Customization Can Set Small Businesses Apart

BOSTON (TheStreet) -- Technological advancements, such as "open source" code and on-demand manufacturing, are changing the ways consumers buy goods.

These strategies enable technology to do the heavy lifting for companies and have the collective potential to allow people around the world to specify every imaginable attribute of any product/service they want, when they want. Call it, "demand and supply."

Customization and personalization are supercharging this consumer movement, and there are several examples on and off line to be found:

• Starbucks(SBUX) makes personalized coffee on the spot and people line up all over the world to pay $3 for it.
• Build-A-Bear Workshop lets people come into a store, personalize the look, feel, color and clothes of a teddy bear and pay as much as $100 for the privilege of stuffing it themselves (and eliminating the need for labor to do it).
• Threadless.com allows users to submit designs for T-shirts through its Web site. The community votes for the designs they like best and say they'll buy. Once a design gets enough votes, the shirt is made and it sells.

By now, you may be thinking that I'm not serious. T-shirts, coffee and teddy bears?

But apply this concept to how cars are made and sold today. A company decides what a car should look like -- what color it is, what adornments it has -- and sends it out the door to be sold (or not) based on market research. Now imagine an on-demand model in which a customer comes to an automotive design and assembly center where they can personalize their car any way they want and have it assembled from inventory and emerging manufacturing processes.

Many "traditional" businesses are adopting personalization into their product development, most notably the computer maker Dell(DELL).

Three-dimensional printing is emerging as a viable, realistic technology. It allows anyone with a machine to "print" layers of materials on top of one another, creating a form. Companies like Ex One have pioneered the concept into a reality that will lead to a "printing machine" in every home. Again, imagine a consumer going to Amazon.com(AMZN), ordering a design file, stopping at Home Depot(HD) for a "materials pack," driving home and making a product.

What would these shifts do to your business? How would nodes in the supply chain be affected -- distribution, sales, purchasing and design?

On-demand and personalization models will continue to permeate the marketplace, and businesses of all sizes and types will have to eventually respond to these shifts.

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