A collection of resources and commentary providing an introduction to supply chain management and related systems for students, practitioners, and anyone else interested in learning more about how to design, manufacture, transport, store, deliver, and manage products.
Sunday, November 16, 2014
Disruptive Technology: Creating Beneficial Shifts in the Supply-Chain Model
that all about?
For many the word disruptive evokes thoughts of chaos. However,
disruptive technology offers much more light to the manufacturing process. The
most significant contribution of disruptive technology is the mass
customization of products and services.
The title of disruptive is given to specific forms of
technology due to their ability to shift the current supply chain model. For
example, 3-D printing eliminates wait time for prototyping, which allows
companies to replace their traditional suppliers of specific parts.
For companies, the main goals are to locate manufacturing and innovation as
close to demand as possible to easier identify and meet local needs.Utilizing
disruptive technology allows companies to come closer to these goals.
For customers, these forms of technology allow consumers to
be “marketers and cocreators” allowing for the ultimate level of customization.
How do we get there:
In February 2014, McKinsey published, How technology can drive the next wave of mass customization,
detailing the requirements necessary to generate profit when customizing products.
“The first step is to identify opportunities for
customization that create value for the customer and are supported by smooth,
swift, and inexpensive transactions for both consumers and producers. The
second is achieving a manageable cost structure and cost level for the producer
even as manufacturing complexity increases.”
To expand on the first step, McKinsey details how to
customize a product. It must be known what components customers want to
configure, which options to offer, and how to price each option. Companies can
find out customer wants through various applications, such as: crowdsourcing
and virtual product creation websites.
Sounds great! But why
can this happen now?
McKinsey suggests that the time for profitable mass
customization may have finally arrived. Additionally, the generations that have
grown up with the Internet are more likely to demand personalized products.
What does disruptive
technology actually look like?
Disruptive technology includes (images provided below):
Online interactive product configurations
Why should I care?
3-D digital modeling can allow you, the customer, to receive
an actual prototype of your customized product in a shorter amount of time than
previously experienced. In turn, this will allow companies to test multiple
configurations reducing product-launch risk. Recommendation
engines reduce the usual risk of purchasing products that a customer has never
tried before by suggesting popular options.
These forms of technologies provide more pathways for the
creation of startups and small businesses. Companies can gain free marketing
from social media and create a more engaging customer experience through
product configuration sites. 3-D printing allows for companies to change their sourcing strategies by potentially manufacturing specific parts of products in-house.
I believe that disruptive technologies have the ability to increase
customer enjoyment and to allow smaller businesses to enter the market.
However, I must ask does the advancement of mass customization disrupt or
challenge our understanding of the risks created by variability in product manufacturing?
In this blog I have only scratched the surface of disruptive
technology. For more information read: http://www.mckinsey.com/insights/business_technology/disruptive_technologies