This article originally appeared on the Harvard Business Review Blog Network.
Since at least the early ‘90s, we’ve been hearing that Mass Customization is going to change the consumer landscape, but by and large, we still buy manufactured goods the way we have since the middle of last century. With the exception of custom crafted luxury goods like bespoke tailored suits and mega-yachts, most of our purchases are still very standardized, and “customization” means picking the 256GB hard drive over the 128GB, or selecting the Sport Package for your new car. Physical product customizers such as Nike iD and Moto Maker have earned strong customer followings, but they’re still closer to “designed for me” than the “designed by me” experience we’ve been promised. Despite these failings, I believe that we’re finally at the cusp of a new era in product design, in which truly “designed by me” products will be available in a range of categories. Moreover, the most successful manufacturers of the next 10 years will be those who seize this opportunity before their competitors do.
The reason for this coming shift is a combination of three unprecedented developments. First, we’ve seen dramatic improvements in flexible automated fabrication, exemplified by innovations like Tesla Motors’ robot-heavy car factories and Nike’s revolutionary Flyknit process. Second, rising labor costs and stronger currency are reducing the appeal of high-volume Chinese manufacturing, and nudging more companies to move operations closer to their headquarters, or their customers. Third, the demand for more personalized experiences, nurtured by our highly customizable digital devices, is on the rise. Combine these three and you have a future in which companies can offer customers fine-grained control over their manufacturing output, and earn loyalty and competitive advantage in return.
Consider the very unexciting process of buying a washing machine. As with most major appliances, you do this out of necessity not desire, picking the best from a range of pretty-good options that fit your budget. But what if that changed? What if buying a washing machine was more like commissioning a couture gown? What if you could custom order the exact machine you wanted, designed to fit your narrow hallway closet or launder massive piles of baseball uniforms, with an interface as complex or simple as you like: a touchscreen, a dial, or maybe just a big red button marked WASH? What if you could have it installed and ready to use within a week? Would you pay more for this kind of customized experience? If you’re like the thousands of global consumers we’ve interviewed over the past few years, the answer is yes, provided the price premium isn’t too great and delivery times are short.
Nike no doubt had this willingness in mind when they reinvented shoe manufacturing in 2012 with their Flyknit line. In contrast to the labor-intensive cut-and-stitch process that has defined the athletic shoe industry for decades, Nike figured out how to knit one from the sole upward in one piece, using a single, highly configurable machine. The immediate advantage is a lighter, closer-fitting shoe that athletes love, but ultimately it’s the ease of doing short production runs that sets the process apart. When a unique one-off is barely more expensive than a mass-produced generic, shoppers get “enough multicolored variations to make a Missoni envious,” and Nike gets an instant classic, embraced by fashionistas from New York to London.
It also makes production more customizable and distributed: A recent Businessweek article predicts a store where customers can have their feet scanned and quickly receive shoes built to fit them and their style preferences exactly. And a FastCompany profile hints that Flyknit’s small footprint and low labor intensity could help Nike put more factories in more places, slashing time-to-market as well as import duties.
But what about “real” products, that rely on capital-intensive processes like metal stamping, injection molding and circuit board printing? For one answer, go to the former GM/Toyota factory in Fremont, California where Tesla Motors is building entire electric cars—from sheet metal to finished product—in just four days. The 10-year-old company only produces one vehicle at the moment, the Model S, but in a way that defies traditional inventory-based manufacturing.
By populating the factory with over 160 robots, programmed to perform tasks from welding and painting to seat installation, Tesla has fit its entire operation into a fraction of the plant’s total space, and reduced its dependence on outside vendors. This makes it possible to build similar factories in other parts of the world, closer to customer demand, something Tesla has already begun doing. It also lets them modify their manufacturing line in a matter of days, not months. So far, they’ve used this flexibility to improve efficiency and engineer their own electric-specific car designs, but it could easily be used to give future customers a level of control over their purchases that competitors cannot touch. Tesla’s announcement that they’ll begin production of a sub $40,000 car in the next few years, suggests they’ll soon be far more than a niche player.
This wouldn’t matter if consumers hadn’t developed a taste for customized products, but the explosion in popularity of smartphones and tablets has taken care of that. We’ve grown to love our digital devices because we can quickly make them entirely our own, simply by installing apps and adjusting settings. Unlike the electronics of the ‘80s and ‘90s, tablets and smartphones are platforms, not products: they invite us to tinker and modify until they’re just right, and customers find this incredibly seductive. The first manufacturers to offer a similar experience in a physical product will almost certainly transform their category.
Doing so will not be cheap or easy. Nike and Tesla have both sunk years of effort and millions of dollars into their new manufacturing methods, and anyone wishing to emulate their achievement in a different field will have to as well. But more than just time and money, the shift will take a new kind of thinking, that sees physical products as platforms too. The real design challenge won’t be coming up with a perfect object, but a perfect process: a reliable way of making thousands of variations on a product, quickly and accurately, and giving customers influence over the outcome at a fundamental level.
The tools to do this are already here. Besides the highly visible examples above, other technologies are conspiring to make fabrication more nimble, including low-cost, high-accuracy 3D printing, CNC milling and laser cutting. Once written off because they didn’t fit into the high volume world of offshore manufacturing, these processes are increasingly suited to a more automated future that prizes the flexibility of shorter runs over rock-bottom labor costs. 3D printing in particular has been a darling of the Maker movement for years, and while low-res processes like Fused Deposition Modeling have limited application in the manufacturing world, others show more promise. Laser Sintering, which works at higher resolutions in a wide range of materials, is already used by Space X (another Elon Musk venture) to quickly fabricate custom titanium parts for spacecraft, and the Energica electric motorcycle manufactured by Italy’s CRP Group features fairings 3D-printed out of a custom polymer called Windform, with results that rival carbon fiber for strength and lightness.
While this technology is getting us closer, and the consumer desire is certainly there, what we still don’t have is a broad understanding of how to design for a hyper-personalized future. The washing machine example raises immediate issues. How much leeway do customers get? How do you design a customization process to be satisfying as well as precise? How do you build customer preference into a product line, but maintain brand consistency? Designers in the digital world have been wrestling with these questions for years. In the physical world, we have some catching up to do.
It’s worth it though. You could even argue that we don’t have much of a choice. The combination of demand, speed and automated flexibility are pushing us quickly to a point where physical products will be held to the same expectations as digital ones. When armies of robots can craft a car from scratch in a few days, how soon until a built-to-order washing machine becomes the new normal?