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Industry 5.0: The Bespoke Future of Production

The second post of the Industry 5.0 series dives into the shift from mass production into mass customization, and highlights its challenges and benefits.

Author:
Sofia Gonçalves
Industry 5.0: The Bespoke Future of Production

In 1909 trailblazing industrialist Henry Ford famously quipped “A customer can have a car painted any color he wants, so long as it’s black.” Thankfully, this unyielding attitude towards consumer preferences did not last long. As consumerism grew in the 20th century a variety of colors and patterns became standard for countless products. This shift occurred because customers demanded choices that reflected their unique style. Industry 5.0 is taking the concept to the next level by giving customers the ability to personalize an item from start to finish; shoes, laptops, and even automobiles (sorry, Henry) can be customised with a variety of colors, parts, and features. Industry 5.0 will transition industries from mass production to mass customization, aiming to present customers with a product or a service specifically tailored to them.

What is Mass Customization?

‍‍Mass customization is a term that is discussed often in Industry 5.0 circles, and that’s because it is an extremely powerful business concept. Many brands are embracing it because it’s a good fit for both big companies and small entrepreneurs alike. Any brand that seeks to provide customers with a unique and personalised version of their products will benefit from embracing mass customization. 

So, you may be asking, what qualifies as mass customization? Mass customization is a manufacturing technique that allows companies to create products that are tailored to the exact specifications of their customers. 

The upside of mass customization is that by 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. The customer gets exactly what they want while the company saves a bit on production costs. Everybody wins.

Considering those advantages, it’s no wonder that customization is appearing in high-end boutiques selling handcrafted items, and it's spawning a whole new industry model where technology helps manufacturers produce 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. This technique is also useful in many other sectors, including marketing, call centers, and management.

As a result, the current market is focused on creating a super-empowered customer that has a say in what their final product will look like, and as a natural result mass customization is on the rise.

From Mass Production to Mass Customization 

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 each individual buyer, access was confined largely to the upper class or aristocracy. The introduction of mass customization and Industry 5.0 will allow every customer to get treatment that was once reserved for nobility. Manufacturing can now be done at scale, on-demand, for every customer. As humble peasants ourselves, this is a welcome development.

One of the biggest downsides of mass production is the quantity of products that are produced, especially when companies produce standardised and uniform products. Through economies of scale mass manufacturing helps businesses cut their production costs, but without any ability to change course once massive orders have been created. In a worst-case scenario business can end up with mountains of unsold inventory. 

On the other hand, in mass customization, businesses focus on differentiation: a business not only uses mass manufacturing, but 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 customization has evolved as a technique that blends the best of both the craft and mass manufacturing eras. Although customized 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: you guessed it, Industry 5.0.

RipeWhite - PlatformE's interface for product customisation/personalisation

The Major Role of Industry 5.0 in Mass Customization

‍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 personal and society-centric approach. It’s surprisingly zen for an industrial revolution. 

This new industry model understands human needs and desires as a priority, and that is exactly what mass customization is: applying customers' wants and needs to create products suited to meeting those needs. It sounds easy, but the technology doing the real work behind the scenes just makes it look that way.

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

In the same vein, companies must ensure that customised products arrive quickly to the final customer, without long lead times. With Industry 5.0 technology it is possible to create a system that enables easy communication between all side to ensure that the entire process is efficient. If this is achieved the customer’s wait time for their order will be comparable to waiting for a restock of a typical mass-produced item.

Product customization has evolved alongside new technology, like 3D product creation. This type of technology enables companies, like PlatformE, to create digital twins, a digitally accurate representation of a real-life object. This facilitates the customization 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 engaged in the creation process, and enjoy the hyper-realistic experience with nothing more than a device and their imagination. By leveraging new technologies businesses can take the guesswork out of customer preferences and let consumers do the heavy lifting by designing everything to their personal specifications.

There Are Still Some Challenges to Utilising Mass Customization Manufacturing...

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

First, it is hard to accomplish mass customization without an efficient supply chain. Yes, customers are willing to pay premium prices for customized products, but brands also have to minimize 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 enough for customization 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 that are only now experiencing and implementing the advances of Industry 4.0. Therefore, it can be difficult for companies to invest in new technology. 

In addition, dealing with product returns can be a problem. Usually, when a product is manufactured with customization, it is unlikely that it will be returned. However, this is still a possibility, 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 excessively high. Since it is a complex system, it is important to come up with an efficient production line that ideally minimizes or eliminates lead times.

But the Benefits Are Very Appealing!

Of course, there are downsides to any business strategy, so let’s not get too gloomy. Mass customization is an appealing business approach despite these caveats because it presents a variety of benefits for manufacturers, customers, and even the environment. 

One of the obvious advantages of mass customization is that it offers a unique product. Tailored products are inherently exclusive, and few other customers or even competitors will have anything similar. Customers are extremely unlikely to accidentally wear the same outfit to a party as someone else if they personally designed their own outfit, so that’s one less worry. 

Minimising excess inventory and eliminating waste are undoubtedly some of the biggest benefits of mass customization. With mass customization, companies don’t need to build up stock to sell, as personalised and customised products are made-to-order, meaning that they are only produced when they have already been sold. As such, inventory is not needed, and companies can sell on the fly. Mother Earth breathes a sign of relief as less unsold product ends up in landfills.

With mass customization, companies can offer a more satisfying sales experience. When customers have the option of customising items to match their individual wants and desires, it will organically increase 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 represents their individuality. Let customers tell you what they want and rake in the goodwill by simply delivering it. 

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

Mass customization 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 human needs, allowing people to realize the basic human urge to express themselves. Clearly it is necessary to have a range of technologies relevant to Industry 5.0 to make mass customization a reality, but making these products also requires what we call ‘the human touch’. And that is what Industry 5.0 is really all about.

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

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