Custom Made Products vs Factory Made Products

During last 2 centuries world has moved towards industrialization and factory institutions. The financial models are more and more based on scale rather than anything else. Globalization has further pumped the industrialization model and products made by industries are targeting wider audiences and are not restricted by geographical locations. In developing economies such as that of India, where industrialization is still penetrating the market, we see that conventional producers are slowly eloping in the shadows of centralized production units. Today customer no more buys goods produced in his locality, but buys what any other guy would have bought in a remote location who may be of a different age, religion, or taste.

I am not only talking about good produced but also for services provided. Education, for e.g., has become a factory system where schools as industries are catering a similar product to all its students. 500 students of same class come to school, absorb same curriculum / lectures and then perform as per what they could absorb. With no clue of their expertise, all of them try to follow one of the few structured paths to complete their education and spend their life with the job they achieve through it. Little schools care that each student would have his own capabilities and areas of expertise that he could excel in. As per Gardner's Theory of Multiple Intelligence, each student has a particular spectrum of intelligence and different methods of education suits them differently. There are a few schools who have opened up recently to cater to those students who are left out by leading school chains and are declared as 'failed'. One such example is http://www.creativelearning.in/ where they have admitted students who failed in other schools and have provided unique handcrafted course structure as per each student's needs. They have achieved wonderful results!




For industries, model of scale and off-the-shelf products makes sense as they are able to create a product (or service) for the mass, flush it down the supply chain and let their consumers adjust their needs and tastes as per the product. This approach may work for commodities where experience in consuming them does not matter much. But as and when experience becomes relevant it may not be a worthwhile product from consumer's end. Following is a comparison based on a small survey of 10 people. It depicts two things:

• How much is the importance of 'experience' for each product category (on a scale of 10)
• A general analogy on how much cost sensitive would it be to customize the product as per requirement of each customer.

Customized Travel - Way to go!

It turns out that for things such as kitchen utensils, people are not looking for much experience but for education and leisure travel the need for customization is very high. Whereas it may be a costly affair to provide customized education suited to each individual it is not so costly in travel products. Further analysis support the fact that people who want to experience travel do not just want to visit the place and go through the monuments, rather they want to live the place they are going to. In Kerala people would like to wash elephants or visit local dance shows or go for a wonderful houseboat experience. The needs are so varied and each need when fulfilled provides so much delighted experience that one can not miss out on them by choosing a structured 'same for all' package to Kerala.

With the second phase of industrialization, companies are bending towards customer satisfaction and providing them products that satisfy the specific needs of the customer. To my knowledge DELL was a pioneer in this regard and their website says that they do not sell laptop but they sell exactly what a customer would need. Industries can be profitably based on customers experience rather than solely on  sales figures. New startups are also coming up which promotes the 'custom made' ideology such as TravelTriangle (travel platform which fulfills custom needs of travelers with local travel agents) and custommade (custom furniture with local craftsman).