thoughts…
Best, Oleg
Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network platform that manages product data and connects manufacturers and their supply chain networks.
