Advancements in technology have led to the rise in automation and ‘smart’ manufacturing. With the Internet and Digital services pervading every walk of life, there is a clear shift from standardization through mass manufacturing towards personalization through automation and smart manufacturing.
Powered by data, hyper-personalization combines curation with personalization to create customized user experiences specifically around individual customer wants/needs. Advances in digital technologies, in artificial intelligence (AI) and software intelligence, are enabling companies to take personalization to the next level by making products and services that are highly relevant to individual consumers.
Medtronic’s artificial pancreas devices system is currently under clinical trials for FDA approval. With an advanced algorithm (SmartGuard Hybrid Closed Loop technology) inside, this device automatically monitors the patient’s glucose levels and delivers patient-tailored insulin doses in people with diabetes.
New disruptive technologies like Big data and predictive analytics, cloud computing, the internet of things, design thinking, social media and yes, 3D printing too are transforming manufacturing.
According to McKinsey, Industry 4.0 “is the confluence of trends and technologies” which “promises to reshape the way things are made.” Companies today have access to large amounts of information from across the value chain, and can utilize the same to create unique, precise, personalized offerings, which can range from a private jet to a car!
With businesses becoming increasingly more customer-centric, the customer becomes the focal point of how manufacturing operations are engineered.
Take for example a private jet. The body of the aircraft is manufactured by the OEM, and is standard. The interiors of the private jet however are hyper-personalized to suit the buyer’s needs by companies specializing in aircraft ‘Completions’. Completions, hence, is an integral phase when it comes to luxury aircraft – it feeds on hyper-personalization. The options provided can vary from fancy boardrooms to hi-tech theatres with surround sound systems and even gold plated toilet fittings.
The good thing about these new disruptive technologies spawning the hyper-personalization trend is that it allows manufacturing to be as close to the customer as possible, thereby facilitating value addition in the same region/geography / county/city / community of the consumer.
With hyper-personalization, the quantum of indigenousness is very high. Hence, in hyper-personalized environments, consumption facilitates production or part of the production, in the same locality, and allows for inclusive growth. For example, the fetish for opulence or on the other hand, minimalist design is specific to a community or region and changes with culture, language etc. across geographies.
Take the case of the Tesla Model S - an electric car with 15 moving parts. When compared with the standard car with an internal combustion engine (and over 10X moving parts), the Tesla Model S is highly suited for hyper-personalization.
While the core sub-assemblies (a.k.a power train, battery system etc.) can be manufactured/assembled centrally and in a highly automated ‘smart’ factory, the subsequent assembly of aesthetic sub-assemblies (Interiors, headlights, taillights, entertainment systems etc.) can be done locally keeping in mind the regional preferences.
While Hyper-personalization commands a certain closeness with, and to the customer, Industry 4.0 is about automation and data exchange in manufacturing technologies which includes cyber-physical systems, IoT and Cloud computing. While Industry 4.0 creates asset intensive ‘Smart’ factories, it is local asset light hyper-personalized manufacturing/assembly that will spur inclusive growth.
Let’s take another example from inside a home. Most of us are still using a 21st century old vapor compression technology in our refrigerators. With the advent of new technologies like thermoelectric cooling and magnetocaloric cooling, we will soon have energy efficient options available.
Also, the voluminous nature of vapor compression systems meant that the fridge came with the storage cabinet. With the new technologies, one can couple the refrigeration system to a custom cabinet (designed locally with appropriate insulation).
This opens up a wide variety of options available for storing food, medicines and other stuff which require refrigeration. A doctor can even store his/her vaccines in a small refrigerated box inside his drawer.
The same technologies assume significance for other HVAC (heating, ventilation and air conditioning) systems in the consumer as well as industrial domains.
Hyper-personalized manufacturing and Industry 4.0 hold interesting implications for inclusive growth. Successful companies will be those which are capable to deeper customer intimacy, and which can respond to their customers’ requirements immediately.
Hyper-personalization allows Industry 4.0 to listen to consumers by analyzing information in public domain to create product offerings that are highly tailored to the requirements and needs of the consumers.
Like the case of a garment manufacturer who analyses the likes and dislikes of a particular group on social media to determine what sort of designs will work for a particular group in the future. Grey garments can be mass manufactured while the printing of colors, designs etc. can be hyper-personalized to the need of the individual/community.
Manufacturers through Industry 4.0 need to understand that operational excellence reaches far beyond product production, now more than ever before, thanks to the demands of discerning consumers for hyper-personalized experiences.
With customers at the core, hyper-personalized manufacturing will facilitate local add-ons for creating stickiness for the brand while fostering inclusive growth for the country/region of the consumer.
This is especially relevant for emerging markets as it will allow local companies to be part of a hi-tech global value chain thereby boosting their competitiveness and the overall national economy.
This blog first appeared on The World Economic Forum website