**5.1. The impact of mass customization on sake breweries**

According to the case study of Sekiya, the key factor in the success of the custom-made system over those of other sake manufacturing companies is the continuous challenge of digitalizing and transferring professional techniques and skills. Recently, many other sake breweries have attempted to transfer their technics and skills from Toji to employees and failed because they focused on transferring implicit knowledge and techniques without digitalizing and improving the manual tasks. In contrast, digitalization alone is not enough to create a major impact on their business because companies have to understand what kind of data is important for high-quality and stable production from experienced professionals.

Sekiya has faced the two challenges for a long time and succeeded. In this traditional and extremely old industry, it is incredible to receive more than 230 orders per year from original sake-brewing groups. Therefore, although other sake breweries have mimicked Sekiya's history, they have not been readily able to catch up.

In addition, Sekiya has tried to strengthen the relations with consumers to achieve the smart manufacturing and customization. In 2013, they opened up a directly managed restaurant, "Sake Bar Marutani," in the center of Nagoya which is the third largest economy in Japan. Marutani is the oldest business name of Sekiya, and they used 150-year-old storehouse as the restaurant. This restaurant has four important managerial factors: (1) introducing how to drink traditional sakes and enjoy differences such as glasses and seasons, (2) promoting communications between employees (technicians) in the factories and consumers, (3) conducting test marketing for new products and new lineups, and (4) investigating the trend of foods and tastes.

These factors are all aimed to intensify the connection with end users. By obtaining the feedbacks from end users for years, Sekiya has built a capability to determine which information is important (and which is *NOT* important) for the development of smart manufacturing and customization. Avoiding unnecessary information is also important as much as to acquire valid information for the smart system.

#### **5.2. Theoretical review on the transition of manufacturing processes**

Hu [21] illustrated the evolution of the manufacturing paradigms in **Figure 8** using a volumevariety relationship. As noted in Section 2, the first paradigm in manufacturing is described as craft production. These manufacturing processes were driven by professionals with highly skilled handcrafts.

Mass production began in Michigan with the introduction of the Henry Ford moving assembly line, which was built in 1913 and reached its peak after the end of the World War II, when demands for products became very high [21]. Next, Toyota invented a new manufacturing

**Figure 8.** Evolution of manufacturing paradigms [21].

management philosophy called lean manufacturing. The goal of the management system was to minimize waste from the manufacturing process and maximize value of their customers simultaneously [22].

First, although the volume per product model is insignificant compared to mass production, a certain level of volume must be produced to satisfy mass demand. A medium production volume is also needed to keep manufacturers active and strong. A small amount of production for a high price should be easier and can be realized by anyone. The production of a certain volume for a relatively low price will be the challenge. For this reason, the next two barriers are discussed.

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Second, to realize mass customization and personalization, an open platform for communication and a sophisticated module design for manufacturing must be constructed [23, 24]. Not all processes and modules can be personalized at a low cost. Therefore, usually at least three kinds of modules are required: (1) a module similar to mass production; (2) a module that customers select, mix, and match; and (3) a module that customers design from the beginning with engineers and designers. The difficulty of realization increases from (1) to (3). Of equal importance is the meta-design, which is required to adopt a higher perspective through which to create these three modules in the end products. Since the most attractive point of personalization production is extreme differentiation, the combination of the three modules

Third, manufacturing companies must pay careful attention to the fact that customers need different levels of participation in the codesigning process, meaning that some customers may request deep participation with designers and others may not. Therefore, it is also very important for manufacturers to build a system to realize customer requests. Sophisticated visualization and prototype creation are good examples because they enhance the customer's imagination and clarify the customer's deeper needs. By doing so, customers have an experience that cannot be obtained with other manufacturers, thus increasing the degree of satisfaction. These manufacturers could also employ even more useful and competitive open

The final barrier especially relates to the food industry and agribusiness. Mass customization and the rise of personalization have been realized in industries such as automobile manufacturing,

becomes even more important for product competitiveness and superiority.

platforms to communicate with their customers [25, 26].

**Table 3.** Key differences between manufacturing paradigms.

As mentioned above, Pine II [17] described the mass customization emerging in the 1980s as a new frontier in business competition. The main field of global competition evolved from high productivity with low costs to high customization, because the needs of consumers in advanced countries had been almost fulfilled with high-tech products. Those needs then changed from volume to quality and from singularity to diversity. Therefore, the number of varieties offered by consumer product manufacturers increased significantly. The manufacturers prepared various models of their products with combinations of each assembly line so that consumers could select among various options and enjoy original products.

Sekiya is one of emerging sake breweries creating a new and original mass customization manufacturing system. In a shrinking market, this brewery has developed a substantial business in Japan. Takeshi Sekiya, the CEO of Sekiya and its seventh-generation heir, notes that the brewery does not want to expand rapidly. Instead, it continues to develop productivity in its services.

Eventually, the manufacturing paradigm will enter the personalization phase in which consumers' roles include not only choosing and buying, as in mass customization, but also designing products by themselves with manufacturers (**Table 3**). At that point, the design process will involve either value creation or what consumers are willing to pay.

### **5.3. Design of open platform and future perspectives for food industry**

The drivers of manufacturing processes have further evolved from manufacturers to customers driven by the huge power of digitalization and smart manufacturing. In this chapter, we see a small sign of the new paradigm, personalization, emerging in the traditional food industry. However, there are a few substantial barriers in the way of the growth of this new paradigm.


**Table 3.** Key differences between manufacturing paradigms.

management philosophy called lean manufacturing. The goal of the management system was to minimize waste from the manufacturing process and maximize value of their customers

As mentioned above, Pine II [17] described the mass customization emerging in the 1980s as a new frontier in business competition. The main field of global competition evolved from high productivity with low costs to high customization, because the needs of consumers in advanced countries had been almost fulfilled with high-tech products. Those needs then changed from volume to quality and from singularity to diversity. Therefore, the number of varieties offered by consumer product manufacturers increased significantly. The manufacturers prepared various models of their products with combinations of each assembly line so

Sekiya is one of emerging sake breweries creating a new and original mass customization manufacturing system. In a shrinking market, this brewery has developed a substantial business in Japan. Takeshi Sekiya, the CEO of Sekiya and its seventh-generation heir, notes that the brewery does not want to expand rapidly. Instead, it continues to develop productivity in its services.

Eventually, the manufacturing paradigm will enter the personalization phase in which consumers' roles include not only choosing and buying, as in mass customization, but also designing products by themselves with manufacturers (**Table 3**). At that point, the design

The drivers of manufacturing processes have further evolved from manufacturers to customers driven by the huge power of digitalization and smart manufacturing. In this chapter, we see a small sign of the new paradigm, personalization, emerging in the traditional food industry. However, there are a few substantial barriers in the way of the growth of this new paradigm.

that consumers could select among various options and enjoy original products.

process will involve either value creation or what consumers are willing to pay.

**5.3. Design of open platform and future perspectives for food industry**

simultaneously [22].

**Figure 8.** Evolution of manufacturing paradigms [21].

70 Digital Transformation in Smart Manufacturing

First, although the volume per product model is insignificant compared to mass production, a certain level of volume must be produced to satisfy mass demand. A medium production volume is also needed to keep manufacturers active and strong. A small amount of production for a high price should be easier and can be realized by anyone. The production of a certain volume for a relatively low price will be the challenge. For this reason, the next two barriers are discussed.

Second, to realize mass customization and personalization, an open platform for communication and a sophisticated module design for manufacturing must be constructed [23, 24]. Not all processes and modules can be personalized at a low cost. Therefore, usually at least three kinds of modules are required: (1) a module similar to mass production; (2) a module that customers select, mix, and match; and (3) a module that customers design from the beginning with engineers and designers. The difficulty of realization increases from (1) to (3). Of equal importance is the meta-design, which is required to adopt a higher perspective through which to create these three modules in the end products. Since the most attractive point of personalization production is extreme differentiation, the combination of the three modules becomes even more important for product competitiveness and superiority.

Third, manufacturing companies must pay careful attention to the fact that customers need different levels of participation in the codesigning process, meaning that some customers may request deep participation with designers and others may not. Therefore, it is also very important for manufacturers to build a system to realize customer requests. Sophisticated visualization and prototype creation are good examples because they enhance the customer's imagination and clarify the customer's deeper needs. By doing so, customers have an experience that cannot be obtained with other manufacturers, thus increasing the degree of satisfaction. These manufacturers could also employ even more useful and competitive open platforms to communicate with their customers [25, 26].

The final barrier especially relates to the food industry and agribusiness. Mass customization and the rise of personalization have been realized in industries such as automobile manufacturing, chemical industry, electronics industry, and other high-tech industry. And the food industry and agriculture will be following. Food is based on organics that can be eaten, which means that manufacturers must see many limitations for its components and ingredients. This is one reason that 3D printers cannot make foods in bulk. Manufacturing also cannot overcome agriculture. Most of our foods are grown from the land, including grains, vegetables, feed for livestock, and even water. Although we have recently seen successful plant factories, most of which have focused on specific vegetables and do not produce in high volume. We must wait for ICTs to undergo further advancements and integration with biotechnology, botany, and environmentology.

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