Tuesday, February 26, 2013
Designed By You, Stiched By Us
The article, with the title Manufacturing Resource Productivity (McKinsey Quarterly), is assigned in week#7. The word “Productivity” isn’t that simple as it seems. While learning supply chain management and business process modeling concepts, I find that the productivity part is very much challenging, since there is always scope for improvement and most importantly there is no best process or practice. Sometimes, one needs to improve existing way or redesign new one, in order to enhance productivity. With today’s competitive market the real challenge for manufacturing industries is to decide what to do in order to improve productivity.
What it takes to manufacture the highly customizable product in accord with customer needs? Fan Bi had the idea of customizing shirts according to customer needs. His idea is distinguishable due to its Low to no inventory and inventory storage cost, due to saving of elimination of storefront and office are extra! Also, he offers customers the feeling of individuality, because when one stands out from crowd and thinks ‘Hey, I’m not using the same shirt as 1000’s of others have!’ makes great difference. Blank Label set a new model for custom made products ranging from shirts, nutrition bars, jewelry, chocolates and what not. Every such product has an excellent choice of options to choose from for consumer. It takes usually 4 weeks to ship this custom shirt anywhere on the globe. They are always ready to help their customers.
I think this strategy is solid because of two major reasons. One is of course customizability which is being offered to the consumer. Secondly it focuses on lean manufacturing. As we know lean production practice believes any resource which cannot add value for end customer is wasteful and should be considered for elimination. Recalling cradle to cradle model, I can relate this sew-as-you-go model going in direction of maintaining zero inventory whereas cradle to cradle model which focuses on using waste as resource for production. In Toyota production System (TPS) there are 7 types of wastes are assumed. In this example of sew-as-you-go model we are saving costs on inventory, over-processing (we are giving customer exactly as she wants it, no more, no less) and over production.
According to another enlightening video post by Wired Magazine, it is now possible for local vendors to get manufacturing services from major service providers. Now putting orders online and manufacturing products at small scale is possible for small businesses. It has huge significance on constant changing market of consumer preferences. Suppose consumer wants a product now and her needs change next time, then it makes no sense to maintain inventory for products which no one will buy in future. Instead by manufacturing in small quantity, manufacturers can focus on ever changing customer needs to implement lean production, and eliminate things which do not add value in product. Thus the increasing trend to manufacture products according to immediate needs of consumer is profitable for businesses and as well as consumer.
After analyzing these cases, I wonder how this model will be useful and will increase penetration in existing market on large scale. More or less Dell Inc. applies same principle in manufacturing computers according to customer orders. Looking in Dell’s example, this model seems very promising and it’s already helping to reduce costs with lean production.