Mass customization and AI-powered supply chains: product variety and low inventories are not an oxymoron

Part I: Forecasting for long-tail products

By Kishore Jethanandani

The Amazon effect is writ large on the upheaval buffeting consumer markets and their supply chains as delivery time is shortened to a day. Close on its heels, the Shopify effect — mass customization combined with the speed of delivery — is reshaping consumer markets and their supply chains. Unprecedented demand volatility has rocked consumer markets as consumers crave novelty and personalization in not only products but also in their merchandising. Sales forecasting is prone to the risk of larger errors which can only be mitigated by innovation in tracking early indicators of demand for innovative products.

Mass Customization

Personalization and customization are more than an afterthought for consumers — they materially influence their product choices. This is reflected in the fact that collaborative customization, including both function and form, is the leading type of customization. Transparent customization which affects functionality but not the form (packaging) is a close second while cosmetic customization of form alone is the least favored.