Economic Growth

Hyper-personalized manufacturing can drive inclusive growth – here's how

Employee work on the assembly line of the Nissan Micra at the Renault SA car factory in Flins, near Paris, France, February 23, 2017. REUTERS/Benoit Tessier - RTS100EL

Image: REUTERS/Benoit Tessier

Vittal Devarajan
Head, Marketing and Strategy, Engineering and Research and Development Services, HCL Technologies
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Advanced Manufacturing

This article is part of: Annual Meeting of the New Champions

Advancements in technology have led to the rise in automation and ‘smart’ manufacturing.

With the internet and digital services pervading every walk of life, there is a clear shift from standardization through mass manufacturing, towards personalization through automation and smart manufacturing.

Powered by data, hyper-personalization combines curation with personalization to create customized user experiences around individual customer wants and needs.

Advances in digital technologies, in artificial intelligence (AI) and software intelligence are enabling companies to take personalization to the next level by making products and services that are highly relevant to individual consumers.

Artificial pancreas

Medtronic’s artificial pancreas devices system is currently under clinical trials for FDA approval.

With an advanced algorithm (SmartGuard Hybrid Closed Loop technology) inside, this device automatically monitors a patient’s glucose levels and delivers patient-tailored insulin doses in people with diabetes.

New disruptive technologies like big data and predictive analytics, cloud computing, the internet of things, design thinking, social media and, yes, 3D printing, too, are transforming manufacturing.

According to McKinsey, Industry 4.0 “is the confluence of trends and technologies” which “promises to reshape the way things are made.”

Companies today have access to large amounts of information from across the value chain, and can utilize this to create unique, precise, personalized offerings.

Customer as focus

With businesses becoming increasingly more customer-centric, the customer becomes the focal point of how manufacturing operations are engineered.

Take for example a private jet.

The body of the aircraft is manufactured by the original equipment manufacturer (OEM), and is standard.

The interior of the private jet, however, are hyper-personalized to suit the buyer’s needs by companies specializing in aircraft ‘completions’.

Completions, therefore, is an integral phase when it comes to luxury aircraft – it feeds on hyper-personalization. The options provided can vary from fancy boardrooms to hi-tech theatres with surround-sound systems and even gold-plated toilet fittings.

The good thing about these new disruptive technologies spawning the hyper-personalization trend is that they allow manufacturing to be as close to the customer as possible, so allowing value addition in the same region, geography, county, city or community as the consumer.

Inclusive growth

Hence, in hyper-personalized environments, consumption facilitates production or part of the production, in the same locality, and allows for inclusive growth.

For example, the fetish for opulence, or, on the other hand, for minimalist design, are specific to a community, or region, and change with culture and language, etc.

Take the case of the Tesla Model S - an electric car with 15 moving parts. When compared with the standard car with an internal combustion engine (and over ten times as many moving parts), the Tesla Model S is highly suited for hyper-personalization.

While the core sub-assemblies (the power train, battery system, etc.) can be manufactured and assembled centrally and in a highly automated ‘smart’ factory, the subsequent assembly of aesthetic sub-assemblies (interiors, headlights, tail lights, entertainment systems, etc.) can be done locally keeping in mind regional preferences.

While hyper-personalization commands a certain closeness with, and to, the customer, Industry 4.0 is about automation and data exchange in manufacturing technologies, which includes cyber-physical systems, the internet of things, and cloud computing.

Local manufacturing

While Industry 4.0 creates asset intensive ‘smart’ factories, it is local, asset-light hyper- personalized manufacturing and assembly that will spur inclusive growth.

Let’s take another example from inside a home.

Most of us are still using two-century-old, vapour-compression technology in our refrigerators. With the advent of new technologies, like thermoelectric and magnetocaloric cooling, we will soon have energy-efficient options available.

Also, the voluminous nature of vapour compression systems meant that the fridge came with the storage cabinet. With the new technologies, one can couple the refrigeration system to a customized cabinet, which can be designed locally with appropriate insulation.

Have you read?

Personalized refrigeration

This opens up a wide variety of options for storing food, medicines and other stuff that requires refrigeration. A doctor can even store their vaccines in a small refrigerated box inside a drawer.

The same technologies assume significance for other heating, ventilation and air-conditioning (HVAC) systems in the consumer as well as industrial domains.

Hyper-personalized manufacturing, and Industry 4.0 hold interesting implications for inclusive growth.

Successful companies will be those that are able to deepen customer intimacy, and respond to their customers’ requirements immediately.

Hyper-personalization allows Industry 4.0 to listen to consumers by analysing information in the public domain and then create products that are highly tailored to the requirements and needs of consumers.

Like the case of a garment manufacturer who analyses the likes and dislikes of a particular group on social media to determine what sort of designs will work for a particular group in the future.

Discerning consumers

Grey garments can be mass manufactured, while the printing of colours, designs, etc., can be hyper-personalized to the needs of the individual or community.

Manufacturers through Industry 4.0 need to understand that operational excellence reaches far beyond product production now more than ever before, thanks to the demands of discerning consumers for hyper-personalized experiences.

With customers at the core, hyper-personalized manufacturing will facilitate local add-ons that create brand stickiness, while fostering inclusive growth for the country or region of the consumer.

This is especially relevant for emerging markets, as it will allow local companies to be part of a hi-tech, global value chain, thereby boosting their competitiveness and the overall national economy.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Economic GrowthManufacturing and Value Chains
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