Mass Customization & Open Innovation News

Fujitsu Siemens Computers Goes Open Innovation: User Innovation Contest Started

You create the next IT Services for Tomorrow’s Data Center

Fujitsu Siemens Computers (FSC), a large IT infrastructure provider, just started their first community-based innovation contest this week. The contest asks everyone with a clever idea to develop ideas around the Data Center of the future.

They ask the questions how data centers will work in the future, what services will be required by users, and which topics will be of strategic importance for their business.

The contest has been created by a business team within FSC with the help of HYVE AG, a Munich based open innovation accelerator. On the platform, users not just become a source of ideas, but a member of an Innovation Community. This shall enhance their ideas with the help of other contest participants and the internal experts from Fujitsu Siemens Computers.

Every idea can be evaluated and commented by every contestant. As a consequence, ideas become vital elements which can be formed and developed by many spirits and thereby have the chance to gain excellence. While the original spin doctor competes for one of the prizes for one specific idea, the contestant’s activity within the community is rewarded as well.

In order to enable the contestants to actively interact beside the discussions on ideas, several additional functions are available to the participants. Weekly chats with other participants and Fujitsu Siemens Computers Professionals are dedicated to specific topics which are defined according to eminent issues within the pool of ideas. Not to mention the forum and other features.

Every contestant can contribute several ideas. The essence of the ideas is described through a handful of uniform parameters such as target group and basic functionality. The idea can also be enriched by any attachment such as diagrams or mind maps. In order to compare and rank the ideas, the contributions are evaluated along some criteria such as market potential, value to the customer or novelty to the market. Contestants evaluate their own as well as any other idea by these criteria.

The contest consists of different phases:

First, ideas are contributed and evaluated by the community. After two weeks the contest went on, FSC experts will come into play and start the expert evaluation phase were ideas are evaluated along similar criteria as the community evaluated the ideas. A tag cloud helps to explore the pool of ideas intuitively and your favorite ideas can be added to your personal list in order to keep an eye on their progress. And in the end, the winning idea gets 5000 Euro, plus there are several of the latest FSC laptops to win.

So if you are interested in data centers services, here is the opportunity to shape the future of this industry. http://innovation-contest.fujitsu-siemens.com. I am curiuous to see how this company-driven innovation contest works and which people come up to submit ideas.

Aberdeen Group Report Published: Configuring Profits to Order: Best Practices in Mass Customization in Industrial Markets

A few weeks ago I offered you the chance to participate in a study by Aberdeen Group, a technology research company. Now, the results of this research have been published. The study focused on the use of configurators and customization strategies in industrial markets (b-to-b). Many manufacturers here are seeking to win business by offering their customers products configured specifically for them.

However, capturing and validating exactly what customers want, accurately quoting orders, and still delivering products quickly is challenging. Companies that are successfully addressing these challenges are able to reap the benefits of higher product profitability. Some are even seeing product profit margins improve by up to 80%, just by using configurator solutions.

The research report found, that:

- Best-in-Class reduce write-offs by 26.2 times by minimizing order errors with sales configurators.
- Best-in-Class are 20% more likely to accurately predict costs used to develop quotes for custom products, allowing them to achieve higher profit margins.
- Best-in-Class are 14% more likely to meet the customer’s promised delivery date with design rules to automate the creation of sales and design deliverables
- Best-in-Class achieve higher customer satisfaction by offering 3.5-times as many customizable product features as Industry Average companies
- Best-in-Class are 18% more likely to hit revenue targets with integrated sales and product configurators.

The research found that the biggest performance differentiator of the companies surveyed is in their ability to predict cost. "The key to being profitable is in knowing what the costs will be and developing an accurate, yet competitive quote," the report states. "To accomplish this, companies must look at the unique challenges of their business and implement the capabilities and enablers that will provide more visibility and predictability to cost.”

Another finding also stresses the need of a stringend product configuration system and corresponding product structures. Best-in-Class companies report only US $31,400 in lost revenue due to quote or order errors. In comparison, the Industry Average report write-offs of US $823,900. Best-in-Class companies are better equipped to accurately capture what their customers want and process, engineer, and manufacture the order with far fewer errors. The research concludes:

"Companies who have not deployed a configuration solution will be at a competitive disadvantage and will forego the benefits of higher profit margins. A sales configurator alone can translate to profit margins that are 12% higher. An integrated sales, product and manufacturing configurator solution can mean profit margins that are 21% higher."

Context:
# Download a free copy of the report here.
# Posting about a similar report on the configuration practice of industrial companies.
# Configurator database: Get inspiration by browsing though hundreds of configuration solutions in all industries.

Mass Customization in the Construction Industry: Industry Tour Visits Custom Home Manufacturers in Japan

This sounds like the best of all worlds: "Zero-Energy" and "mass customization" in one home. I met Dr Masa Noguchi, a scholar at the Mackintosh School of Architecture at the Glasgow School of Art on the MCPC 2007 conference, where he was presenting at in the "Mass Customization & Architecture" track.

Masa is doing plenty of research on mass customization of homes, and coming from Japan, he has access to the manufacturers of the leading nation when it comes to the industrial fabrication of highly customized homes (pre fabs 2.0).

His institute is offering a unique field trip ("the mission") to see mass customization in this industry in practice during the

PV ZERO-ENERGY MASS CUSTOM HOME MISSION TO JAPAN 2007, 10-12 September, 2008.

From the announcement:

"The PV Zero-Energy Mass Custom Home Mission to Japan 2008 is aimed at offering industry professionals, academics and government officers opportunities to visit not only the state-of-the-art production facilities of five leading housing manufacturers in Japan, but also the sales center where a number of model homes are displayed allowing potential home buyers to examine the quality.

The mission also extends its visit to an existing solar community that consists of 100 prefabricated homes that are usually equipped with solar photo voltaic power generating systems. During the 1960s and 1970s, Japanese housing manufacturers focused solely on the mass production of their products, resulting in a supply of virtually identical, rather monotonous houses.

Due to the inferior image associated with the low-quality appearance of these mass produced houses, the public immediately rejected industrialized homes. Since then, the manufacturers have placed greater emphasis on improving housing quality, and thereby customer satisfaction, such that Japanese housing manufacturers today enjoy a reputation for providing reasonably-priced quality housing that, while still mass-produced, is customized—i.e. mass customization.

Japanese housing manufacturers are successful in commercializing their industrialized houses that are often equipped with a PV system, as a standard feature rather than options. In fact, between 1994 and 2003, the number of domestic PV installations in Japan drastically increased from 539 to 52,863 houses. Although the country has been experiencing the negative fluctuation of housing starts over the last few years, the PV housing manufacturers express their confidence in the increase of their sales for years to come.

The mission corresponds with the global market needs and demands for housing of today and tomorrow and helps the participants gain the knowledge of contemporary housing technologies being implemented for the commercialization of marketable and reproducible zero-energy houses.

For more information, please look in this PDF file with more information, or contact Dr Masa Noguchi, Mission Coordinator, at m.noguchi@gsa.ac.uk. Or go here for more information: http://www.masscustomhome.com.

Design & Configuration of Complex Products -- Insights From DTU's Product Modeling Group, one of Europe's leading centers on the mass customization

Lars Hvam and his colleagues at Denmark's Technical University (DTU) in Copenhagen have built one of the world's leading research groups in the area of product configuration and modular product design. Their approach is that you not just should build a configurator or sales system for your existing products, but hat successful configuration and mass customization demands a dedicated modular product architecture that should be developed together with the configurator.

Their work is very much driven by industry input. Lars chairs a huge industry interest group with more than 40 company members, many of them world market leaders in customization. The group is one of the strongest pillars in our community of mass customization researchers, and you have two chances to interact with them in the next weeks -- and a new book is summarizing their recent research:

(1) Industry Meeting on "Product Modularization & Variety Reduction" on Jan 31, 2008 in Copenhagen.

The presentations at the meeting will include experiences from applying the principles of product modularization for managing and reducing the number of product variants at Rolls Royce Marine, Siemens and LEGO - see the agenda and register for the meeting at this link. All presentations will be held in English!

(2) PETO’08 Conference on Service customization

As reported before, Kasper Edwards and Lars Hvam from the Technical University of Denmark are hosting this European MC event in 2008. More information here.

(3) Product Customization - A New Book by Lars Hvam, Niels Henrik Mortensen, and Jesper Riis

From the abstract (I have not received the book yet, so this is just an announcement, not a review):

For the majority of industrial companies, customizing products and services is among the most critical means to deliver true customer value and achieve superior competitive advantage. The challenge is not to customize products and services in itself – but to do it in a profitable way. The implementation of a product configuration system is among the most powerful ways of achieving this in practice, offering a reduction of the lead time for products and quotations, faster and more qualified responses to customer inquiries, fewer transfers of responsibility and fewer specification mistakes, a reduction of the resources spent for the specification of customized products, and the possibility of optimizing the products according to customer demands.

This book presents an operational procedure for the design of product configuration systems in industrial companies, based on the experience gained from more than 40 product configuration projects in companies providing customer tailored products and services.

Published by Springer. ISBN: 978-3-540-71448-4

For any further information in any of the topics above, just contact Lars directly:

Lars Hvam, Chairman of the Association for Product Modeling
Department of Manufacturing Engineering and Management
Technical University of Denmark
lhv@ipl.dtu.dk

MC Configurator Database Went Live - Great New Portal Provides Comprehensive Overview of Mass Customization Offerings

Additional Site Feature: MCPC 2007 video interviews with Joe Pine, Stan Davis, Mitchell Tseng and many other ...

The unpublic beta was one of the best kept secrets in the mass customization world of the last months --- now it is public: The huge database of configurators (co-design toolkits) compiled by Paul Blazek and Wolfgang Frühwirt and their team at Cyledge.com, a Vienna based consultancy in the field of configurators.

What is a configurator? Well, "simply put, a configurator is a software application for designing products exactly matching customers' individual needs", the site says. As they further explain, configurators can be found in various forms and different industries. They are employed in B2B as well as B2C markets and are operated either by trained staff or customers themselves. Whereas B2B configurators are primarily used to support sales and lift production efficiency, B2C configurators are often employed as design tools that allow customers to "co-design" their own products.

What Paul and Wolfgang do not is to document configurator software providers, but real configurators on the web ... more than 500 of them. All arranged in a nice database sorted by more than 85 criteria, including

- Steps to starting (distance to the configurator, number of web pages the user has to go through in order to get to the configurator (distance from the Homepage)

- Process navigation

- Module library (pre-customized products are available for further customization)

- Automatic completion (The configuration process can be continued even if the user ignores a required decision during the configuration process. The system completes the product automatically, meaning that the user doesn’t need to edit every step in order to continue the process)

- Loading Time (under 15 Seconds)

- 3D-perspective exists allowing the user to rotate the product picture 360°. (yes/no)

- Delivery time

- Weaknesses of the site as seen by the evaluator.

Well, for the public version they just reveal about ten criteria, but this already provides plenty of benefit. You get a great overview of what is available in the world of mass customization: Did you know that there are six custom offerings for pets, 15 for children stuff, 37 configurators in the construction and building industries? Their rubric "most exotic configurators" list Sonor GmbH & Co. KG (custom drums), our friends from Elite Vintners (custom wine), Alois Reich (custom dirndl), Brewtopia (custom coasters), Tiny Pocket People (custom pocket dolls), or A.H.Beard Pty Ltd. (custom beds for children).

And there is much more, over 50 pages of listings ().

On top, the site has a nice blog (with some re-postings from my blog), a conference database, and a great library of short videos with key persons in the mass customization world. See my interview with a spectacular multimedia trick :-), or here wiser voices like Joe Pine, Mitchell Tseng, or Stan Davis himself ... the person who has coined the term mass customization:

Most of the videos were taken at the MCPC 2007 Conference. For many more videos go to the configurator-database.com site.

Full disclosure: I am a scientific advisor of this project and the sponsoring company, cyledge.com.

Rapid Manufacturing for Mass Customization: Good Report in DESIGN NEWS Analyzes Recent Development

Joseph Ogando, Senior Editor of DESIGN NEWS, a trade publication, recently published a great feature article on “ Rapid Manufacturing's Role in the Factory of the Future”.

It reports on the use of laser sintering and similar direct manufacturing technologies not just to make prototypes but also to turn out production parts. It’s a practice that goes by many names — including rapid manufacturing, direct digital manufacturing, solid freeform fabrication and low-volume-layered manufacturing. All of the names refer to the use of additive fabrication technologies, which were initially intended for prototyping, to make finished goods, instead. Rapid manufacturing is considered to be one of the main enablers of mass customization of the future.

The report has a number of nice case studies and analyzes the main challenges or rapid manufacturing:

The biggest barrier in the coming years is seen with regard to materials. Some additive parts simply don’t measure up to their molded, machined and cast counterparts when it comes to tensile and other mechanical properties. … Another material issue involves freedom of choice. With additive technologies, engineers currently have to settle for a limited materials line-up. But as the article shows, the scope of applicable materials is fast growing.

A second barrier is seen in the persistent lack of design data. “it’s not so much that current prototyping materials have some shortcomings as the fact engineers have no way of knowing exactly what those shortcomings are.” The article cites a lack of long-term creep and environmental data for additive plastic parts and fatigue data for metals as the most glaring examples of this data deficiency. But rapid manufacturing observers expect more and more data will become available as direct digital manufacturing becomes more popular. In the meantime, large OEMs with stringent manufacturing requirements have worked to develop their own property data.

A third barrier quoted in the report are the capabilities of the existing machinery. Making good production parts every day ups the ante on process repeatability, quality control, throughput and reliability. “Today’s additive fabrication systems aren’t completely ready for prime time. They’re still primarily prototyping machines that you can coax into working as manufacturing systems”´, an industry expert is quoted in the report.

But despite these limitations, the article comes to a positive conclusion:

“With all these factors weighing against direct digital manufacturing, you might wonder, why bother? But, these additive systems already offer design benefits that can offset their manufacturing limitations.

For one, additive machines can produce complex part geometries without regard to conventional manufacturing limitations. Additive fabrication methods based on powder metal beds, for example, can enable parts with interior cavities and features that could not be machined or cast — at least not in an economical one-piece part. ... The upshot of all this design freedom, and the benefit most cited by advocates of direct digital manufacturing, is parts consolidation.

How long will it take for engineers to recognize the design benefits associated with additive processes? Todd Grimm, a consultant to the rapid prototyping industry, thinks it could take 10 or even 20 more years given the current lack of familiarity with additive machines and the technical barriers associated with the machines themselves. …

For a handful of applications, though, the future is now. The best known and highest volume direct digital manufacturing niche has, so far, involved applications where mass customization plays a role. 3D Systems’ Reichental points to the hearing aids as one example and also says RM machines have seen use in the production of casting tools for Invisalign braces. And as the additive machines in general become more capable, … they’ll play a stronger role in other kinds of customized medical and dental devices whose geometry is tailored to the requirements of individual patients.”

Context:
- Read the full article here: Joseph Ogando, Rapid Manufacturing's Role in the Factory of the Future, Design News´, 26 July 2007

- Other reports on rapid manufacturing in this blog.

- Browse the program of the MCPC 2007 to explore talks and presentations on rapid manufacturing during the conference.

CATER - Mass Customization in the Automotive Industry: New European Project Wants to Shift Auto Customization to a New Level

Free Workshop in Nice Will Present First Results on Sept. 11, 2007

CATER is a 3-year collaborative research project launched in September 2006 and supported by the European Commission aiming at developing innovative ICT tools and methods for mass customization of vehicles as well as new approaches to automotive design principles. The research consortium includes 14 major European and Asian organizations in the field ranging from vehicle manufacturers (VOLVO, FIAT), OEMs (IC:IDO, Imartis, etc.) to research centres and universities (Fraunhofer, CERTH, University of Nottingham, Nanyang Technological University, Universiti Malaysia Sarawak, etc.).

CATER introduces systems and methodologies that go beyond the traditional approaches of automotive OEMs and in which design is driven by cross-cultural and emotional aspects of customer needs. This is enabled through integration of innovative ideas from diverse expertise of both Europe and Asia. The project also advocates networked business in the automotive field, aiming at a better integration of stakeholders (from OEMs to customers) within the supply chain, to support product planners and designers; while the customers can design their own vehicle via a VR interface in a 3D Web environment.

The image on the left illustrates the various expected benefits brought by CATER to the different stakeholders (click for full scale).

To reach its overall objective of enhancing MC in the automotive industry, CATER will develop according to its work program (see second picture on the left):

“- A semantic notation system, used by engineering teams addressing customers citarasa (Note: Citarasa is a Malay term that refers to emotional intent and aspirations).

- A citarasa engineering methodology, involving elicitation of customer expertise and citarasa in vehicle purchase, and mapping these to vehicle design by concurrent engineering team.

- A teardown database for product development & benchmark for both manufacturers & suppliers.

- A ‘Do-it-Yourself’ design system, powered by citarasa to support customers’ configuration tasks.

- A database architecture based on the previous components supporting the n-business paradigm.”

The CATER workshop

CATER is organizing its first dissemination workshop on September 11, 2007 in Nice (France) to present its first results as well as discuss the state-of-the-art in mass customization of vehicles.

Speakers from the automotive industry will introduce their views in the workshop with regard to new design and vehicle customization principles while several innovative aspects of the CATER project will be presented, such as: the Citarasa Engineering Approach (emotional design concepts), the Web Based Do-it-Yourself-Design system for self-customization of vehicles and VR Interfaces for the customers and the automotive manufacturers product planners, which are the main objectives of the project.

Participation is free but pre-registrations are compulsory.

Note: The MCPC 2007 conference at MIT in October 2007 also will feature a special track on mass customization in the automotive industry, including a presentation on this project.

Report on State of Mass Customization Implementation and Cost Drivers

Only 67% of BTO/ETO manufacturers know how much it costs to produce customized products, and 73% don't know the cost of engineering change orders

A new report on mass customization and build-to-order manufacturing has recently been published by Cincom Systems, a manufacturer of configuration and quote-to-order solutions. The study is based on 72 interviews with senior engineering managers at manufacturers of complex industrial, electrical, and transportation equipment and systems between January and February 2007.

While such an industry-driven report is biased by the perspective if its sponsor (and also its interview base is pretty small and probably not representative), the study contains a number of interesting data which, from my experience, represent the state of many companies offering customized industrial products (b-to-b).

The report found that only 67% of build-to-order and engineer-to-order manufacturers know how much it costs to produce customized products, and 73% don't know the cost of engineering change orders. Only 27% had figured out the cost of engineering change orders. But despite the lack of cost information, more than half of the survey respondents believe that they have the ability to charge a 10-25% or higher premium with a product customization strategy.

Customization rates will increase in the future

The disconnect between pricing assumptions surrounding product customization and traceable costs becomes a barrier to sustaining momentum with mass customization strategies into the future. This is especially true as the broad majority of managers interviewed by Cincom for this report state that requests for customized products have been increasing over the last five years, and 26% anticipate that the growth rate will be between 25% and 50% in the next two years. Managers quote the following corporate objectives which are driving customization efforts (in ranked order of importance): (i) Meet specific customer requirements, (ii) Demonstrate product leadership, (iii) Improve positioning against lower-cost competitors, (iv) Improve internal efficiencies, and (v) Enhance margins or price premiums.

Some other key findings, as quoted from the report:

“Product customization strategies are predominantly relied on by manufacturers to both increase production efficiencies at the low end of their product lines and drive up premium pricing at the high end. 73% of total respondents see product customization as critical for products over $100,000; 25% also see them as critical for products under $1,000.

There is a significant knowledge gap between what engineering needs to contribute to a mass customization strategy and what existing systems are delivering. While only 50% of respondents use any type of software for managing the product customization processes, 56% do not have service information, 55% do not have catalog and selling information, and 50% do not have product development information critical to support product customization.

One of the greatest risks to mass customization is the intensive amount of intellectual capital that engineers have, yet it is not captured anywhere (64%). Additionally, 35% of respondents report that there is no method in place for sharing knowledge throughout the company.”

Automated Product Configuration

The study asked managers about the tools they use to support mass customization. Not surprisingly, CAD is the primary tool used to support the customization process (92%). The implication is that the customization process is primarily drawing-driven based on tribal knowledge with heavy engineering involvement in the specification process. Beyond the CAD system, most manufacturers are using ad hoc technologies such as spreadsheets (51%) or manual processes supported by documentation (41%) to support the customization process. Few companies utilize automated configuration systems. Of those who do, 30% use homegrown systems and only 24% use third-party packages.

These numbers indicate that there is rather little integration of tools within the customization process, and the level of integration decreases significantly as you move from manufacturing (ERP at 30%) through engineering (CAD at 24%) into the sales channel (Selling Systems at 14%). The lack of integration implies that there is a significant amount of manual intervention within the customization process requiring time and resources, and leaving opportunity for errors.

Barriers to Mass Customization

According to the study, most engineers believe that product complexity is not the primary barrier to customization. They cite lack of knowledge of options by the customer (67%) as the primary barrier to customization efforts. The implication is that the knowledge required to effectively sell customized products is not being effectively transferred to the customer. This is not surprising given the often technology-focused implementation of configuration systems. There are huge opportunities for improvement in sales and operational effectiveness to be gained by addressing this issue. Of the surveyed respondents, 43% indicated that inadequate systems are also a barrier to customization.

As written before, these numbers and findings have to be interpreted from the perspective of its originator: a company selling exactly those systems to improve the gaps identified in the survey. But despite all sales buzz, the study shows that many companies still have a long way to go to change their (craft) engineer-to-order systems to true mass customization operations.

Context:
Download the report.

A special issue of the IJMassC (4/2006) has a number of case studies that demonstrate how MC pioneers closed these gaps. Read especially the paper by Lars Hvam on the configuration system of APC, a provider of data center equipment.

Recent Partnerships and Acquisitions Provide New Infrastructure For Launching Instant Mass Customization Offerings

It gets easier and easier to open an instant mass customization company. You have a great idea or design that you want to offer customized? But you do not want to mess up with manufacturing, fulfillment, or building a configurator? You are either a large existing brand, mass producer, or an individual consumer?

Never mind, a new bunch of mass customization enablers is helping you to set up instantly a mass customization value chain from design to delivery with a few clicks. Well, this is at least the promise of a number of mass customization enablers that can change the mass customization game.

A partnership by DemandMade with Exclusive Pro and the acquisition of Confego by Zazzle (see the previous two postings) have created integrated mass customization fulfillment systems in the US that can be utilized easily to open a MC or personalization business. Leipzig, Germany, based Spreadshirt offers a similar integrated value chain for the custom apparel business, with a smaller solution space, but an even easier interface to create your own mass customization business.

Years earlier, Germany based Human Solutions already have provided a similar integrated supply chain for custom garments including also custom fit and mass-bespoke tailoring. Their system, however, was based on more formal contracts and a traditional franchise system. It was not as easy to set up as your own customization web store at Spreadshirt or Zazzle.

I am curious to see how these ventures will play off and what kind of services will be enabled in the future. It never has been easier to open a mass customization business … what is happening here is the creation of a common infrastructure, think of a mass customization operation system that enables instant companies and user manufacturing in these domains.

So use these capabilities to create your custom world.

Context:
- Mass Customization Enablers I: Zazzle Acquires Confego to Move the Company beyond BtoC Customization Business
- Mass Customization Enablers II: DemandMade & Exclusive Pro Create Partnership to Deliver a Complete Custom Apparel Solution for Online Retailers
- User Manufacturing: The trend and developments

Mass Customization Enablers II: DemandMade & Exclusive Pro Create Partnership to Deliver a Complete Custom Apparel Solution for Online Retailers

Zazzle-Confego is not the only new partnership this spring. Also the second specialized mass customization enabler in the US, DemandMade , announced a new cooperation to provide a seaming less mass customization value chain by integrating product configuration with a domestic factory & fulfillment.

Hermitage, PA, based DemandMade provides technology and managed services for the complete mass customization value chain including consumer brands and retailers who wish to configure and offer personalized or mass customized products and factories who assemble made-to-order consumer products. The company was founded in 2005 by eBusiness veterans Scott Killian and Tim Brule, who pioneered eCommerce outsourcing when they launched FanBuzz in 1996 and the mass customization process CustomFan in 1999. One of the first online applications of mass customization, CustomFan was used to operate successful online merchandising programs for such brands as Coca-Cola, the National Hockey League, Peanuts, ESPN and the 2002 Olympic Games. The pair later sold FanBuzz to the television shopping network ShopNBC in 2002.

Last week, DemandMade has entered into a partnership with Rockford, IL, based Exclusive Pro, a provider of domestic apparel embellishment and fulfillment services specializing in retail programs using mass customization and personalization. Exclusive Pro's capabilities include full-service, single-piece tackle twill processes (twill, felt and leather), embroidery, heat transfer applications and private labeled fulfillment of single piece orders that are produced on-demand.

“We’ve combined a suite of Web-based tools specifically designed for apparel retailers with a domestic factory that is already using our platform to produce and fulfill single-piece orders,” said Scott Killian, DemandMade CEO, in a press announcement. “The result is a comprehensive solution for online retailers who want to launch a customized apparel or soft goods program.”

The combined offer uses an AJAX-based product configuration engine designed specifically for apparel items that online retailers can integrate with their existing online stores to offer personalized or custom apparel products. On the backend, the configurator is integrated with Exclusive Pro’s domestic production and fulfillment facility -- a complete solution that provides retailers with everything they need to launch a custom apparel program.

Terry Taylor, President of Exclusive Pro, says about his motivation to enter this partnership, “We have a long history of producing orders for single piece garments. However, the demand for our services has shifted dramatically in recent years to online retailers where the dynamic nature of these products can best be presented. This partnership with DemandMade effectively ensures continuity between the online experience and the production process.”

To see an example of the new product configurator, visit www.scenicstore.com/example

Mass Customization Enablers I: Zazzle Acquires Confego to Move the Company beyond BtoC Customization Business

When Brennan Mulligan, founder of Confego, told me that he sold his company to Zazzle, this transaction made a lot of sense for me. With Confego, Brennan had helped other companies like Nike, Rebook, or Timberland, to open mass customization businesses, based on the experiences he gained by working at Timbuk2, the messenger bag customizer, going into business more than 12 years ago (Timbuk2 was founded by Rob Honeycutt).

Confego, a San Francisco Bay Area-based company, has helped in the past years large retail brands to offer customizable versions of their products. The company's primary role is to build and maintain supply chains that are optimized to source customized products quickly and efficiently. While Confego also provided a proprietary, web-based order management software to link contract factories directly to client web sites and other points of purchase, their special focus was more like a boutique consulting firm, helping big brands to understand mass customization in lager detail.

And Zazzle? Like Cafepress or Spreadshirt, at Zazzle http://www.zazzle.com anyone can create and share one-of-a-kind products like apparel, posters, and greeting cards. Zazzle combines on-demand manufacturing, an online community, a huge collection of customizable digital images and different toolkits to empower consumers to create their products. In addition, individuals can choose to become contributors by sharing their unique creations in Zazzle's public galleries. Within these galleries, anyone can browse, comment and connect with others who share their interests. Contributors also earn royalties every time their creations are purchased by others.

So how can this consumer playground ( “Internet's Creativity Marketplace(TM)” is Zazzle’s claim) match to Confego’s boutique BtoB focus? Well, the core of both companies was to enable others to sell custom products, either brands or individual users. And both companies did utilize existing brands: Confego helped large mass production brands to go customization. Zazzle played with brands twofold: First, they used big entertainment brands as part of their merchandising strategy to offer branded images of cartoon characters, movies, etc. Secondly, they created the user brands: Create your stuff, name it, and sell it to everyone.

The Confego acquisition by Zazzle now combines these areas. As a result, Zazzle arrives as a great enabler of customized brands, on the retail, consumer, and merchandising level. And so the press announcement is full of joy:

"This relationship marks the beginning of a new generation of customization for Zazzle," said Robert Beaver, CEO and co-founder of Zazzle.com. "New brand partnerships mean new choices for our customers who are always looking for better means of self expression."

"The creativity of the Zazzle community is a perfect fit with our current offerings," said Brennan Mulligan. "Consumers have come to expect more for their money. The growing availability of fast, easy and affordable customization is empowering shoppers to get exactly what they want, without being force-fed what designers are offering."

And Zazzle gained more: Confego co-founders Brennan Mulligan and David Gross will become part of the Zazzle team. As a pioneer in the field of customization, Mulligan will help Zazzle achieve limitless customization that provides consumers a unique finished product almost immediately and at an affordable price. Confego has perfected the manufacturing and fulfillment process, allowing delivery of custom shoes in just one week, as opposed to the three to five week lead time currently provided from similar vendors. Confego also brings expertise in the customization of the construction of products, including cut, color, fabric choice and custom embroidery.

Personalization in Health, Food, and Pharma

IEEE Workshop on Personalized Health Informatics in London, UK January 24-25, 2007

One of the major fields of growth in mass customization & personalization is the health sector. The traditional system is focused on "block buster" pharmaceuticals (= standard mass products) and the care-taking of "illnesses". A new approach is to personalize medicines (pharma-cogenetics) and to develop customized nutrition, wellness offerings, and fitness / training programs to match individual requirements.

During the upcoming MCPC 2007 conference, Personalization in Health, Food, and Pharma will be a special track !

The IEEE, a main standardization body, has now initiated a new working group to develop an comprehensive set of solutions for that shall "facilitate the development and usage of a comprehensive set of Internet-based tools that place the individual (and his/her dependents) at the center of an encompassing architecture of services that promote and enhance health."

Thanks to MadeforOne.com I learned about this group. I think that this kind of joint collaborative activities are what it needs to push mass customization further.

Jose C. Lacal, one of the group co-chairs and a Sr.Manager at Motorola's Seamless Health Center of Excellence, described the objectives of the group as follows:

"There is a need for Personalized Health Informatics (PHI) systems to manage all the relationships that influence an individual's health. This standard is geared towards optimizing an individual's health, mostly outside of the scope of a health care provider. This standard is not about personal health records (that is being address already by many other organizations). This proposal is to create a "family health dashboard" where all relevant information (nutrition, environmental issues, published research, etc.) are brought together in an easy-to-use tool to enhance a family's health. Most people would be familiar with a 'financial dashboard.'

There is an open call for participation at the first workshop of the IEEEP2407 working group. At a time when health delivery systems worldwide are under enormous strain, IEEE2407 is designed to provide consumers with the tools to both stay healthy and to improve their health.

The workshop will take place on Wednesday and Thursday, January 24 and 25, 2007 in London, UK. The workshop will be hosted by Motorola and Kingston University's Mobile Information and Network Technologies Research Centre (MINT@K).

The latest agenda is available at http://www.ieee2407.org/files//ws01_agenda.pdf

More information at http://www.ieee2407.org/ws01.html. For those unable to attend, a conference telephone bridge will be provided via e-mail once you register.

Outside Innovation: New book by Patricia Seybold builds a bridge between open innovation & mass customization

Outside Innovation: How Your Customers Will Co-Design Your Company's Future, by Patricia B. Seybold. New York: Collins, October 2006. ISBN: 0061135909, about 26$.

This book review has been overdue for more than two months when I got the pre-version of Patricia Seybold's new book, "Outside Innovation". I immediately read it with very large interest, as Seybold is one of the authors I have quoted often in my own books. In her bestselling title 'Customer.com', she provided a great analysis of how the internet is changing consumer markets. So meeting her here in Boston for several occasions in the past year and discussing with her some ideas of her new book was a great opportunity. Here is the result of her recent research: In "Outside Innovation", Patricia Seybold provides one of the first general-management books on co-creation of value between firms and customers.

Well, there have been other books on this topic before (starting with the great, but today almost forgotten book by Rafael Ramirez and Richard Norman on Value Co-Creation [1994: 'Designing Interactive Strategy'], Prahald & Ramaswamy's [2003] highly abstract book on customer co-creation, and of course Eric von Hippel's [2005] fantastic review of three decades of academic research on user innovation in 'Democratizing Innovation'.

But Patricia Seybold's book is full of great and very up-to-date case studies that make the idea of value co-creation really lively and accessible. She describes (in great detail and with plenty of background information) many classic examples like Lego's co-development of the new Mindstorm toy, Threadless, Flickr, BBC Backstage or National Semiconductor, but has also some great new (at least for me) examples of customer-centric innovation like the development of a new fitness machine (Koko Fitness – great story and concept) or SEI Wealth Networks.

And her pitch line why her book is important tackles one of the main problems of integrating customer and users in a firm's innovation process:

"The good news is that customer-led innovation is one of the most predictably successful innovation processes. The bad news is that many managers and executives don’t yet believe in it. Today, that’s their loss. Ultimately, it may be their downfall."

I hope that her books can support more mangers to consider customer/user integration not only as a nice add-on pilot initiative, but to make it a crucial part of the company's core strategy. The book, however, offers no recipes or frameworks how a manager could do so. Its core contribution is to document and describe what is happening in a world that is not any longer dominated by companies creating things FOR users. And as Seybold does this in great detail and style, this record of promising practices may convince managers to turn away from old prejudices.

Patricia Seybold bridges in her book between innovation and operation, between users and customers, between leading edge contributors and average customers. Eric von Hippel strongly differentiates between these levels. He argues that for functional novel innovation, firms have not to listen to their present customers but to search for "lead users" who face a specific need ahead of the market and have turned this need already into a solution for themselves. In many cases, these lead users are in a different domain than the manufacturer and are not its present customers. Gathering input from lead users thus is totally different to market research methods of any kind.

Seybold uses the term "lead customer" to describe a group of a firm's current customers who are truly innovative: "These may not be your most vocal customers, your most profitable customers, or your largest customers. But they are the customers who care deeply about the way in which your products or services could help them achieve something they care about." Getting their input may also be the result of a more conventional market research approach.

This distinction is worthwhile to note when you read the book. Otherwise, without previous knowledge, you may get a bit confused where in her cases real innovation starts and more general customer-focused business strategies end. But as she argues, this is exactly the beauty of co-designing with customers: You start with some small steps, perhaps within the context of a mass-customization-toolkit, and suddenly your customers want more and get motivated to innovate on their own.

My conclusion: A book very worthwhile to buy and read. Its great collection of case studies will inspire you to look for more and deeper information on this topic – or to start to brainstorm immediately how you can benefit from the creative potential of your customers.

For abstracts from the book and an insight into the cases, have a look in Patricia Seybold's blog, http://outsideinnovation.blogs.com.

Mass Customization Case Study Collection -- New Issue of the Mass Customization Journal Published

A new issue (No. 4, Vol 1) of the International Journal of Mass Customization has just been published (see here for more general information). This issue is a special CASE STUDY issue containing eight cases from the International Mass Customization Case Collection, an initiative of more than 25 international researchers collaborating to build a broad basis for empirical research on mass customization. The idea of this project, coordinated by Klaus Moser at TUM, is to document current practices of mass customization businesses in a form that allows rich cross-case analysis and learning from previous experiences.

We are happy that we now can present the first eight cases of this collection in one issue, starting with three cases of mass customization of industrial goods:

* APC, a provider of data centre infrastructure from the US and Denmark,
* MarelliMotori, a manufacturer of electric motors from Italy,
* F.L.Smidth, a Denmark-based manufacturer of complex process plants for the construction industry.

Then, three case studies from the footwear industry provide the opportunity for cross-case analysis in one industry:

* Adidas, an international manufacturer of sports goods based in Germany,
* Left foot, a Finland-based worldwide operating provider of custom men’s shoes, and
* Design&MC Lab, a research lab and model plant for the mass customization of footwear based in the Italian shoemaking capital, Vigevano.

The two remaining cases focus on special objectives connected with the implementation of a mass customization strategy in business-to-consumer markets:

* Steppenwolf, one of Europe’s leading manufacturers of custom bicycles, and
* Turo Tailor, a Finnish manufacturer of apparel (men’s suits).

See here for authors and abstracts of all cases.

Full text access to the cases demands a subscription of the journal. But: Due to the cooperation with the publisher, we now can offer to all past participants of our conferences (MCPC, Deutsche MC Tagungen, IMCM, etc.) full online access to all issues for a very (really!) good price. Please contact me for more information and to get the special subscription form. Disclaimer: I am neither the publisher of this journal nor do I profit in any form from its sales or subscriptions.

Related posts on this topic:

- First issue of IJMassC published
- Special issue on Customer Centric Enterprises published

PS: We are extending this collection. If you want to contribute a mass customization case, please contact me as well (Important: Cases have to be contributed by independent scholars, not by members of the case company described!)

US Think Tank CED Demands Openness to Foster Innovation: Open Source Software, Open Standards, and Open Innovation Promote Economic Growth

The discussion of the underlying core principle of open innovation -- free access to existing knowledge to reuse this information for new problem solving in another domain -- interferes very often with the existing regimes of Intellectual Property Law, which are one of the main hurdles of open innovation. Thus, the new report 'Open Standards, Open Source, and Open Innovation: Harnessing the Benefits of Openness' by the Committee for Economic Development (CED), a business-led public policy group, got my interest. In this group, 200 large US corporations (!) demand more openness of intellectual property. This is a very important debate, and if you want to benefit from open innovation, you should care about it!

Here is a summary of the report by PR Newswire :

Increased openness in the creation of computer software and other digital information products is needed to foster further innovation and economic growth for both the United States, and for the global economy, warns CED in a new report.

"Open standards are needed for digital technology to continue to develop and create economic growth in the information age," said Paul Horn, Senior Vice President Research, IBM Corporation. "Additionally, open innovation is propelling change in commerce beyond the borders of software and information technology, even into physical goods," Mr. Horn continued.

The report calls openness "an underlying technical and philosophical tenet of the expansion of electronic commerce" that will "cause transformations in the economy and society." Digitization of information and the growth of the Internet have profoundly expanded the capacity for openness, which can be viewed largely as a function of the accessibility and responsiveness (meaning the ability of anyone to make modifications) of a work or process.

Recommendations of the report include:

OPEN STANDARDS: Governments should encourage the development and use of open standards through processes as open to participation and contribution as possible. The DCC believes that the participation of civil society would be beneficial in the formation of standards with important social consequences. Support for open standards has grown dramatically in recent years, but issues surrounding intellectual property claims threaten their development. Perhaps most troubling, firms have a perverse incentive to wait until an open standard is widely utilized before asserting an intellectual property claim, so as to maximize revenues from licensing or from damages. The DCC recommends that incentives be created to induce the early disclosure of intellectual property claims, and that consideration be given to progressively limiting recovery by a firm asserting infringement as time elapses from the adoption of a standard. ...

OPEN INNOVATION: The combination of the internet and the growing importance of digital information products is changing even the organization of creative enterprises and enabling new processes of innovation. Perhaps most striking is the extraordinary increase in "peer production" of digital information products. Many, if not most, of the pages accessible on the World Wide Web are posted by individuals with no expectation of monetary gain. The online encyclopedia Wikipedia is the result of contributions from thousands of individuals, as are the buyer and seller reviews on eBay. "Open science" is making scientific information available well beyond the subscribers of traditional scientific journals.

To foster open innovation, the report recommends federally funded, unclassified research should be made broadly available. The CED recommends that any legislation or regulation regarding intellectual property rights be weighed with a presumption against the granting of new rights. The burden of proof should be on proponents of new rights to demonstrate with rigorous analysis the necessity of such an extension, because of the benefits to society of further innovation through greater access to technology. Finally, the Council suggests that the National Science Foundation fund research into alternative compensation methods, similar to those created to facilitate the growth of radio, to reward creators of digital information products and accommodate the changes brought about by the digitization and growth of the Internet."

The full report can be downloaded here: http://www.ced.org/docs/report/report_ecom_openstandards.pdf

Custom Wine Making: Elite Vintners

How a modular system brought mass customization to the Canadian Wine Industry

Frequently asked, what is the next big market for mass customization, I always include food in my answer. While difficult to process, only few goods are so crafted for customization. Package size, ingredients, functionality, allergies, preferences, and of course taste are just some of the options where customization can start [One of our former researchers in the TUM Mass Customization Research Group, Stephan Jäger, even wrote his Ph.D. thesis on mass customization of food (thesis in German language)]. But not too many applications are known today.

So I was very much surprised when I learned about Elite Vintners, a Canada based company providing custom wine on the internet. While wine may only classify as food in France, it is a product perfectly suited for customization for the same reason, given all the different preferences and taste. And I was really impressed by this company's approach to customization. They created an online configurator, a real toolkit, to customize your next bottle of wine: www.elitevintners.com. This toolkit is remarkable as it is one of the very few toolkits which enter the field of taste which is much more difficult to describe and customize as fit or functionality (a similar toolkit is IFF's toolkit for industrial food flavors, described in a paper by Stefan Thomke and Eric von Hippel). In the US, Crushpad from San Francisco offers a similar service, but based on personal selling, not an internet configurator of the kind of Elite Vintners.
While for Europeans this kind of blending and mixing of wine concentrates, yeast, an oak "flavors" is still a bit strange, the system just replicates the normal way of wine making in many "new world" wineries. The company purchases high quality grape concentrate, and allows you to mix different grapes, an appropriate yeast and a mix of two oak additives from a large selection of strengths. And, for amateurs in wine making like me, the most impressive option was the alcohol content: You can even choose on a slider how much alcohol you want to have in your custom vintage. Of course the wine is bottled with your custom label and your own brand name on it. And finally, you will be surprised how affordable your custom collection is.

Just have a look on the toolkit and play around. But if your experience is more in drinking than in customizing wine, you may fell as I did: Overwhelmed and puzzled how your custom blend might really taste. Obviously, a web-based system can not offer a simulation of the outcome, but there could be a bit more references and indications, or perhaps a pre-configuration of popular blends with an exact description. The present target group of Elite Vintners are more mature and experienced home wine makers (see http://www.winepress.us or http://www.makewine.com for two user communities of this kind). And for this group, the toolkit and especially the stable and fully automated production process controlled by the toolkit offers a great opportunity to get their own creations in high quality. So cheerio on the next trend in mass customization!

Update: The Roots of Custom Wine Making

After I published this posting, I got great feedback by Tim Vandergrift of Winexpert Ltd, another supplier of custom wine making in Canada. Mr. Vandergrift mentioned that by reading the blog, he thought "Well, mass customization is exactly what we are doing for years" and was so kind to explain me the process of modularizing wine and condifuring at the point of sales:

"The consumer winemaking industry centres around a number of Canadian firms, and relies heavily on the mass customization paradigm. To give some background, the consumer-produced wine industry represents 20% of all wine consumed in Canada, both domestic and imported, and represents in excess of $300 million CAD at retail. Two provinces, British Columbia and Ontario, allow ‘Wine On Premise’, essentially personal wineries where customers may purchase a wine ‘kit’ (unfermented must, the raw material for wine) and contract for the production of small batches (typically 23 liters or roughly 30 bottles). The rest of the country has consumers purchasing the product and removing it to their homes for fermenting and processing.

Our company, Winexpert, produces wine kits equivalent to over 25 million bottles of finished wine every year. Where our mass customization comes in is in both the extent and variety of the product lines, the consumer packaging options (bottles, labels, capsules, etc.) and the value-added services and goods offered—wine related hardware and service items, custom barrel ageing, cellar planning, etc.

Customers begin their process by choosing the kind of wine experience they want by selecting the type of wine they wish to consume: we have five different value levels of kits, which lets the consumer choose not only the cost per bottle of their batch, but also the ageing curve: value-priced kits drink well relatively young but do not offer significant long-term ageing potential, while higher-end kits are less rewarding to drink immediately, but reward ageing with higher quality.

Because we source raw materials from wine regions all over the globe, we can offer French, California, Chilean, South African, Australian, etc, versions of the same varietal (i.e., the customer can choose between a muscular, fruit-forward Australian Cabernet Sauvignon, or the leaner, more elegant and structured French Cabernet) or even single-vineyard designated wines, such as Stag’s Leap Vineyard Napa Valley Merlot.

Outside of the ability to choose from over 70 different products in our line, the customer is able to choose a wide variety of packaging options, bottles come in different size, shape and color variations, there are thousands of pre-printed labels available, as well as partially printed stock labels that allow for either in-store overprinting of custom images and text, or at-home use. Bottles and labels are complimented by matching (or contrasting) capsules to finish the look of the package. This integrates a personalization element into our customization effort."

Re-Post: Mass Customization of Software (from the MC Newsletter 2/2004)

Re-Post: I have republished these articles to make them better accessible for search on the blog. This article has been published first in the Newsletter No. 2/2004.

This guest article by Jorn Bettin, Managing Director of SoftMetaWare, a consultancy that provides strategic technology management advice, introduces the mass customization concept as it applies to the development of mass-customized software products.

In the software engineering community the techniques and technologies necessary for mass customization of software are part of the discipline of software product line engineering. Mass customization of software is somewhat different from mass customization in other industries, where the transition is from mass production to mass customization.

In the software industry the transition to mass customization is about providing an economically superior alternative to both of:

* Manual development of off-the-shelf software products, which may or may not be configurable/customizable, and where the total cost of ownership is driven upwards not only by high costs for the base product, but also by very high costs for configuration and implementation.

* Manual development of expensive one-of-a-kind custom applications.

In other words the paradigm shift is from "massive manual customization and configuration" to "massive automated customization and configuration". The main objective is to raise the level of abstraction of software product specifications to a level that relates to the problem space rather than the solution space (software technologies).

The first step towards mass customization of a software product is the derivation of design templates for software products of a certain type from one or more prototype product instances. The design templates are then used in conjunction with user supplied specifications for a specific product to automatically generate a corresponding product instance.

In the world of software it is very easy to expose thousands of configuration options and switches to users, and the varying needs of customers have led vendors to continuously increase the degree of configurability of their products. Enterprise resource planning systems provide a prime example of extremely complex configurability, and in fact this complexity has become a major cost issue for those wanting to implement such systems.

Software product line engineering tackles this problem head-on by ensuring configuration knowledge is presented to the user in an intuitive format, and by ensuring the user can't create an "illegal" configuration. For example, when configuring a product, the user should be provided with a single selection of the country that the software is used in, rather than separately needing to specify country-specific address formatting rules, date formats, legislation options for accounting, etc. In software product line engineering a process of domain analysis is used to uncover the deep domain knowledge required to build domain-specific [configuration/specification] languages that prevent users from creating "illegal" configurations. In many cases software product instances can be drastically simplified by applying some product specifications at "product generation time", i.e. before the software is compiled and deployed in a specific environment. This approach minimizes the post-installation configuration effort, and often it also reduces the overall size of the software, which is less of an issue for enterprise systems, but can be an important factor in the development of embedded software.

So far the theory. In practice, time-to-market requirements usually don't allow the significant ramp-up period postulated by most software product line engineering methodologies. At OOPSLA'03 (http://www.oopsla.org), a group of researchers and practitioners met in a birds of a feather session to share their experiences. The objective was to define the foundation of a new paradigm for software development that builds on software product line engineering principles, but which also is compatible with the principles of the Agile Manifesto (http://www.agilemanifesto.org). The result is a paradigm called Model-Driven Software Development (MDSD).

The relationship between MDSD and software product line engineering can be compared to the relationship between Component Based Development and Object Technology: One builds on the other, and the terminology of MDSD can be seen as an extension of the terminology for software product line engineering. The concept of core assets from software product lines carries through into MDSD and is directly reflected in "Industrialized Software Asset Development", the subtitle of MDSD.

What sets MDSD apart from classical software product line engineering is the emphasis on a highly agile software development process. One of the highest priorities in MDSD is to produce working software that can be validated by end users and stakeholders as early as possible. This is consistent with the major shift towards agile software development methodologies in the industry. MDSD provides the scalability that is not inherent in popular agile methodologies such as Extreme Programming.</