Much as their peers elsewhere in the manufacturing world, low-volume, high-complexity (LV/HC) manufacturers—makers of highly customized, complex products with a large spectrum of variants, at volumes between 10 and 10,000 units per year—are facing disruption. Increasingly, they understand the urgency of adapting quickly to an ever-evolving space, perceiving the limits of hardware-driven growth on the one hand and digitally enabled business opportunities (both in their own sector and in adjacent industries) on the other.
This report combines the latest research from McKinsey’s Advanced Industries Practice and the McKinsey Center for Future Mobility with insights from studies in LV/HC industries from around the globe—on topics from strategy to operations to implementation. This report is intended as an integrated perspective on the status of the LV/HC sector and its top challenges, especially for original equipment manufacturers (OEMs). It also aims at offering a perspective on how OEMs can navigate the emerging new landscape and begin to future-proof their LV/HC operations.
Three conclusions are especially critical for today’s LV/HC players, as explained in more detail in this report:
- The time to address long-standing challenges is now. The emergence of new market dynamics and technology trends brings new challenges to LV/HC. This makes it more important than ever for the industry to confront evergreen challenges that have yet to be successfully mastered.
- Many LV/HC companies are already making gains. From electronics and machinery manufacturers to heavy-equipment OEMs to component producers, many players are already taking action and finding real solutions to industry-related challenges both old and new.
- The journey to future-proofing starts with understanding. Two actions are essential: assessing current performance vis-à-vis old and new challenges, and assessing readiness regarding new technologies.