Industry 4.0 is revolutionising production systems and reshaping the manufacturing landscape. The introduction of cyberphysical systems (CPS), Industry 4.0, and the Industrial Internet of Things (IIoT), has opened up the possibility of mass customisation across production lines. Mass customisation is becoming increasingly important for the manufacturing industry because it creates the possibility of IIoT-ready and CPS-based smart production, which provides manufacturing firms with opportunities to carry out multiple production strategies. In addition, manufacturing firms can improve their competitive position by allowing them to react quicker to changing consumer demands.
Mass customisation can be achieved by integrating three strategies that will increase the value for both manufacturers and customers. The first manufacturing strategy is Made-to-Order (MTO), whereby the production begins by intelligently combining orders from multiple customers, which are then decoupled into common modules, parts, or components to allow for economies of scope. One of the main advantages of economies of scope is that it opens up the possibility to create diverse product designs and offerings and allows businesses to create more value for their customers.
The second manufacturing strategy is Made-To-Stock (MTS), which involves the common modules being made as close to complete as possible. The reason for this is that when the customer places their customised order, most of the product has already been made and there is a minimal amount of work to perform until the product is finished. By following this work procedure allows customised orders to be fulfilled much quicker than if the process starts from scratch after a customised order is received. For this strategy, the modules must be identical, so the manufacturer has to ensure that quality assurance is to the highest standards. This strategy allows the manufacturers to enjoy economies of scale, which significantly reduces their production costs.
The last strategy that manufacturers can take advantage of is Assemble-To-Order (ATO), which is achieved by combining the product’s previously produced modules on custom production lines. As the modules have already been made, it requires minimal time and effort to meet the customer’s specific order, which allows the manufacturer to enjoy both economies of scope and economies of scale. Since this tailor-made production only requires minimal effort to combine modules when an order from a customer is received, it eliminates problems that often occur in the manufacturing industry such as stockpiling or surplus stock.
Changing Industrial Landscape
One of the leading trends to emerge from the IoT and IIoT is digital transformation. The manufacturing industry has eagerly embraced digital transformation and is already being revolutionised by it. It is predicted that worldwide spending on the IoT will continue to be hundreds of billions of dollars in 2018, with around a quarter of that being spent on the manufacturing industry. The manufacturing industry is eagerly embracing IoT technologies because of a strong desire among business owners to streamline production systems and deploy cyber-physical systems to connect factories. In order to achieve this, factories have to connect more of their machines and equipment to the Internet as well as ensure that their devices can perform more intelligently and operate with greater autonomy, which will in turn allow business owners to react to any changes that their customers request. Only when they have achieved this, will they have a mass-customisation production model.
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