09 April 2001

Experts agree: Mass customization is almost here

by Bob Felton

Flatter management, e-collaboration, and build to order are in the future.

A New Orleans magazine editor, writing for Debow's Review in 1853, extolled the virtues of a recently opened chair factory and marveled at its output:

In every department of this model factory we perceive indications of a thorough perception of the art of producing the largest representation of mercantile value at the smallest possible outlay of domestic means. The materials at the very doors cost almost nothing; the water power, never failing, works without wages; and the manual labor, costing even now as little as northern labor, may be cheaper than it can possibly be had for in any northern locality.

Chairs . . . are turned off by hundreds.

Today's manufacturing plants have the same preoccupation with cost as yesterday's and will continue to, but InTech's experts say churning out huge numbers of identical finished products will soon be the fast track to shuttered windows. Mass customization, they say, is about to take center stage.

Ever since Michael Dell figured out how to hook up the Internet to his production lines, consumers have been expecting the same convenience from everybody else. Renault has announced plans to deliver custom automobiles within 15 days after receipt of an order, beginning some time in 2002, and Levi's now accepts orders for custom-sewn blue jeans online. Ironically, new levels of point-and-click convenience may go hand in hand with a permanent contraction of manufacturing personnel and a sharp decline in the relative importance of manufacturing to the U.S. economy.

Management guru Peter Drucker predicted in a 1998 interview that manufacturing would undergo a change similar to agriculture. "By the year 2015 or 2020," he told Industry Week, "the volume of goods produced by traditional manufacturing worldwide will probably be at least twice what it is today. But in the U.S., employment in traditional manufacturing, already down to no more than one-sixth of the labor force, will have shrunk to no more than one-tenth. And the share of manufacturing in GDP, which is still around 15% or so, will have shrunk to 5% to 7%." More goods produced by fewer hands-as in agriculture, it's slick technology that is driving the coming changes.

It's how you say it

Making a traditional automobile purchase, for instance, requires sitting in a showroom for hours completing reams of paperwork. Then, the salesperson hands it all to a secretary, who breaks apart the forms and occasionally sends them where they belong. Months later, an automobile kind of like what you wanted arrives at the dealership. From placing the order to arranging the financing, though, there's practically nothing that can't be done digitally, and very soon the entire process will be handled by computers: Click that mouse, and the automobile manufacturer and all its suppliers will automatically begin choreographing the thousands of discrete steps that go into the manufacture of a unique, one-of-a-kind car.

Roddy Martin, marketing strategies research director for AMR Research, said he doesn't doubt that point-and-click purchase of customized durable goods such as automobiles is coming. "The biggest single challenge," he said, "is integration," or figuring out how to get everybody working from the same page. That is proceeding rapidly. Not only is production line instrumentation switching to Internet-based communications—hard wired and wireless, allowing rapid piping of data to wherever it's needed without proprietary barriers—but also industries are setting up exchanges to develop standards for intraindustry information exchange.

In this vision of the future, the production line becomes just another node on an ever-lengthening digital data stream. "I think," Martin said, "that what you will see in the future is that manufacturing becomes a smaller component of the business." That will have a corresponding effect on the engineers who keep the plants going. "The engineer of the future," Martin predicted, "is going to have to be more attuned to the overall system, including the business side."

Mass customization

Richard Morley, inventor of the programmable logic controller and co-author of The Technology Machine: How Manufacturing Will Work in the Year 2020, sees the future similarly. Like Martin, he foresees almost instantaneous delivery of highly customized products—and then some. "The word 'personal,' " he wrote, "will take on more applications: personal families, personal food designed to maximize custom diet needs, personal clothing [clothing sized to individual bodies and fabricated to personal climate and skin needs], personal [customer-designed] cars."

Another of his predictions is that "mass production will give way to fully distributed manufacturing and point-of-sale manufacturing. Mass production and its complex hierarchy of management structures enjoyed a 150-year run. Watch for industries that uncover the key to localized sourcing, design, and finally production and reconsumption of recyclable materials by the consumer, and his family, himself. Manufacturing will become replication at the point of consumption [and design]."

Mass customization is already the reality in pharmaceuticals, food, and beverages, according to Frank Smith, a spokesman for software developer Ortems. "This puts a much greater burden on production," Smith said, "to ensure that they can manage the increased complexity of production runs. For example, we have a client in the generic drug business, where wholesalers/ distributors/intermediaries serving market territories are placing orders in smaller batches, but batches with greater mix of packaging."

He explained the effect: "The option for generic drug makers is to build up larger finished good inventories to draw from or to streamline production—and the ability to schedule greater complexity, not merely on a weekly or daily basis but have the ability to schedule and reschedule within the shift."

Today, we see customized greeting cards printed at a kiosk. Tomorrow, thanks to modular components, we'll see assembly of a riding mower designed specifically for your lawn as you peruse the seed rack. Morley said his predictions are coming true "faster than I thought."

Automate everything

Engineers have the prospect of a different kind of workday, thanks to the automation of practically everything, and there will be fewer engineers at the plant, too. "Productivity enhancements and new organization structures," Morley predicted, "will reduce the number of engineers required to design products and support processes by 75%."

Drucker concurred. Speaking of the reorganization of the steel and pharmaceutical industries, he said, "Let me explain. What characterizes the minimill is the restructuring of the entire process around information. This, then, made possible a) total automation—the specs of the order program, the entire process, and b) the cut in the number of people employed by some 80% or more and their conversion from manual workers putting to work mostly brawn (and a little skill) into knowledge workers running an automated process through its controls."

John Eva with The Foxboro Co., contemplating the changes wrought by remote control, made a similar prediction: "When taken in the context that the costs of engineers are constantly increasing, the notion of increasing the productivity of engineers has attractive short-term gains but very soon reaches saturation and instead transitions into increasing costs. Therefore, the winning long-term strategy is to use fewer multidisciplined persons."

It isn't only the role of manufacturing that's going to change; the business of turning raw materials into useful stuff is going to change, too. Not only are production lines undergoing reengineering for integration with Internet-era reporting and information requirements, but the tools and materials are also changing.

Dennis Brandl with Sequencia said he believes that "in the next five years, we will see more use of Internet technologies to monitor, control, and manage production. Sensors will become even smarter, with full self-diagnostics, wireless communications, and self-healing control algorithms. The basic production process will remain the same, but we will start to see applications of microengineered materials using microengineering technologies. These will modify the microstructure of materials to obtain new desired characteristics. Even though the basic production process will remain the same, we will have fewer people in manufacturing—about 13% of the workforce—but with productivity 50% higher than today."

In 10 years, Brandl predicted, "factories of the future will be clean manufacturing facilities. We will leave behind the dirty and smoky factories of the past because dirt and smoke will destroy the micro- and nanomanufacturing processes."

With increased automation, the role of manufacturing personnel will shift to monitoring and optimizing production. "This," Brandl said, "will continue to put pressure on manufacturing personnel to be highly trained and qualified." Fifteen years from now, Brandl predicted, "rapid electronic exchange of product definition will be common, with automated tools to convert these to specific manufacturing instructions. Some high-tech factories will also have the ability to automatically reconfigure themselves for new products, changing production routes, control points, and sensor points for optimal production of the product."

Thanks to advances in microelectronics and optics, instruments are steadily growing smaller, more rugged, more accurate, and more talkative. The engineers of two decades from now can look forward to instantaneous, high-quality, stem-to-stern information about the processes under their control. Those processes will probably be far cleaner and safer than today, too, because the public demand for those shows no sign of abating.

Morley predicted that the use of metal components held together by nuts and bolts will decline and that injection-molded plastics will take their place—a prospect that, if he's right, means most contemporary production lines will have to be thrown away. IT