The customization of products to meet individual consumer desires is playing an increasingly significant role. Modern technologies like 3D printing make it possible to highly customize products with minimal effort. Nowadays, even very small batch sizes can be produced without the need for time-consuming and costly modification of production facilities. This also has implications for logistics.
A ‘batch’ refers to the combined number of products or manufactured parts produced in a single uninterrupted operation. This could be 50,000 nails (batch size 50,000) or 100 wardrobes (batch size 100). The smallest possible batch size is batch size 1—the unique item in a custom-made production.
Before IT-driven processes entered production with Industry 4.0, small batch sizes in industrial production were associated with significant effort. Each individual step in the manufacturing process had to be adapted separately. To limit setup times and costs, producing large batches was the most cost-effective production method. This means that the optimal batch size—the quantity at which the production cost per unit is lowest—was always above 1.
Thanks to modern manufacturing methods, individual productions are now possible with minimal additional costs and waiting times. A comprehensive digitalization, automation, and process integration in manufacturing and the supply chain are prerequisites for economically producing the smallest batch sizes.
The production of personalized products within the framework and costs of mass production is known as mass customization. Experts view this as a sustainable trend: On one hand, personalized goods are increasingly demanded by consumers, and on the other hand, manufacturers see good opportunities in this field to promote customer loyalty.
Flexibility in production is a requirement for mass customization. This is not just about 3D printers, which may not be suitable for many product categories, such as clothing. For mass customization, a modular production method is ideal, where individual modules can be easily adjusted to customer preferences.
Customers are often directly involved in the design process through internet product configurators. Their individual preferences are transferred to the company's IT system and automatically implemented by the connected production facility.
Mass customization has led to personalized products in many areas, including clothing and sports items with personal design elements, custom sunglasses, puzzles with custom motifs, personalized chocolate with customizable printing, or customized cereal blends.
For logistics, mass customization means that the flexibility in production must be reflected in the flexibility of the supply chain.
Since the demand for tailored unique items is primarily handled through online commerce, mass customization supports the logistics business in the area of end-customer delivery. However, this won't significantly change this logistical B2C segment. It doesn't make a big difference whether a personalized or standard product is included in a shipment.
In the B2B realm, things take a different turn. Within a growing market for mass customization, logistics players become the trailblazers of personalization strategies for their B2B clientele. The role of Logistics 4.0 is to align with the needs and degree of customization set by Industry 4.0.
This achievement is only possible when supply chains adapt to process customer-specific products. Many companies are faced with increasingly intricate product portfolios, necessitating the provision of appropriate logistic services. Simultaneously, the same level of service quality and cost-effectiveness that applies to standard products should hold true for personalized ones.
To mutually enhance competitiveness, personalized products should intersect with tailored logistic services featuring multiple transportation and delivery options. Integrated management solutions for the supply chain are instrumental in ensuring short production and delivery times for personalized end products. For instance, actual material demands of manufacturers depend on the specific personalized products. To ensure a smooth flow in material supply, production, and delivery, data sharing between manufacturers and logisticians is essential, while also increasing transparency for supply chains.
Logistics witnesses an overarching trend of connecting involved stakeholders in logistical processes through cloud or blockchain solutions, as well as optimizing transport services via big data analysis and artificial intelligence (AI). This potential for innovation particularly pays off in the realm of flexible services for personalized products.
Modern production methods enable the customization of numerous products without the need to modify entire production facilities each time. And because there's high demand for personalized customizations, a wide product variety, and batch sizes as small as 1 are becoming the norm in Industry 4.0. Logistics providers must respond to the product variety of mass customization and changing demands with flexible services and advanced IT solutions. DHL Freight is excited to provide logistics services to its partners that are as tailored as the products themselves.
- What does batch size 1 mean?
A ‘batch’ is the combined quantity of products produced one after the other without interruption. The smallest possible batch size is batch size 1, meaning only one product is produced in a single manufacturing process.
- What is mass customization?
Mass customization or mass personalization is the production of personalized products within the framework and costs of mass production. Flexibility in production is a requirement.
- What impact does mass customization have on logistics?
Customer-specific products and complex product portfolios demand appropriate logistics services. Integrated IT management solutions for the supply chain are important to share data between manufacturers and logisticians and to create transparent supply chains.