The end of the world: Part I

The world didn’t disappear on December 21st but the era of business, as we know it, is over.

Part 1 : The future of mass production

Crisis is still creating lots of casualties in the business world. Do companies still suffer from the worldwide financial crisis or did they adapt to the new reality? The world changed a lot since 2008.

Mass production as we know it in the western world is definitely coming to an end and one of the most significant examples can be found in the automotive industry. Over the past years, car factories closed and thousands of people lost their jobs. Even today, when a car manufacturer decides to close a factory, people seem to be surprised while there’s nothing to be surprised about. In some countries, governments even subsidize the industry or use their political power to keep factories open in their respective countries, the perfect example of value destruction while every single western country is struggling to get their financial situation back on track.

They all suffer the same problem: saturated markets, especially in Europe at this time, and we don't need rocket science to understand why.  Today, we’re producing cars at a much faster and efficient rate than Henry Ford was doing with his Model T Ford 100 years ago with high production outputs as a result. Most families though, have cars that last much longer than the Model T back in 1908. Since the crisis kicked in, people seem to realize that they don’t necessarily have to replace their cars every 3 to 4 years, resulting in a big downturn in the market.

More old fashioned, non-flexible, factories will have to close their doors and we’ll move towards more modular, flexible solutions; this can already be noted in new factories but they’re only first small steps. More modularity, cross-product and cross-firm standard components supported by better communication technology will eventually lead to a business model that we have already seen in the consumer electronics business for years. Manufactures like Volvo & Fiat already have set their first steps but are waiting on the big boys in automotive to get the ball rolling. It’s only a matter of time before we can order our cars just like we order our personal computers.