In my last blog post I’ve written about problems and potential solutions for manufactures of bespoke products. In this post we will have a look at mass product manufacturers and their problems. So, if you are a mass producer of standard products, do you experience some of the following problems?
- You get a lot of competition from cheaper overseas suppliers with products of reasonable quality?
- Are many of your customers no longer prepared to pay the high premium for your better quality product?
- You get a lot of customer enquiries that want your products better tailored to their needs?
- Did you do some research into running smaller batches with more product variants? What would the consequences be? Did you find some of the following issues?
- You would have to have more variants on stock which would increase prices
- Chances are you still run out of stock with some variants and it could take too long until the production of that variant is scheduled again
- Because the processing time for the different variants is different at some of the workstations, there would sometimes be a built up of work in progress in front of some work stations, clogging up the shop floor
- You would still not be able to produce all the desired variants
- The percentage of variants you could still not produce is too high
- There will always a certain percentage of very individual versions for which the customer would be prepared to pay a premium
- Decreased productivity
- Or did you experience that already and encountered some of the problems above?
As a result of such a change some of your customers might be happy because they can now get a product that is close to what they need and are happy to pay a little more for it. Many others might not be happy at all, because they now have to pay even more for what they could get cheaper from competition, and others because they still can’t get what they really need.
Does it seem to you there is no way out of this because after all you are mass producer and producing bespoke products would mean lot of manual work? Really? Is there none in your field that starts doing business differently? Take a step back, google it and you might start developing ideas.
I remember a manufacturer of printed circuit boards. They would produce large batches of custom circuit boards, fit the components and solder the completed boards. However, quoting was a nightmare, because customers wanted to see a working prototype. To produce a few of those, they would have to set up the whole production line which could take a day or two, and then run the production of just a few units. This could only be done between to production batches, which sometimes would mean a wait of several weeks.
The way out for them was to install a smaller and simple production line that was better suited to run small batches as well.
This might not be the way out for you, but sometimes only a few upgrades to some of your machinery could make your production way more flexible. However, the way to mass customisation always starts with finding an efficient way to specify the bespoke products. In the long term, you will need that in electronic form, so your specifications can be converted to production data.
Would there be a way that your customers specify online? Could you build a specification process so that your customer happily specifies online and thus does some of the work? If the information provided that way is sufficient to calculate a price, then customers might be happy to go onto the system and play with the various options until they found the right compromise between their vision and what they can afford.
Those things could become very complex, so if one web developer tells you that this can’t be done, this might only mean the he can’t do it. In that case you would have to search around a bit to find someone able to do that.
To stay productive you might have to improve your production processes as well, so that the custom products still could be produced automatically. This might not mean to buy all new and shiny machinery, but just upgrade or replace some key machines to help reduce complexity for the workers. Sometimes not even that is needed for a start, all you need is better organisation of the work flow. This could mean better production papers or labels with barcodes so reporting progress back is easy. With a little bit more effort you could have them report back any issues they have, for example defects, and a system that promptly handles that.
Again you don’t need an expensive ERP system that forces you to work the way it is built and is complicated and hard to use anyway. And again not every web developer might know and understand what you need, meaning you have to find the right people to do the job and are happy to grow with you.