Magazine Summer 2017 Issue Frontiers Research Highlight

Supply Chains Built for Speed and Customization

As emerging technologies like 3-D printing begin to bring personalized manufacturing to scale, a new “high-speed bespoke” supply chain model is following suit.

ManMohan S. Sodhi and Christopher S. Tang Reading Time: 8 min 

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An MIT SMR initiative exploring how technology is reshaping the practice of management.
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The newest wave of digital customer engagement is developing in one of the oldest of industries: manufacturing. Thanks to emerging technologies like 3-D printing, manufacturers can offer consumers customized products and do so with unprecedented speed. Intrigued by a new product you saw in a YouTube video? Well, soon you may be able to personalize it, order it via the company’s website, and have it in your hands in a matter of days.

We are seeing this phenomenon emerge in a variety of consumer product sectors, including personalized running shoes pioneered by the likes of Adidas AG and Nike Inc. The age of mass customization is finally here, backed by a new kind of supply chain.

Across product categories, we find companies engaging with customers online and inviting them to customize and order products from a company website. Orders are produced quickly — in factories that are located close to the customer and that use 3-D printing and robotics — and delivered via the highest-speed options available.

We call these new supply chains high-speed bespoke supply chains, because they provide both quickness and product customization. And while the emergence of this new model is a function of the manufacturing of personalized products, its value extends to other uses, such as the manufacturing and fulfillment of rarely ordered products. High-speed bespoke supply chains also offer the promise of unprecedented market intelligence for manufacturers by capturing demand signals directly from online customers about specific features they are seeking in existing products and prototypes.

These manifold opportunities also bring new challenges for manufacturers, who will need to strategically integrate a wholly new supply chain model into their operations.

A New Supply Chain Option

Having the right type of base supply chain — one that is lean for cost efficiency or agile for time efficiency — is well-understood by manufacturers. It is a choice that depends on whether the products are commodities — functional goods for which cost matters most — or fashion goods — innovative products for which time to market is critical. Many leading companies split their supply chains between the two types of products. Spanish clothing retailer Zara, for instance, makes its fashion goods in Europe, to be shipped quickly via truck to European customers, while sourcing its commodity goods from China or India and shipping them by sea.

Topics

Frontiers

An MIT SMR initiative exploring how technology is reshaping the practice of management.
More in this series

About the Authors

ManMohan S. Sodhi is a professor of operations and supply chain management at Cass Business School at City University of London. Christopher S. Tang is a UCLA Distinguished Professor and the Edward W. Carter Chair in Business Administration at the UCLA Anderson School of Management in Los Angeles, California.

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Comments (3)
Dr Rabindranath Bhattacharya
Dr. Rabindranath Bhattacharya

Many thanks for this article. 3-D printing, as rightly said,  would ultimately replace the conventional process especially for customized products but unlikely for the products which are mass produced. Both the supply chains will be in operation  and each one would supplement the other based on customers. Innovative products would always be costly and that is where the companies would make money. One day, an innovative product might become a regular product depending on the volume and conventional process would replace the 3-D printing  to match the reduced price ( because of higher volume) to protect the margin. The show would go on like this.
Emmanuel Le Gouguec
Thanks for this vision, but I'like to share 3 points: 
- Cost, current 3D model are not competitive with the existing production system and concept. The situation is a bit better when you consider complete cost, but for a single part, traditionnal industry is still leading, 
- Engineering, the design concept is still in the head of engineering office, and the 3D transformation have to start there, with the confidence in the performance of the product 
- Quality : 3D can not afford to deliver lower quality product vs traditionnal industry, and the gap is still huge with data model to build and to secure,
But, this is just a matter of time and the new tech will come and with transform the whole supply chain concept,
Adeel Najmi
Thanks for an informative article. In my opinion, this is as much about platforms as well.  We are seeing a shift from mass products to towards digital and physical platforms for designing, producing, and delivering be-spoke products.   
The trend is not completely new.   Companies such as Lenscrafters brought manufacturing close to the consumer almost a quarter century ago. What is different now is the connected consumer and technologies such as 3D printing, IoT, Big Data and breakthroughs in machine learning. Digital and physical are merging and these technologies together are creating opportunity to get to know consumers, anticipate their wants and needs at an individual level in real time, and deliver personalized products at high speed.