Sanjay Negi's thoughts on Current Affairs and Information Technology Directions.


Monday, July 31, 2006

Mass Customization of Transportation Services

Mass manufacturing success was followed by ambitious attempts at mass customization. The holy grail here was that each customer could configure a product uniquely and this information would cascade backwords through the order, manufacturing and even the bill of materials and thence on to parts procurement. The mythical market segment of one would therefore be achieved by harnessing the power of IT at little incremental costs to the delivery infrastructure.

In practice it has been slow progress at best. Integrating the entire manufacturing supply chain remains a distant dream. There are too many decoupling points and therefore too many hand-offs. Also enormous capital and sunk investments at various stages in the value addition chain make the whole exercise akin to Don Quixote lilting at the windmills.

However this is increasingly an era of Service delivery rather than manufacturing and it is here that we can sense the contours of mass customization crystalising into reality. A few deft analysts is all that it takes to create a bewildering variety of banking or insurance products for smaller and niche markets segments. It is in the area of intra-city mass transportation services that mass customisation is perhaps waiting to happen. One hopes that it happens in India first.

All that we have today anywhere in the world is buses and suburban trains that deliver mass transport services from one alighting and disembarking station to another. This does not fully meet the actual need for transportation from home to office to markets to theatres to whatever.

Therefore we have mass personal transport to cater to the segment of one in the form of personal vehicles. It is important to remember that what is fundamentally required is customised transport service to transfer a person from point A to point B reliably and economically and a personal vehicle is merely a means of assuring the availability of that service.

If one could step out of the house and walk to a car in the parking lot, flash a card or register a biometric presence to unlock the door, drive it away to one's destination and leave it in this other parking lot without bothering about settling the bills and who uses the car next, society would benefit enormously in many ways.

Most cars would run 12 hours a day and not 1 hour a day. There would be far less cars on the roads, few traffic jams and much less fuel burnt and consequential pollution.

The technologies for making this mass customisation of transport services happen already exist. Sufficient number of people can be uniquely identfied with their PAN numbers along with their driving licences, credit cards and debit cards. Cars can be equipped with multi stage security access tied to unique identification of the service consumer. Cars can be physically tracked with GPS in case of emergencies and the service consumed can be metered automatically to directly collect the dues from the consumers plastic cards or even bank accounts. Going a step further, cars can be equipped with some minimum self diagnostic capabilities with automated update over wireless networks. This would help in preventive and predictive maintenance and help deliver reliability of service comparable to manual monitoring systems.

The costs of commercially installing such a model would be only incrementally higher than conventional self driven taxi services in terms of various security and transaction processing devices on the vehicles as well as the GPS tracking systems. However this would be negligible when compared to the gains in terms of vehicle utilization and manual transaction processing. As always, costs would fall with volumes which would in turn induce more usage in a virtuous cycle.

The present system of personal transport is hugely wasteful. Most cars run for half an hour and then sit idle for the rest of the day sometimes with the drivers too following the same routine. As the cars are associated with their owners, there is an additional image positioning compulsion which makes people own bigger cars. When cars are seen as primarily a utility, most people would make do with basic reliable and sturdy vehicles which take them to their destinations without fuss or fury.

What about the conventional mass transport systems like suburban trails and buses. These systems are best modelled as hub and spoke systems where the the smaller units like buses converge on a hub like a rail station in a feeder role and the architecture unravels itself at the other end. As the travel distances lengthen hub and spoke systems assert their economies of scale over personalised transport and would therefore continues to play their roles in our megapolises.

The mass customised transport systems as envisaged would also adapt to achieve economies of scale by co-opting a share taxi version where a good proportion of vehicles would have multiple concurrent consumers. The formulae for fare sharing would evolve in ways reminiscent of those used by the share taxis which start out as full vehicle renting for the first passenger and then give him or her progressive discounts with the addition of each passenger.

Vehicles participating in the mass customisation of transport services would have to be well dispersed across the city and within walking distances from residences, markets, theatres and places of work. Sufficient buffers would have to be designed into the model to take care of the skewed demand through the day and week. The city would have to provide ample parking spaces at short intervals. This should not be such a problem as a huge amount of road side space presently hogged by privately owned vehicles would inevitably get released.

However this parking would have to be managed closely and here again technology will come to the rescue. Agencies running the mass customised transport services would contract with parking lot owners for bulk space and ancillary services which would help keep their fleets running smoothly.

The information gathered during the delivery of this brave new service would have several other off shoot benefits. The pattern of service use would make it feasible to target other product and service promotions at each individual and parking lot owners and fleet operators could collaborate to deliver such targetted messages. The possibilities are only limited by one's imagination.


Blogger JIVE said...

Dear sir,
This sounds like a great idea.
This would definitely solve our transport problem for confused and growing cities like Delhi.

On similar lines...i had the idea of moving roads. There is a web of moving roads which run by solar energy (and storm water energy when it rains)and the web can be on ground above ground or above our houses and buildings.

The web has moving elements-so one only has to get on a particular elelment to reach the destination. Space consumed is only probably 1sq feet by one person. And, many persons can maybe just sit on this web elements which moves perpetually. i think running it would cost less than all the oil that we use for plying our personal vehicles.

At night? don't know...At least day can be fruitful.

Customization idea - The whole idea of privately owning things and space (and people 2) is to have a 'personal' angle to the things that you buy or create. So, if that is lost, one would not be interested in only its utility per se as we are humans with few affective domains in our minds.

However, one never can be sure... the future might be a very uniform, efficient, without any fault living. Only the small joys of life would be hard to find.


thanks for your rich thoughts.

9:47 PM


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