Artisan Manufacturing
I was touring an artisan manufacturing plant a few weeks ago and I noticed something that was initially very alarming. Rampant inefficiency. As someone who has established a career helping plants operate efficiently, I wanted to pull my hair out. I asked myself, how can this shop successfully operate like this? And how have they been successful for nearly 100 years? As I continued my tour and studied their business model I began to understand.
What is Artisan Manufacturing?
Artisan products are products that are designed using artistic methods, rather than scientific methods during the product development process (art instead of science). For example, a company making high quality gourmet chocolate, cheese, wine or say perfume falls into this category of artisan products.
Artisan manufacturing is the production of these types of products. The production efforts of artisan manufacturing focus on product-to-product consistency and maybe even more so than traditional high-volume manufacturing. That is because the quality attributes can be subtle and unmeasurable, such as aroma and flavor hints. With artisan products, you can’t allow the subtle attributes that make the product unique to drift in and out of a batch during production. Customers pay a premium for artisan type products, and they expect the uniqueness of the art to be apparent in the product.
The Imperative Results
What’s important is the art. What’s not so important is production efficiency and product costs. That is weird for me to even say, as someone who spent 35-years dialing-in the micro details of production effectiveness. Maybe you’re the same as me? Is it difficult for you to comprehend how efficiency and costs don’t matter in the production of artisan products? Why doesn’t it matter? Let me explain.
Artisan products provide customers with extremely high value by providing a unique and delightful product design and their customers are willing to pay premium prices for this uniquely delightful product. What that means is that manufacturers of artisan products need to add value and thus invest in the uniqueness of their product during the product development phase of their products lifecycle. The developers are typically worldwide experts who have very specialized credentials, skills and experience. The customer value is contained here, and they are willing to pay for the art of the product design, whether it is an appearance, a flavor or a scent.
The cost and customer value-add of artisan products fall outside of the production arena. Product margins are so high that production inefficiencies have little impact on bottom line profits. What is important for production is production consistency. During production the one thing that you can’t afford to do is that you simply can’t lose the recipe that provides the product’s uniqueness and its value. Tradeoffs between efficiency and consistency will always favor consistency. Product consistency is non-negotiable.
Since most artisan products are produced in production batches and not continuous flow, the batches essentially get "babysat", or guided through each step in the process. Subject matter experts are the guides and the evaluators. They care about quality, not about efficiency. The production team has met its objective when the product batch is complete, anticipated design attributes are met and the product rests in its final packaging. It is then ready to be sold to an eager customer.
When it comes to artisan manufacturing, production success is not measured by efficiency, but in the subtleness of the art that was achieved.
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