**3. Japan's sake industry and market**

The concept of mass customization first appeared in 1987 [14]. Tseng and Jiao [15] defined mass customization as the creation of products and services that meet customers' needs while maintaining productivity at a level close to that of mass production. There are already many examples of mass customization [16], including software based on product configurators that

Mass customization is a stage of new business competition in the manufacturing and service industry. The service industry also enables various customizations without increasing cost. For example, a call center adopts agent-based voice technology to process customers' inquiries. The agent does not change everything every time, but he or she does change the response pro-

Firms talk to individual customers to determine the precise product offering that best serves the customer's needs. This information is then used to specify and manufacture a product that

Firms produce a standardized product, but this product is customizable in the hands of the

Firms provide individual customers with unique products without explicitly telling them that the products are customized. In this case, there is a need to accurately assess customer needs.

Firms produce a standardized physical product but market it to different customers in unique

Another production system, called a personalized system, reduces the distance between the customer and company and reflects a customer's idea. From a historical point of view, this method has existed since the time of the household-based handcraft industry. As a new approach in recent years, customers take part in the design stage [18]. Because customers have various needs, they actively join the design process, paying a price to affect the product's quality. Developing a ubiquitous network environment and a flexible process management

Thus, to meet these customers' needs, manufacturers need to build new architecture with an open manufacturing platform [19]. In such an on-demand manufacturing system, product simulation, responsive, and cyber-physical systems have already been realized [20]. A more rapid assembly process might be necessary to respond to customers' requests. Hu [21] describes this paradigm as personalization and distinguishes it from both mass production

can both add to and change the function of a core product.

cess depending on the customer's inquiries and needs.

Pine II [17] identifies four types of mass customization:

• Collaborative customization

62 Digital Transformation in Smart Manufacturing

suits that specific customer.

• Adaptive customization

• Transparent customization

• Cosmetic customization

and mass customization.

method in manufacturing has made this possible.

end user.

ways.

Sake is defined by the Liquor Tax Act as an alcohol drink made from rice, water, and rice malt that is fermented and strained. Currently, it has two classifications: specific classes and other than specific classes. The specific classes are also divided into eight categories based on differences in ingredients and processes (**Table 1**). Generally, the specific classes are priced higher than the other classes.

**Figure 1** shows the amount of sake production in Japan. Production peaked in 1975 and has gradually decreased. The share of sake in total alcohol drinks has also declined slowly, reaching 6% in recent years. This is because other alcohol drinks other than sake became popular. Beginning in the late 1970s, alcoholic drinks such as wine and whiskey were introduced to the market, and drinking places such as beer gardens and wine bars also became popular.

High-quality, high-priced sake in specific classes, for example, Jumnai and Ginjo, thwarted this trend in the late 2000s (**Figure 2**). At the time, some consumers began to express interest in local small- and medium-sized sake breweries. These breweries produced unique and original sake in specific classes based on local materials and techniques. Consumers across the country enjoy those characteristics and diversities.

Sake breweries are dispersed across Japan. Facilities producing less than 100 kl count for 60% of all sake breweries and those producing more than 300 kl are only 15% of the total. In terms of the market share, the top sake brewery, Hakutsuru, has almost 10% of the sake market, and the top five breweries have 37% of the market (**Figure 3**). Compared to the beer market, almost 99% of which is composed of the top four beer companies (**Figure 4**), we see how much the sake market is diversified and does not show oligopolization.

It seems that small- and medium-sized sake breweries have different market targets than large sake breweries, which continue to make their products at lower prices using mass production techniques. Although the amount of sake production has continued to decline for 40 years, high-value products made by small and medium breweries prevent the total market size from decreasing. These local breweries are also challenged to create new techniques and skills. In the next section, we study one typical brewery.


**Table 1.** Classification of sake.

**4. A case of new mass customization and personalization in the sake** 

Sekiya was founded in 1864 in the southeast prefecture of Aichi in Japan. Since then, Sekiya has been manufacturing high-quality sake using both traditional Japanese skills and advanced techniques. Sekiya has 53 employees and 1.7 billion yen of sales in 2016 (**Figure 5**); it is a middle-

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The goal of the company is to brew high-quality sake that explores the possibility of sake flexibly. Their brewery is actively implementing new technology and does not have the atmosphere

**industry: Sekiya Brewery Co., Ltd.**

**Figure 4.** Market share of beer in Japan in 2016.

ranking company among Japan's sake breweries.

**4.1. Characteristics**

**Figure 5.** Sales of Sekiya.

**Figure 2.** Amount of specific classes.

**Figure 3.** Market share of sake in Japan in 2016.

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**Figure 4.** Market share of beer in Japan in 2016.
