Why society needs efficient customization
This is the first in a series of blog posts where I will outline why society needs efficient customization, and how it can be achieved.
The concept of mass production is a cornerstone of the industrial revolution and modern society. Engineers design a product and a manufacturing process reproduces large quantities of the product very efficiently at low cost. But although mass production has become extremely efficient, contributing to lifting a majority of the world population from poverty, it is in many ways not effective – it does not give us what we want.
In the consumer market, mass production results in enormous waste of products that are never sold, due to the difficulty of forecasting demand and competition. Moreover, excess supplies are heavily discounted and sold to customers who don’t need them and often end up rarely using them. This is not sustainable.
Joseph Pine and others have long claimed that the admired business models of the future will be based on mass customization, an efficient process of making what the customer needs when the customer is willing to pay for it. But this promise is elusive. So far it has been largely wishful thinking. A contributing reason is that customization is more complex than it seems. Complex processes are unpredictable and can therefore not be managed for efficiency.
In manufacturing for the B2B market, where the customer is an organization, there is often too much variation in customer needs and volumes are too low, so that customization is necessary. The equipment used in factories or infrastructure are typical examples. Products like that have always been customized. It would not be economical to meet the B2B demands with a few mass-produced variants – the waste would be too costly.
Although customization is necessary, few people in the B2B manufacturing organizations understand how to customize their products correctly, and different departments of the organization have different views on the problem. The customization process from inquiry to delivery is highly error prone and no one has the full picture of how it works.
Configuration software has been introduced for several decades to automate the customization processes. However, those software packages are not well understood. They merely automate the mess of manual customization, moving the bottleneck from one process to another. The complexity remains.
Customization does not inherently have to be complex. In principle, products can be designed to be customized in predefined parameters in a predictable and fully automated way. In principle, it is also possible to make rational decisions about the range of customizability, estimating its profitability.
But this requires that we understand the nature of the complexity of customization, and eliminate unnecessary complexity instead of hoping that it will disappear by automation.
The immediate driver for manufacturers is to reduce costs and risks while increasing revenues. But when we can make the dream of efficient customization a reality, the whole world will benefit. This is not just a matter of avoiding waste. We need a new green generation of products, and we need transparent processes of design, production, maintenance, and recycling to get improvements out to the market quickly.
In the next blog posts, I will discuss the nature of the complexity of customization and what to do about it.