Henry Ford has loomed large over the manufacturing industry for more than 100 years – and deservedly so. After all, this was a man who helped to develop the concepts of assembly lines and mass production, techniques that have remained vital in supply chain for over a century.
As the manufacturing industry has continued to evolve, so, too, have its processes. And while manufacturers continue to rely on assembly lines and mass production, the increasing demand for individualized products has created the need for businesses to digitize and transform their existing supply chain operations.
Innovative approaches enable product customization
Ninety percent of organizations believe their customers “value” or “strongly value” personalized products, according to a new SCM World research report, Individualized Products: The Burning Platform for Future Competitiveness.
As such, enterprises are aggressively exploring a variety of cutting-edge strategies and technologies to deliver product customization. Per SCM World survey results:
- 42% of respondents are employing product platforming
- 50% of businesses are evaluating or piloting digital supply chains
- 43% of companies are evaluating or piloting smart manufacturing
- 28% of organizations are piloting 3D printing
One enterprise that’s currently excelling in today’s dynamic new landscape of individualized products is Harley-Davidson.
Harley-Davidson revs its product customization engine
As the Great Recession of 2008 arrived, business at leading American motorcycle manufacturer Harley-Davidson was suffering. The company had lost 40% of its business and was facing the prospect of having to close down its principal production facility in York, Pennsylvania.
Aside from the obvious economic downturn, employees at Harley-Davidson chalked up the company’s shortcomings to what was once one of its strengths: its mass production and assembly line manufacturing processes. These had suddenly become a liability, resulting in an inability to meet rapidly changing customer fulfillment needs, specifically at its York facility.
In order to increase agility and responsiveness, enabling the company to better deliver customized products, Harley-Davidson initiated an ambitious transformation project at its York production plant. By adopting smart manufacturing techniques and embracing a more flexible digital supply chain approach, the organization would be able to churn out a bevy of individualized motorbikes at the facility.
Harley-Davidson’s plant modifications included:
- Implementing a single digital supply chain: The company transitioned from using multiple assembly lines, where motorcycles moved along a predetermined path, to a single multiple-model, digital supply chain, where bikes move on automated guide vehicles driven by planning needs, software, and automation.
- Connecting the facility via wireless networks: Every step of production at the York facility is now tracked and incorporated into a real-time performance management system. By making this information available to employees on large digital screens around the plant, desktop computers, or mobile devices, management and staff have greater plant-floor visibility, which enables everyone to make informed decisions in real time.
The results of this transformation have been undeniable. The new digital supply chain has shortened the planning cycle from “a 21-day fixed plan to a six-hour horizon” and increased flexibility and real-time scheduling capabilities to meet new individualized customer orders.
Most importantly, the adoption of smart manufacturing principles at Harley-Davidson’s York facility has reduced costs by 7%, increased employee productivity by 2.4%, and improved net margin by 19%.
What other companies win with individualized products?
While Harley-Davidson is a prime example of a company that has successfully digitized its operations, it’s certainly not the only organization that has adopted smart manufacturing techniques to enable product customization. In fact, a number of leading manufacturers, in a range of different industries, are transforming their existing supply chain operations to deliver customer value through individualization.
Automotive manufacturers BMW and Tesla employ innovative technologies to provide vehicle customization. Using a build-to-order approach, BMW enables customers to configure their own cars, choosing from 11 different models, 36 different body types, dozens of engine types, and limitless other options. Tesla is using cloud technology to “ship” products digitally rather than physically. Through this method, the company can provide updates to vehicle gauges, GPS, entertainment systems, and more. Fashion retailers such as Nike, Brooks Brothers, and Burberry enable customers to design their own footwear, suits, and trench coats, respectively.
Beverage company Coca-Cola allows consumers to create their own drinks, “mixing branded soda products with a number of additional flavors.” Under Armour and Babolat are implementing sensors into their products to improve individual athletic performance.
Under Armour has developed a sensor-enabled shirt that measures heart rate, metabolism, body position, and lung capacity. Babolat has created a tennis racquet that can monitor a player’s swing and provide tips on how to enhance that individual’s tennis game.
Even producers of food are delivering customized products. The Hershey Company and Barilla are researching 3D printing technology to individualize new forms of candy and unique shapes of pasta, respectively.
Five tips to begin delivering product customization
What separates leaders from laggards in the field of product customization is the ability to fulfill individualized orders rapidly and at a cheap operational cost. For organizations that aspire to achieve this, SCM World provides the following five recommendations:
- Realize your market is changing: Many customers today value individualized products. But before you embark on any transformation project to deliver product customization, you need to analyze how, exactly, your business could benefit your buyers by offering this capability.
- Review your product portfolio: Assess whether or not you have the flexibility to accommodate your customers’ desire for individualized products. You’ll need to expand your current capabilities in order to deliver product customization.
- Connect your products: The optimal way to individualize your products involves connecting them. This will give you unprecedented insight into how your customers currently use your products and how you can improve them through individualization.
- Reinvent yourself, don’t lose yourself: Providing individualized products will require you to adopt brand new business models. You might even consider creating a specific division that solely focuses on designing and manufacturing these customized products.
- Become a smarter organization: Offering individualized products will radically transform your organization. After all, it requires that you completely redesign your existing operational processes, from product design and supply chain to manufacturing and supplier management.
Live Business: The only option in today’s ever-evolving manufacturing industry
The future of manufacturing will continue to revolve around individualized products. Assembly lines and mass production will no longer suffice. To win in this brand new landscape, you must shun the technologies of yesteryear and embrace the innovations of today.
Digitizing your extended supply chain will enable your organization to run as a Live Business – one that has the ability to sense, respond, learn, adapt, and predict to create value in the moment. It will provide you with live, real-time insight into the data you need to accelerate decision making. It will give you the agility you need to pursue new business opportunities and quickly respond to customer demand.
Change isn’t easy, but transformation is necessary. Download “Individualized Products: The Burning Platform for Future Competitiveness” to explore how you can get started today.
This story originally appeared on SAP Business Trends.
Top image via Harley-Davidson