It's not applicable to about 95% of what's produced in a modern economy - not computer hardware, not food, not transportation, not clothing, etc.
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Fair enough.
But I would swerve our understanding of what open source means away from production - which, as you say, could not be performed on modern scale using Open Source methods - towards thought.
That is, I view open source as a means for maintaining deep understanding of complex systems through free information sharing and, to whatever extent possible, ground level participation in the productive process outside of large scale enterprises.
The emphasis here is on "to whatever extent possible" and "understanding of complex systems".
In the world of software the key value of open source, at least as I interpret it, is that the know-how to create applications is distributed beyond closed source entities. Of course, this is easier to do with applications because they're made from thin air and do not require the same sort of labor intensity as auto manufacture and power generation.
But the process of labor Taylorization and atomization has produced modern primitives: people who treat the technosphere as an area of religious mystery due to their lack of knowledge and who, as a result, can be swayed from one pole to the other like medievalists with (on average) better hygiene and nicer toys.
If Microsoft tells the average computer user they're "adding value", many are inclined to believe because they're unaware of the many ways Redmond acts as a gatekeeper and hindrance to development.
Open source adepts - not all of whom are code gods and goddesses - have the analytical tools needed to dissect these claims.
This kind of sharp skepticism comes from participation in the productive process as a full-on creator. Again, this is easier with software than subway systems and hydroelectric dams but to whatever extent possible the information exchange and peer review model should be applied far and wide.
In other words, I see open source as the seed of a participatory model (again, mostly at the level of understanding and information sharing - with production occurring where possible) of citizenship in a technological society.
.d.