BUILDING PRODUCTS ON-DEMAND FOR E-COMMERCE
by Dr. David M. Anderson, P.E., CMC
Internet and mail order sales result in a string of unpredictable individual orders, possibly mass-customized, that demand fast delivery. Business-to-Business (B2B) sales will require very rapid response time, especially if customer companies are building their products on-demand for other demanding e-commerce markets.
Selling products from forecasted inventory is becoming less viable because forecasts are becoming less accurate and being changed at internet speed. Even assembling "to-order" from forecasted parts inventory (the Dell model) will become more difficult as demand become less predictable and inventory management becomes more difficult. Except for capitol equipment, e-commerce customers will want rapid deliveries, too fast to make customers wait for purchase parts to arrive. Lean retailers, like Wal-Mart, are demanding frequent and rapid replenishment of its stores based on real-time sales data.
Some digital strategies accept the deficiencies of mass production and recommend "the illusion of build-to-order" by searching the web for inventory! On the transportation side, overnight shippers come to the same conclusions when they recommend that the way to reduce inventory levels is to know where the inventory is and how long it will take to ship it.
The explosion of books, conferences, and consultancies on e-commerce focus almost exclusively on services, information "products," and software, not on physical products that have to be manufactured and distributed. What is needed now for both e-commerce, and commerce in general, is the ability to quickly manufacture individual products on-demand.
Spontaneous Build-to-Order can efficiently build any quantity of standard products on-demand to support e-commerce without the cost, obsolescence, or out-of-stock problems of inventory. Spontaneous build-to-order is taught through Dr. Anderson's in-house seminars and implemented through his leading-edge consulting.
In addition, e-commerce sales have the potential for individually customized products, which will need to offer enough variety, speed, and value to be a viable business model. This will require Mass Customization.
Dr. Anderson is a California-based consultant specializing in training and consulting on build-to-order, mass customization, lean/flow production, design for manufacturability, and cost reduction. He is the author of "Build-to-Order & Mass Customization, The Ultimate Supply Chain Management and Lean Manufacturing Strategy for Low-Cost On-Demand Production without Forecasts or Inventory" (2004, 520 pages; CIM Press, 1-805-924-0200, www.build-to-order-consulting.com/books.htm) and "Design for Manufacturability & Concurrent Engineering; How to Design for Low Cost, Design in High Quality, Design for Lean Manufacture, and Design Quickly for Fast Production" (2004, 432 pages; CIM Press, 1-805-924-0200; www.design4manufacturability.com/books.htm). He can be reached at (805) 924-0100 or firstname.lastname@example.org; web-site: www.build-to-order-consulting.com.