Main image of Business Model of the Manufacturing Industry: Changed by Mass Customization

Business Model of the Manufacturing Industry: Changed by Mass Customization

It is no exaggeration to say that affluent lifestyles and the advanced society we have nowadays have been formed on industrial technologies that enable mass production. Modern industry has pursued mass production that borrows the power of machines. That has provided the means to realize lower costs and higher quality in advanced products. Even if products have the same specifications, the more that are produced, the lower the cost per product. Furthermore, the proficiency level of the production technique also rises. The application and market have expanded by refining the technologies to mass produce products – from consumer electronics, automobiles, and semiconductors to capacitors and other electronic parts and the materials that comprise those.

What is mass customization that efficiently makes one-of-a-kind products needed by consumers?

Nevertheless, attention has been focused in recent years on a new production structure called "mass customization" to individually make industrial products with the specifications needed by individual consumers efficiently one by one (Fig. 1). This new form of making things can only be realized because of smart factories.

Image of Differences between small-mix mass production, variable-mix variable-lot production, and mass customization
Fig. 1: Differences between small-mix mass production, variable-mix variable-lot production, and mass customization

"One-of-a-kind" products are common among pottery and ornaments. This means that no two products have the same specifications. They are made with time and effort by craftsmen. These one-of-a-kind products have the value of literally being unique. However, they involve considerable cost to make. Therefore, they cannot be obtained by everyone. In addition, these products are made by hand. Therefore, stable production like with machines is also not possible. In contrast to this, mass customization aims to produce one-of-a-kind products at low cost and high quality by utilizing both production machine control technologies (operation technology: OT) and AI, big data analysis, and other information technologies (information technology: IT). This can be called an attempt to further pursue variable-mix variable-lot production.

Innovation of the business model brought about by mass customization

If mass customization can be achieved, it will become possible to produce products that perfectly fit consumer needs.

Products whose optimal specifications change greatly depending on differences in the preferences, physique, constitution, and character of individuals, as well as differences in their usage locations and times can be called the perfect application of mass customization. Specifically, these include the "products of the three industries" of foods, pharmaceuticals, and cosmetics; products worn by people such as clothing, shoes, and accessories; tools and implements used by craftsmen; jigs that support things with machine tools; and golf clubs and other tools.

Furthermore, it is possible to shift the business model in the manufacturing industry from selling things to providing services by developing and producing products that suit the needs of individuals. Consumers will become able to reliably obtain their ideal products instead of selecting and purchasing products close to their ideal from among those proposed. Therefore, it becomes a high-value-added business with a high degree of customer satisfaction.

Underlying technologies for the realization of mass customization are being lined up

Technologies and methodologies with a different approach from the development and production of industrial products so far have become necessary to realize mass customization. However, the technologies that are the essential elements to realize that – the digitization of customer needs, the automation of design and production conditions formulation, and the efficient individual making of developed products – are in the process of almost all being assembled (Fig. 2).

Image of Technologies to realize mass customization
Fig. 2: Technologies to realize mass customization

Information processing technologies that analogically infer and formulate the specifications of products to meet needs with AI and other technologies are advancing based on past sales and marketing data in the digitization of customer needs. Technologies that automatically design product shapes that suit the required specifications have also come to be put to practical use in aircraft and other fields requiring a high degree of reliability in the area of product design.

In addition, attempts to apply cyber-physical systems (CPS) are also proceeding as a technology that quickly and appropriately formulates production conditions according to the product specifications. It has now become possible to efficiently, individually make diverse products thanks to the progress of technologies that customize electronic functions with software and 3D printers and other technologies that can automatically produce things in various shapes based on design data.

Advanced cases of mass customization are already appearing

There are expectations for mass customization in the future. However, companies have already appeared that are putting customization into practice and developing business that provides new value to consumers.

A sporting goods manufacturer in Germany has started a service to deliver the perfect shoes with a lead time of just a few hours to several days. It is doing this through automation manufacturing with robots after data on the shape of the foot of the consumer is sent to its factory. This is a service that allows even ordinary consumers to obtain customized shoes equivalent to those for professional sports athletes. The company is realizing this service with capture technology that digitizes the shape of feet and technology that makes soles to suit the shape of the feet of users with 3D printers.

Moreover, a medical device manufacturer in the United States is selling mouthpiece orthodontic tools that perfectly fit each individual. It is a device that corrects teeth to a normal profile while replacing the mouthpiece with a shape that changes little by little at regular intervals. The tooth profile data is obtained with a 3D scanner and the necessary mouthpiece is automatically designed with 3D CAD based on that data. The mouthpiece with the required shape is then automatically processed by inputting the design data into a processing machine.

Mass customization is an important approach in changing the business model in the manufacturing industry from monozukuri (making things) to kotozukuri (making things happen). Efforts will no doubt be made in various industries in the future to revitalize businesses that are liable to stagnate with just the conventional approach that pursues the effect of mass production.

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