← Business Models: Core (all topics)
High-mix low-volume
What it is
Manufacturing many different products in small batches, rather than few products in large runs. It suits industrial, medical, defence and aerospace electronics where each customer needs a distinct board in modest quantity
It demands flexible lines, frequent changeovers and strong engineering support
Impact on industries
- Margins are far better than consumer-volume assembly, since customers pay for engineering support and flexibility rather than lowest unit cost
- Customer relationships are stickier and less price-driven, and the segment is unattractive to large scale-focused competitors
- Changeovers and small runs mean lower asset utilisation and higher inventory across many part numbers
- Revenue scales with engineering capacity rather than with equipment, so growth is people-constrained