Batch Size One Increasing consumer demand for personalization could lead to the mass production of highly customized goods, resulting in decentralized ‘batch size one’ production. Manufacturers can leverage new technologies and business models to bring the production process as close to the consumer as possible and reduce lead times. Supply chains will need to accommodate changes in time and place of production and integrate new postponement services. KEY DEVELOPMENTS & IMPLICATIONS In contrast to the common practice of offshoring manufacturing to countries such as China, the ‘batch size one’ trend anticipates that companies will establish micro-production sites closer to demand such as near or within megacities. Answering the need for product hyper-customization and ever-faster delivery times, these highly automated micro-production sites will utilize cutting-edge robotics, automation and 3D printing technologies to rapidly produce personalized goods (e.g., Adidas Speed Factory). Manufacturers will be able to react immediately to location-dependent trends, and deliver goods with shorter timeframes with first-movers already testing this. Logistics providers must design flexible and digitalized processes, revise warehouse operations, and utilize new agile delivery concepts to maximize operational effectiveness. New warehouse hyper-customization services will answer the future need for speed. Warehouses will connect production with logistics, offering extended postponement services on behalf of customers. With 3D printing and other mobile automation technologies, logistics providers can take over final assembly and/or product customization. They can also use their global networks to customize stock and deliver closer to the point of demand. Inventory management and replenishment for micro-production sites will need to be carefully forecasted and managed in order to keep just the right amount of stock in close proximity to each site. This may increase the need for flexible, multi-user warehouse environments in order to improve geographical coverage of stock and remain responsive to sudden fluctuations in demand. Agile ‘batch size one’ delivery concepts are needed to manage the increasing number of single orders and shorter delivery routes as production becomes more decentralized and moves closer to the customer. This may result in more frequent deliveries from more loading points. The use of on-demand logistics services and last-mile robotics solutions designed for the transport of small payloads could facilitate ‘batch size one’ shipments. KEY OPPORTUNITIES ■ ■ ■ Offers extended warehouse fulfillment service opportunities (e.g., onsite 3D printing) Achieves individualized product and service offerings for the end customer Builds customer loyalty through closer, more direct end-customer relationships KEY CHALLENGES ■ Financial feasibility of ‘batch size one’ production is yet to be validated ■ Difficult to plan and implement logistics processes in fast-changing environments ■ Complexity in managing supply chain responsiveness and flexibility in last-mile delivery Redesigning the Textile and Apparel Supply Chain – SEWBOT by SoftWear Automation ■ ■ ■ SEWBOT is a breakthrough robotics innovation that can automate the highly complex and manual activity of apparel production The solution is capable of producing a t-shirt within 26 seconds; its planned use is localized manufacturing for some of the world’s largest fashion retailers Further developments in this technology may enable a leap from localized mass production to ‘batch size one’ production of apparel Source: SoftWear Automation Trend Assessment Timeframe: > 5 years Impact: Medium Sector Relevance: AUTO E&M TECH ENERGY LSH RET&CON