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Industry 5.0 and mass customisation: the future of production

This second blog post in the Industry 5.0 series dives into the role Industry 5.0 and technology play in this new era of mass customisation, the shift from mass production into mass customisation, and highlights its challenges and benefits for brands and the consumer.

Author:
Sofia Gonçalves
Industry 5.0 and mass customisation: the future of production

Nowadays, consumers are increasingly looking for products that can be personalised from start to finish; shoes, laptops, and even automobiles can be customised with a variety of colors, parts, and features. Industry 5.0 is driving industries from mass production to mass customisation, aiming to present customers with a product or a service that suits their needs.

What is mass customisation?

Mass customisation is a popular term nowadays, and it is indeed a very powerful business concept. Many brands are embracing it, as it is meant for both big companies small entrepreneurs who want to provide customers with a unique and personalised offer.

So what does this concept mean, exactly? Mass customisation is a manufacturing technique that allows companies to produce products that are tailored to the exact specifications of their customers.

Taking advantage of flexibility, integration, and personalisation to create custom-made items at near-mass production efficiency, it is possible to achieve a high level of mass production while lowering unit costs.

Customisation is being seen in high-end boutiques selling handcrafted items, and it's also spawning a whole new industry model where technology aids manufacturers in producing custom products at a cost and scale comparable to mass production. In a manufacturing company, for example, flexible manufacturing technology is used to modify and adjust output in response to demand. In spite of that, this technique is useful in many other sectors, such as marketing, call centers, and management.

As such, the present era focuses on creating a super-empowered customer that has a say in what their final product will look like, and mass customisation is on the rise.

From mass production to mass customisation

Before the industrial revolution, manufacturing was regarded as a craft, and because things tended to be somewhat expensive and specifically produced to satisfy the demands of a specific individual, access was confined largely to the upper class or aristocracy. Now, with the introduction of mass customisation and Industry 5.0, manufacturing can be done at scale, on-demand and is available for everyone.

The main concern in mass production is the quantity of products that are produced, especially when companies produce standardised and uniform products. As a result, there is no product modification to meet market demand fluctuations. Because of economies of scale, mass manufacturing helps businesses cut their production costs.

On the other hand, in mass customisation, the corporation focuses on differentiation: not only does the corporation use mass manufacturing, but it also distinguishes its output based on consumer preferences. As a result, businesses can charge a premium for their products while both saving money and increasing their profit margins.

Mass customisation has evolved as a technique that brings together the best of both the craft and mass manufacturing eras. Although mass customised items may still be produced in large quantities, each item may change somewhat depending on the needs and desires of the specific end consumer. And this could not be done without the technology that is leading industries from different sectors to the new industrial revolution: Industry 5.0.

RipeWhite - PlatformE's interface for product customisation/personalisation

The major role of Industry 5.0 in mass customisation

It is understood that Industry 5.0 encompasses a human centric approach, meaning that it places essential human needs and interests at the center of the manufacturing process, drifting away from a digital-driven development and toward a more human-centered and society-centric approach.

From this perspective alone, we can surely understand why Industry 5.0 is powering mass customisation. This new industry model understands human needs and desires as a priority, and that is exactly what mass customisation is: applying customers' wants and needs to the product suitable to meet those needs. However, there is more than meets the eye.

Information technology (IT) and automation are critical to mass customisation because they connect the customer's preferences to a manufacturing team's ability to build products based on those preferences. As such, customisation will be limited by the availability of technology to perform this customisation seamlessly. So, the better the technology, the better the customisation experience and process.

In the same line, companies have to ensure that customised products arrive fast to the final customer, without long lead times. With Industry 5.0 technology, it is possible to create a system that enables easy communication from all parts, to make sure that the full process is efficient, and the customer only needs to wait for their item as much as for a common product that is not available in stock.

Product customisation evolves greatly around new technology, like 3D product creation. This type of technology enables companies, like PlatformE, to create of digital twins, a digitally accurate representation of a real-life object, and facilitates the customisation process, as it allows customers to see alterations in a very realistic way, so they can visualise their final product. These premium digital tools enable the client to create their own item, feel the engagement, and enjoy the hyper-realistic experience with nothing more than a device and their imagination.

There are still some challenges to utilising mass customisation manufacturing...

Although consumers are now looking more and more for personalised products, and mass customisation brings real benefits for manufacturers, there are still many challenges to overcome.

Firstly, it is hard to accomplish mass customisation without an efficient supply chain. Yes, customers are willing to pay premium prices for customised products, but brands also have to minimise production costs, shorten lead times and still charge a reasonable price. So, supply chains must be efficient, and companies need to work with suppliers that can provide quality materials on the fly and that are flexible for customisation production.

Second, technology is always evolving, and this approach cannot be supported by outdated technology. With new technology, new rivals may arise, making the firm less competitive. And there are still many companies experiencing and implementing the advances that Industry 4.0 brought. As such, it can be difficult for companies to invest in new technology.

Also, dealing with product returns can be a problem. Usually, when a product is manufactured with customisation, it is unlikely that it will be returned. However, this is still a reality, and brands need to figure out what to do with returned goods that were made for that specific customer.

Finally, companies need to ensure that lead times for customised and personalised products are not too high. Since it is a complex system, it is important to come up with an efficient production line that ideally eliminates lead times.

But the benefits are very appealing!

Mass customisation is an appealing business approach that encompasses various benefits for manufacturers, customers, and even the environment.

Logically, one of the advantages of mass customisation is that it offers a unique product. Tailored products are inherently exclusive, and hardly another customer or even a competitor will have one that is the same.

Minimising excess inventory and eliminating waste are undoubtedly some of the biggest benefits of mass customisation. With mass customisation, companies don’t need to have stock to sell, as personalised and customised products are made-to-order, meaning that they are only produced when they are already sold. As such, inventory is not needed, and companies can sell on the fly.

With mass customisation, companies can offer products more satisfyingly. This gives customers the option of customising items to match their individual wants and desires, resulting in increased consumer engagement and brand loyalty. Customers will have a stronger relationship with your company if they feel that they got something worthwhile for their money, or something that matches their individuality.

Above all, for businesses to succeed, they must make fundamental and coordinated adjustments to their company functions. Mass customisation is not only about marketing and manufacturing; it's also about product research and development, supply networks, and technical infrastructure.

Mass customisation is undoubtedly the future of production, because customers are increasingly demanding more personalised products. Industry 5.0 is the core of this new era, applying innovations and technology to serve humans, allowing people to realize the basic human urge to express themselves. It is clear that only with technology brought by Industry 5.0 is it possible to make mass customisation a reality, but making these products requires what we call the human touch. And that is what Industry 5.0 is all about.

Read more: Industry 5.0: building a more sustainable human-centric and ethical industry

Get the e-book 5 Brands Profiting From Mass Customization (Free download)