Mass Customization & Open Innovation News

Why Mass Customization Fails: It is the human factor, Ben Moore and Clint Lewis propose in a new book

In a new book, Ben Moore and Clint Lewis are looking on the success factors of mass customization and customer-centric manufacturing strategies (The Consumer’s Workshop: The Future of American Manufacturing). Their main finding: People matter most for successful mass customization. This may sound like a simple truth, but confirms an understanding I got from working with many companies in the area as well. MC is enabled by technologies, but put in place by dedicated people.

Ben is the President of Agent Technologies, Inc., and Clint the President of Lewis Group Consultants (LGC), two operations and manufacturing consultancies in the United States (a more detailed bio can be found here).

Ben offered to summarize his key findings in a small guest article to my blog, which you find in the previous posting. In an additional interview, I asked him what motivated their research on mass customization and how they did derive their findings.

What did motivate your research on mass customization?

Ben Moore: I've always had an interest in mass customization even before my participating in a Defense Advanced Research Projects Agency (DARPA) project entitled Autonomous Agents at Rock Island Arsenal (AARIA) back in 1995; in this project we built a simulation to demonstrate a factory scheduler capable of mass customization based on autonomous agents that actively represent each step of manufacturing a part. Since this project and the growth of personalization tools, I've researched mass customization tools and techniques in an attempt to find the best system for consumers to create unique products and for manufacturers to efficiently manufacture these products.

What is an example of a company "that got it", i.e. that has a sustainable mass customization strategy that is both scalable and build-to-last -- and that understood the HUMAN FACTOR.

BM: I've found the HUMAN FACTOR to be the least understood and valued of companies. John Deere gets mass customization tools and techniques, but their people systems don't compare to the people systems in companies like Procter & Gamble (P&G) and General Electric (GE). P&G and GE don't focus on mass customization, but focus on customization through standardization and systemization that allows the creation of new products and machines; P&G and GE really get it with their people systems.

What would be your main advice for a manager that wants to start a mass customization initiative?

BM: I recommend really looking at the reasons and financials for a mass customization initiative versus some level of customization initiative. In some manufacturing companies, like capital equipment manufacturers, each product/machine is different so it makes sense to create processes and tools to efficiently manage the customer requirements and deliver these unique products/machines profitably. In many other companies, I've found that creating an agile manufacturing system that can be reconfigured / customized to make a wide variety of products to be more profitable.

What is, in general and beyond your industry, the greatest mass customization offering ever - either one that already exists or that you would like to get in the future?

BM: I believe the greatest mass customization offering ever will be health related. People are becoming more health conscious around the globe. Companies that find a way to capitalize on providing a health regiment specifically designed for the individual based on age, weight, diet, family history, lifestyle and behaviors that fits with the delivery system that they are looking for and at a price they find affordable, will win in this space.

Context: Continue reading with an excerpt of Ben's book.

Guest article: Why Mass Customization Fails

A Guest article by Ben Moore & Clint Lewis

Adapted from their book "The Consumer’s Workshop: The Future of American Manufacturing"

Ben Moore is the Founder and President of Agent Technologies, Inc. a firm specializing in eCommerce 4 Manufacturing (sm) through manufacturing consultants and software applications. His prior experience has included managing global software projects with Procter & Gamble and leading the Pampers.com e-Commerce initiatives.

For over 17 years Clint Lewis was instrumental in the start up and expansion of many product lines at Procter & Gamble such as Pampers, Rely, and Luvs. Clint is the Founder and President of Lewis Group Consultants (LGC), an operations and technical manufacturing consultancy with a business philosophy that centers on "Maximizing the Merger of People and Machinery."

We all know that Mass customization aims to provide goods and services that meet individual customers' requirements with near mass production efficiency. We also know the importance of Systemization, the process of defining what range of products will be made and what range of production processes will be employed and Standardization, the process of defining what specific products will be made and what specific production techniques will be used to make these products.

We even know how to build product configurators and structure the product choices we present to the customer. Since we know all these things, then why after the incredible financial justification has been made that many mass customization/product configuration projects fail and/or don’t provide the anticipated return on investment? What is typically missed is the HUMAN FACTOR.

No matter how great the systemization, standardization, product configuration implementations are, it still requires PEOPLE to run the system. Most of these major technology projects give more emphasis on the technology than the people and hence are more likely to fail and/or underperform.

I know what you are thinking…We provided customized training so the workforce would know how to use our product. However, systems that transform a company require much more than just training, but changing how the workforce actually works together. People can MAKE a system work or people can LET a system fail. Yes, the system NEEDS people and people can’t be managed like things….they must be led, engaged and energized.

Now how do you engage your workforce (which is typically our largest ongoing costs) to MAKING your systems work. This is not a foreign concept, as many of today’s leading corporations discovered many years ago, the key is creating an environment where employees are:

Valued: Employees are not only fairly compensated but also routinely solicited for their ideas regarding day-day business activities, growth opportunities and innovative concepts.

Empowered: This environment flourishes as a result of an “institutionalized” work system that actively recruits, hires and develops people who demonstrate superior people, technical and leadership skills. Workers are expected to make keys decisions at the lowest possible level and are accountable for results. They make production, quality and improvement decisions. Teams police each other and develop their own team and individual improvement strategies.

Educated: Workers are immersed in the continuous improvement philosophy from day one. They are provided “state of the business” information in a timely fashion both through their own initiative as well as through formal business discussions. They are provided the most current technology training and also given the necessary tools to allow them to effectively utilize this training.

Stakeholders: Simply stated, team members execute the running of the day-day business as though they are the primary owners. Their philosophy is to always provide a product or service that is consumer focused and as consumers, they would be first to purchase.

Sounds so simple….but it’s not. Some companies can’t make this change because of the culture that has been setup within the company. There is a science to setting up these types of systems to support major systematic changes within an organization. The answer to the future of American Manufacturing and manufacturing in all developed countries is full utilization of each human resource due to the global pressures from lower cost workforces around the world.

For a practitioner’s guide on implementing a major initiative like mass customization within an organization, read Ben and Clint's book – The Consumer’s Workshop. http://www.theconsumersworkshop.com

Context: Interview wit the authors.

Trend Map 2008: See where personalization, open innovation, and mass customization are in 2008

Last year, I often showed in my presentations the great trend map created by Nowandnext.com and Future Exploration Network. They position in form of a subway map the major trends in society, policy, technology, and economy and thus provide a fresh look on these themes. And in case you need any buzzword for your talk or paper, they are all there.

Recently, the 2008 trend map has been published. It is derived from Shanghai’s underground routes. Limited to just five lines, the map uncovers key trends across Society, Politics, Demographics, Economy, and Technology.

Trends mentioned in the map include:

Simplicity, Reality mining, 3-D printers, Personalization, Geospatial web, Networked risk, Data visualisation, Open Innovation, or Constant partial attention.

But it also has nice ideas like Celebrity worship, Female chauvinism, or even Karma capitalism.

For all students, an important disclaimer from the trend map's authors: "Remember that our trend maps are generally for stimulation rather than being taken too seriously… :-)"

The trend map again is released on a Attribution-ShareAlike Creative Commons license, so readers are free to improve or modify the map!

Download the 2008 trend map as PDF here. The old 2007 trend map can be found here.

Video interview on mass customization and open innovation

In case you understand German and prefer to watch a video instead of reading a paper or book, this video is for you: Förderland, a large German Blog on Entrepreneurship, has conducted a nice video interview where I explain the basic concepts of mass customization, user innovation, co-creation and how this all belongs to each other (for a more detailed version of this, read our book).

In the video, I define the the basic concepts, give some examples, talk about the challenges, discuss, how entrepreneurs and start-ups can profit from these concepts, and name my personal best practice of a company in this area. And: The video also offers a view into my not really tidy and organized university office (note: I recently have ordered nice new office furniture, but as this industry is not doing any mass customization at all, delivery times for this are more than two months ...)

Here is the video (or go here to the full link and summary):
Thanks to the Exciting Commerce Blog where I noticed that my interview has been published first!

MCPC 2007: Finally a Conference Report & Review

The MCPC 2007 now is over since almost a month, and finally I get the time to restart blogging. Immediately after the conference, my teaching period at RWTH started, and I was very busy in keeping my students happy.

What to write? The MCPC 2007 was a terrific and very rewarding event. We were a great bunch of several hundreds of people at MIT and HEC Montreal, and the depth and quality of discussion was amazing. To get an overview, you can download all abstracts of the conference here. You also can order the full-text proceedings here.

I will not provide a long conference report here but let our participants talk. We received this quotes after the conference, and they summarize very neatly what was special about this conference:

"Thank you for organizing the best conference I have ever attended. This conference gave me a lot of power, ideas, and inspiration for my future research. I have been struggling in my research regarding MC for footwear for ten years. Few researchers are studying MC for the footwear industry in the US, but learning that many researchers and firms are tackling this issue in other countries, gave me inspiration. In addition, many colleagues don't realize the enormous potential of MC. Now I can perceive of a clear future direction for MC after attending this conference." Sage Endo, School of Business Administration, University of Mississippi

"Excellent conference. I thought Joe Pine's talk was enough to make the
conference worthwhile (it was) but then the rest of it was beyond my
expectations as well. Congratulations." Suzanne Loker; Cornell University

"One of the best, if not the best conference I've ever been to. Right mix of
theory and practice." Oinonen Sami, Nokia

"It has been one of the most rewarding conferences I've have attended. It was really
well organized as it brought together a heterogeneous group of people
who usually don't interfere with each other. The complementary competencies make an ideal arena for some really exiting stuff to happen." Christian Thuesen, NCC Construction Denmark

"It was an eye opener and I can't remember a time when so much new information (at least for me) was crammed into such a short time." Art St Onge, President, St Onge Company

"Seeing so many people trying to forward mass customization across so many different disciplines was very inspiring and I'm already looking forward to the next conference!" Monika Desai, Footwear Entrepreneur, Boston

And one note made all of us very proud:

"Thank you so much for getting me to speak at this week's event! I thoroughly enjoyed it, and seeing what a great group of folks you have brought together to push forward the state of art in Mass Customization." B. Joseph Pine II, Author of "Mass Customization"

Joe gave a really inspiring talk to start the conference. It almost was a journey though his life, starting with the very first research on mass customization and ending with its most recent book (just published this month) on Authenticity.

Joe agreed that we can share his slides and so you can follow his thoughts at least partly on paper. Download his presentation here. (Including Joe's personal comments on screen during the presentation!).

For more conference reviews, several blogs have provided feedback:

A great large and extensive conference report can be found here: http://no-retro.com/home/category/mass-customisation/

Ronal Reddington from the Made For One Blog collected a selection of feedback from our visitors posted in several blogs. He could not make it in person to the MCPC; but contributed with this selection! Thanks a lot, Ronal!

Based on his original summary, here are some quotes and links to more extensive reports:

First off, Peter Semmelhack of Bug Labs, who spoke at MCPC 2007, wrote briefly about the event on the company’s BugBloggers weblog. For some pictures, just look here.

As Ronal Reddington wrote, Bug Labs is producing an open source, modular consumer electronics platform which will allow individual users to customize gadgets. I am really looking forward to their launch at the end of this year.

Elaine Polvinen, Professor of Fashion Textile Technology at Buffalo State University, published her thoughts on the MCPC Business Seminar in Montreal on her Virtual Fashion Technology blog. Her conclusion:

"The conference was short, and jam packed with interesting presentations highlighting the latest developments in mass customization and personalization. Someone mentioned at the conference that an obstacle preventing wider scale use of mass customization and personalization was a system to input and save standardized measurements. As I listened to these comments I remembered that such a system was recently developed in Korea called i-fashion."

I-Fashion was represented with several talks during the MCPC research conference at MIT.

Michael Galpert, Chief Operations Officer of Worth100.com, shares his notes on MPCP 2007 Pre-Conference Workshop at MIT. Real notes, but interesting to read (especially for me to see what people note while I am talking :-).

Adrian Bowyer of the RepRap digital manufacturing machine (3D printer) project, posted about his journey to Boston and how he set up one of the ‘Darwin’ 3D printers in the conference lobby. This was one of the great exhibits we had a MIT !! And one of the most interesting discussions we had a MIT: The upcoming world of user manufacturing where cheap manufacturing infrastructure will allow users to make directly what they want ... without having to wait for a manufacturer to set up a traditional mass customization system for them.

Another home fabbing device we had on the conference was the famous Fab@Home machine from Cornell university (I wrote about this before in this blog).

Robert Freund reports in German, but larger detail on his impressions from the conference and the feedback he received.

Ruben Robert of open innovation accellerator FellowForce has published a short summary of his MCPC presentation ‘The Business Smarts of Strangers’ on the FellowForce blog. And FellowForce also gave us their innovation widget for free to gather feedback and ideas for the next MCPC 2009 ! (See it on the conference web site),

The writers of the OPENeur blog also participated át the MCPC 2007 – here is their preview.

Adam Fletcher from Spreadshirt also reported from its MCPC 2007 trip which took place while he was very busy in running the "Open Logo project" for Spreadshirt: Posting 1 and Posting 2

So: A great event with great people and really interesting discussions. The next conference will be in Europe in September/October 2009 –we have not decided yet where and are taking proposals from interested universities who want to host the 2009 conference. if you are interested, you drop me a line!

Update: On configurator-database.com, you find a number of MCPC 2007 conference pictures, but -- first of all -- a number of great videos with some prominent participants.

More information:

You still can order the proceedings: They are a pretty expensive 149 USD for the booklet and CD-Rom, but the price included VAT (19% sales tax) and international shipping. The proceedings include many of the papers in full text or extended abstracts, plus access to a special web site with about 40 slide sets of the presentations and the pre-conference workshops.

MCPC 2007 @ MIT -- Program Online: More than 150 Presentations Selected for the MCPC 2007 Conference at MIT

The 2007 World Conference on Mass Customization & Personalization is coming closer. Finally, an overview with all presentations accepted from the "Call for Papers" is available. Just click on the banners below for more information.

Information about the MCPC 2007 Research & Innovation Conference at MIT:

Information about the MCPC 2007 Business Seminar at HEC:

All conference information is at www.mcpc2007.com

MCPC 2007 Montreal Business Seminar: An Extreme Makeover of Retail - Program online

Don Tapscott, author of Wikinomics, and Mike Gray, Supply Chain Evangelist at Dell, Inc. to keynote MCPC 2007 business seminar

The second part of the MCPC 2007 will be in the form of a business seminar hosted by My Virtual Model, Inc., at HEC Montréal—Canada’s oldest business school. It addresses the application and implications of mass customization and personalization in retail. The business seminar is presented by MVM.com

An Extreme Makeover of Retail

Personalized advertising is transforming marketing, advertising and the media business. Virtual identity, product placement in games and movies, televisions and ads, social shopping and communities are driving and transforming forces in the market. How will merchants, brands and retailers address this new wave of interaction? The business seminar features the new breed of entrepreneurs: investors, advertisers and researchers in E-commerce, gaming industry leaders, TV and movie special effect providers and new media innovators in PDA, iPods, SMS, RSS feeds and even RFID.

Keynote Speakers at the MCPC 2007 Business Seminar

DON TAPSCOTT, Chief Executive of New Paradigm, Adjunct Professor of Management at the Joseph L. Rotman School of Management, University of Toronto

Don is an internationally renowned authority on the strategic value and impact of information technology. He has authored or co-authored eleven widely read books on technology and business, including his most recent Wikinomics: How Mass Collaboration Changes Everything, which will form the basis of his presentation. He is also the author of The Naked Corporation, Digital Capital and Growing Up Digital.

MIKE GRAY, Supply Chain Evangelist – Dell, Inc. With Dell for over 15 years, Mike is considered an expert on Dell’s unique approach to supply chain management. He has been a lead architect for many of the business processes that allow Dell to achieve its unprecedented levels of inventory while maintaining industry-leading customer service.

Mike Gray is a lifetime Certified Purchasing Manager (C.P.M.) with the Institute for Supply Management (ISM) and is also certified in Integrated Resource Management (CIRM) by APICS, the Association for Operations Management.

Don and Mike’s presentations are framed by four panel presentations. Experts, specialists and leaders scheduled to participate in the "Extreme Makeover of Retail" seminar include:

Sean Belka, Senior Vice President, Online Strategy for Fidelity Personal Investments(FPI), unit of Fidelity Investments

Robert Bonneau, President of Global Wine and Spirits

Lukasz Gadowski, President and Founder of Spreadshirt

Louise Guay, President and Founder of My Virtual Model

Philip Jacob, Founder of StyleFeeder, computer, programs architect and entrepreneur

Kirk Jones, Director, Nike ID Innovation

Michael Kahn, Vice President, Account Manager, double click performics.

Paul Miller, Senior Vice President Direct Commerce Sears Holdings Company

Jacques Nantele, Secretary General, HEC.

John G. Palfrey Jr., Clinical Professor of Law & Executive Director at The Berkman Center for the Internet and society at Harvard Law School

Frank Piller, Researcher & Author, Chair Professor of Management at RWTH Aachen University Germany, and Founding faculty member of the MIT Smart Customization Group

Sean Ryan, CEO of Meez

Christian Stegmaier, Head of Life Style, Reebok International Ltd

Jarmo Suominen, Professor of Mass Customization, Director of the Future Home Institute University of Art and Design Helsinki, Guest Researcher at the MIT.

Marybeth Thomson Luber, General Manager Custom Archetype Solutions Inc.

Paul Trevitchick, CEO and Co-Founder, Parity Communications Inc.

Joshua Young, Product Imaging Operations Manager of Nike Apparel US

Registration for the seminar and much more information here.

Context:

This business seminar is part of the MCPC 2007 World Conference that will take place from Oct 7-10 on the MIT campus in Cambridge, MA, USA, and from Oct 10-11 at the HEC Montreal, Quebec, Canada. The MCPC 2007 is the largest event in the field of mass customization and personalization. More information here.

MCPC 2007 -- Latest Program Information -- Registration Is Now Open

I did not blog for a while about the MCPC 2007 conference. But in the meantime, we did organize the program and really stepped forward in making this conference happen.

Here are some general information on the conference. In the coming weeks, I will feature in individual postings some special presentations that will be given at the event!

The 2007 World Conference of Mass Customization & Personalization (MCPC 2007) will become a high profile and truly interactive event for the mass customization research and practice community on the MIT campus on Oct. 8 and 9, 2007. On Oct 11, a special business seminar will be held in Montreal.

(1) Program Overview

Our program committee selected from the submissions of more than 400 authors about 150 papers and proposals for presentation at the conference. Besides the latest research on mass customization, personalization, and related topics like user innovation, we are very glad that also a large number of managers from leading companies will share their success stories and challenges from running a MCP business.

In addition, we will have academic keynotes of several top MIT researchers, including
- Eric von Hippel (Sloan School of Management),
- Marvin Minsky (“inventor” of artificial intelligence), and
- William Mitchell (Professor of Architecture and Media Arts and Sciences at MIT Media Lab).

Also the expert who made mass customization known and developed the original concept in detail, B. Joseph Pine II, plans to attend and keynote the conference.

In total, we will have much more than 200 participants on the program!

The business seminar on Oct. 11 in Montreal -- a one-day focused event of high-profile invited management presentations -- gets in great shape in the moment. We will have companies like Dell, Google, Rebook, Nike, Fidelity, among many others, presenting their latest customization and personalization initiatives. Montreal is an easy 4-5 hour drive away from Boston; and the trip though the New England Indian Summer should be a great experience at this time.

More information on the Montreal program will follow very soon in a separate posting. Please make your own travel arrangements, there is no central group travel organized by the conference.

(2) Registration

Conference registration is now open online.

Participants can register until the beginning of the conference. On-Site registration is possible as well. The early registration discount however ends on Sept 1, 2007 !! You can either register for the MIT event only or enjoy a special discount when registering for the Montreal business seminar as well.

(3) Program and Scheduling

The final program will be ready at the end of August once we have the feedback and commitment by all authors to come and present. General presentations will be scheduled either on Oct 8 (between 10.15-6.15) or on Oct 9 (between 10.15-4.45).

The MCPC 2007 will start with our opening keynote session on Sunday, Oct 7, at around 3:30pm, followed by an opening reception. Earlier on this day, there will be s special interactive workshop program. More information on this will follow soon.

The MIT part of the conference ends on Oct 9 with a closing keynote panel at about 6pm.

The Montreal part will start on Oct 10 with an evening reception and go until Oct 11 night.

(4) Sponsorship Opportunities and MIT Smart Customization Group

If your organization, company, or consultancy is interested in supporting the MCPC 2007 conference at MIT and exhibit your services, products, or MC offerings during the conference, please contact Betty Lou McClanahan who will discuss any possible arrangement with you (contact data at the end of the posting).

Also, for corporations who want to continue to work with MIT after the conference, the MIT Smart Customization Group, part of the MIT Design Lab, is a great initiative to join. You find more information on this group here: http://design.mit.edu/smartcustomization/

There will be a special information session on the MIT Smart Customization Group during the conference, and again Betty Lou is glad to discuss any options of working with MIT students and researchers on mass customization.

(5) Hotel Booking

On the conference web site, you find a list with hotels. We got a special room block at the Marriot Cambridge, which is just on the MIT Campus.

Also, the Renaissance Cambridge and the Kendall Hotel are within steps from the conference site. The Hotel Marlone, the Royal Sonesta, and the Hotel@MIT are in easy walking distance (<10 min.). As October is a busy season in Boston, hotel prices are not cheap. So as an alternative, you may want to stay in a cheaper motel outside Boston (e.g., at Route 1 north of Boston) and drive to the campus (parking is available at public garages for about 15-20 $/day).

Or check Craigslist where you may find a cheap room sublet (listings for Oct will not be in before mid of Sept).

There also is a helpful site at MIT with guest houses and B&Bs.

Context: MCPC 2007 contacts and more information:

Registration and Payments:
Nicole Silva
MIT Conference Services
Phone: 617-253-0116
Fax: 617-258-7005
Email: conferences-www AT mit.edu

Sponsorship and Organization:
Betty Lou McClanahan
Program Manager, MIT Media Laboratory
20 Ames Street, Room E15-228
Cambridge, MA 02142-1308, USA
Phone: 617-253-0630,
Fax: 617-258-6264
E-Mail: bl AT media.mit.edu

Abstract / Paper Updates and Modifications:
Dina Franzen
RWTH Aachen University, TIM Group
Phone: +49 241 809 3577
Fax: +49 241 809 2367
Email: franzen AT tim.rwth-aachen.de

Program Planning and All Other Questions:
Frank T Piller
RWTH Aachen University, TIM Group
Phone: +49 241 809 3577
Fax: +49 241 809 2367
Email: pillerAT tim.rwth-aachen.de

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.

I am the cover star of the latest WIRED issue (and you can be it, too)

New York Times reporter Claudia Deutsch yesterday had a very nice article about the latest WIRED magazine issue. This issue’s cover story is about the growing personalization trend. And to illustrate this trend, subscribers could upload a picture in the last week to the WIRED website which was then digitally printed on their individual issue. A great way to impress your mother in law and get your 15 minutes of fame.

The project was enabled in a cooperation with Xerox who also want to promote their capabilities of high-speed, large volume custom printing (using their iGen3 110 digital production press). There have been many attempts to customize papers and journals according to a user’s individual profile, but that you could appear on the cover of a major national magazine is a new thing.

The NYT article reports about the cooperation between the two companies and has some more information about the production process of the personal cover. And in case you missed this, on the WIRED website, you can still create your custom WIRED cover, but this time in digital form (and their toolkit really is bad, a shame for a technology magazine).

Assignment Zero Interview on Mass Customization, Crowdsourcing, and the Demand for Change Management

Dave Butler and I talk about the latest trends in mass customization, crowdsourcing, and why this all depends from the ability of firms to master change

Assignment Zero is a large project on crowdsourcing journalism. Inspired by the open-source movement, Assignment Zero is an attempt to bring journalists together with people in the public who can help cover a story. It's a collaboration among NewAssignment.Net, Wired, and those who choose to participate. Facilitated by Jeff Howe, the Wired reporter who coined the phrase crowdsourcing, and coordinated by editor David Cohn the project wants to create a repository of the state of the art of the crowdsourcing movement.

This is how Assignment Zero works:

“The investigation takes place in the open, not behind newsroom walls. Participation is voluntary; contributors are welcome from across the Web. The people getting, telling and vetting the story are a mix of professional journalists and members of the public -- also known as citizen journalists. This is a model I describe as "pro-am."

The "ams" are simply people getting together on their own time to contribute to a project in journalism that for their own reasons they support. The "pros" are journalists guiding and editing the story, setting standards, overseeing fact-checking, and publishing a final version.

In this project, we're trying to crowdsource a single story, and debut a site that makes other such reports possible down the road. But we don't know yet how well our site and our methods work. Our ideas are crude because they are untested. By participating, you can help us figure this puzzle out.

… Assignment Zero is a starting point, a base line. Who knows where we will end up. But if reporting in the open style ever comes into its own -- at our site or someone else's -- that might very well change journalism and expand what's humanly possible with the instrument of a free press.”

The project’s web site is a huge, although sometimes confusing to navigate, collection of links, definitions, articles, and interviews on crowdsourcing.

The interviews form the core of this project. The community identified a few tens of people worldwide who contributed to crowdsourcing by either starting one of the projects or businesses utilizing this concept, or by thinking and writing about it. I am very proud that I was identified by this community as one of those 50 persons who matter most in crowdsourcing.

Now, this interview with me on crowdsourcing has been published in full length online. An abbreviated version may also end up in an upcoming Wired magazine article on the topic. In this long interview, we talked about a number of exciting topics, including:

- What is crowdsourcing 2.0?
- How do business-to-business (B2B) relationships change as a result of crowdsourcing?
- What is the major roadblock to crowdsourcing? What is the largest hurdle?
- What is the new function of a company when its core activities can be crowdsourced to its periphery?
- Why does crowdsourcing demand change management?
- What is the connection between crowdsourcing and instant companies?
- In an interview with mass customization pioneer Joseph Pine, Joe noted that Henry Ford was the father of mass production, but Michael Dell is the Henry Ford of mass customization. So who’s the Henry Ford of crowdsourcing?

As described before, interview assignments are crowdsourced. Contributors select their favorite subject from the list of interview partners, and contact the person to be interviewed. In my case, I had the pleasure to speak with Dave Butler of WorkLife, a consultancy that has a great twist on customer integration: Integrating employees in corporate change processes by theater and cultural experiences.

This is a less covered application of applying the principles of integrating the periphery in value creation. Don Tapscott has a very good chapter about this mode in his book Wikinomics, and David Butler is living this in his consultancy. He combines his initial career as a professional actor and stage director with his extensive experience in personal and corporate transformation initiatives.

So if you want to read extensively what David and my thoughts are about the recent state of mass customization, crowdsourcing, open innovation, and customer integration, read the full interview here.

Context: Other great Assignment Zero Interviews on Crowdsourcing with:
- Lawrence Lessing on Creative Commons
- Howard Rheingold on virtual communities,
- Sydney Poore aka FloNight, a Wikipedia super-contributor, and Jimmy Wales, WikiPedia founder
- NYTimes.com Design Director Khoi Vinh on MicroStock Photography
- Alpheus Bingham, co-founder of Innocentive
- David Lionel, founder of Crowdspirit
- Eric von Hippel and Karim Lakhani on User Innovation

All interviews are published under a Creative Commons license, and are available for re-use in your own texts, as editor David Cohn writes:

"The reporting found in this blog can be mixed and mashed to write your own story on crowdsourcing. Perhaps you want to write about a specific topic -- there are plenty of interviews that cover microstock photography, open source movies, conferences, etc. Or for a real challenge, try to write a big feature that encompasses all the different aspects of crowdsourcing."

Interview: Klaus Moser on Mass Customization Strategies and How to Align Mass Customization with Corporate Strategy

Klaus Moser is a project leader at Boston Consulting Group (BCG) and a research affiliate of the TUM Research Center for Mass Customization & Customer Integration, Munich. Klaus is a long-time research partner and was an Executive Ph.D. student in the Munich center. Based on exploratory research in the field of mass customization, he focused his dissertation on the topics of mass customization strategies and competencies. His striking finding: Many firms do not have a dedicated mass customization strategy, but just use this approach to support other purposes – even if they think that their mass customization offering is profitable of its own.

The results of his research have been published recently in a book titled "Mass Customization Strategies". According to the topic, Klaus published his book with Lulu - a print-on-demand publisher. Print on demand means that the book is listed at online retailers and only printed whenever an order is placed. This business model enables the offering of books at a low price (no matter how many books will ever be sold). His projects at Boston Consulting Group focus on strategic, sales and organizational questions, and he has worked for firms within the industrial goods and financial services sectors since the year 2000.

In an interview, we recently talked about his research and what is a good mass customization strategy.

Klaus, in your research you find that many companies have no dedicated mass customization strategy. Why is this?

For many managers mass customization still is a new practice – and a common understanding of the possible benefits of mass customization does not exist. Moreover, most companies focus on operational questions and miss to define a strategy first. But there is an interesting observation I have made – a growing number companies have launched mass customization businesses which are supporting a core business based on either mass or craft manufacturing. In my book "Mass Customization Strategies" I identify seven mass customization strategies – only a few of these strategies are based on the understanding that mass customization has to be profitable on its own.

What is a good mass customization strategy anyway?

There is not one good mass customization strategy – more important is that the mass customization strategy is aligned with the overall business strategy. If the core business of a company is mass production based, than a mass customization offering could for example accelerate the objective of better understanding customer demand and needs. A good example provide Adidas sports shoes. Their mi adidas program is helping the company to gather important information to improve forecasting and design of standard products. Also, mass customization could help a company to demonstrate innovation leadership within one industry. Consider as an example Loewe, a German producer of TV sets. To build their brand and differentiate their company from Asian competitors, they very successfully launches a custom TV business.

So, what is the appeal of mass customization for a growing number of companies? Looking in my e-mail inbox, I get more and more requests of companies experimenting with mass customization? Why is this?

From my research I have learned that companies today better understand the competencies and technologies needed to successfully implement a mass customization concept. For several years, companies have gone through a phase of learning and development. But my striking hypothesis is that companies have now realized that not offering mass customized products and services might imply a competitive disadvantage. A good example is the sports shoes industry – today all major players have implemented a mass customization program: Nike, Adidas, Puma, etc. So managers fear to be left behind, and invest in mass customization. If doing so always is the best option, I however doubt.

How did you come to your findings, what is the background of your research?

My research and findings build on the results of two separate, but coordinated empirical research projects. Both projects were initiated at the Institute for Information, Organization and Management (IOM) – TUM Business School, Technische Universitaet Muenchen. The first project examined mass customization cases in a broader business context. This research project, titled international mass customization casebook project, offers a deeper understanding of the different types of mass customization, and also presents results concerning applied competencies. The second project, the industry research group on mass customization, presents empirical case data confirming the results from the first project. Both projects build on case study research and the results are documented in "Mass Customization Strategies".

What is an example of a company “that got it”, i.e. that has a sustainable mass customization strategy that is both scalable and build-to-last?

Two examples I personally like are Build-a-Bear and 121TIME. Both businesses being quite different from a sales channel strategy have successfully grown their businesses during the last couple of years and both companies have managed to very professionally understand market and customer needs, which I take as a measure of build-to-last.

What are the main challenges in mass customization still ahead?

Companies still struggle with understanding customer needs, since I see that most companies do not tailor their mass customization offering to earlier identify market needs. On the operations side, many companies struggle with missing standards for IT systems and configuration systems – I have made the observation that manufacturing capabilities, for example in the shoe or apparel industry, are often stronger than required IT capabilities. Another observation from my research is that the types of companies changing their focus from a mass manufacturing to a mass customization business model often struggle with proper change management around organization, processes and people.

What would be your main advice for a manager that wants to start a mass customization initiative?

My advice: study and understand best practices of the today's many existing mass customization examples. From the industry research group on mass customization which I have coordinated at the TUM business school I learned that best practice sharing is a successful instrument also when done across industries.

To conclude: What is the greatest mass customization offering ever – either one that is already existing or that you would like to get in the future?

My expectation is that the future of mass customization lays in the bundling of customized product and service offerings in order to fulfill people's overall and not only single needs – I have not seen such an offering so far.

Contact Klaus Moser at klaus@moser-mc.com, www.moser-mc.com

How mass customization really works -- Spreadshirt

Spreadshirt has a nice video on their blog that shows how a custom product really is made. You would expect a lot of high tech machines .. but the secret are many many hands and human labor ... given this complexity and the German wage level, it is amazing that the custom t-shirts do not cost more (but perhaps workers are just paid in t-shirts).

Or, as the company's founder writes:

"When people visit one of Spreadshirts manufacturing sites, they are often surprised. they expected a big machine, somebody pressing a few buttons and a customized shirts to emerge. instead they find real manufacturing. real people taking real apparel from shelves (hard till impossible to replace with robots at a competitive price with nowadays tech), real people preparing the designs, real people pressing the shirts, real people doing quality control and packaging."

Here is the video about the reality behind one of the largest mass customization consumer sites (show this video to your local government funding agency, and they will provide you money as this shows the labor effects of a mass customizer in town)):

Link: sevenload.com

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.

Guest Article: Market Relevancy for 21st Century Manufacturers -- Connecting Your Customers to Your Enterprise

In this guest article, Dave Gardner, a long time mass customization veteran, comments on how companies can become a “progressive manufacturer” by moving towards mass customization.

David J. Gardner is the Founder and Principal of mass-customization-expert, a consultancy helping companies in the design and integration of innovative business process and information technology solutions for companies. He has held management positions in Engineering, Manufacturing, Sales, Marketing, and Customer Service, and Product Management. He joined Tandem Computers in 1979 where he was responsible for Corporate Documentation Standards for Tandem's highly configurable and expandable computer systems. In 1983, he designed and implemented a Configuration Guide for Dialogic Systems instituting a process that greatly simplified a complex, modular product such that the field sales organization and international OEM customers could easily define their order requirements. David improved the approach at System Industries in the late 1980’s by developing a methodology that not only accommodated "new system" orders but also fully addressed "add-on" orders. In 1991, he founded his consulting company. In July 2002, David was recruited by E-ONE, one of the world’s largest manufacturers of fire and rescue vehicles, as Vice President of Product Management to lead an enterprise-wide change initiative to transition the company from an “engineer-to-order” to a “mass customization” business paradigm. He is a graduate of San Jose State University (BA) and Santa Clara University (MBA).

Market Relevancy for 21st Century Manufacturers -- Connecting Your Customers to Your Enterprise

In an ideal world, manufacturing executives would:

1) Carefully consider the over-arching business and operational strategies needed to create a truly compelling, differentiated business in their marketplace, and,

2) Select the business software applications.

How many companies start with Step 2? The vast majority! Why?

A manufacturing executives’ spotlight is usually aimed at the product and marketplace, not operational details unless there’s been a serious breakdown in the operational side of the business. Let’s face it—it’s hard to get executives excited about a new business application system.

When was the last time an executive from a manufacturing company exclaimed, “Our new ERP system is a true source of competitive advantage and differentiation in our market?” While it may be true that there are genuine business execution issues that arise from a poorly implemented, poorly architected, or an inappropriate ERP system, ERP by itself is not a source of competitive advantage. ERP is essentially a “back-office” tool.

The biggest question about new business systems is typically “how much is it going to cost and how long is it going to take?”

Last year, Managing Automation hosted the Progressive Manufacturing Summit 2006. David Brousell, Editor-in-Chief of Managing Automation, delivered an address “7 Rules to Win in a Global Market.” In his presentation, David defined the global manufacturing winners as “Progressive Manufacturers,” offering the following definition:

Progressive Manufacturers infuse technology into all areas of their business to create sustainable competitive advantage by connecting the customer to the manufacturing process.

This definition is powerful and compelling and should be the rallying cry behind all operational and information technology initiatives. Let’s break this down.

My first observation about the notion of being a “progressive manufacturer” is the holistic or seamless nature from a customer’s perspective. As a customer (or a prospective customer), wouldn’t you prefer to deal with a “progressive manufacturer” as it is defined above?

“Connecting the customer to the manufacturing process” implies that a company is customer-driven—the company, its business process and information technologies are seamlessly designed with the customer in mind and offer the customer the means to interact directly with the company. What might this mean?

- Being able to determine order status (in order administration, production control, production line, shipping, etc.)
- Being able to determine in-transit status
- Being able to look at financial issues (open invoices, paid invoices, etc.)

For companies that offer configurable products, “connecting the customer to the manufacturing process” suggests:

Being able to make decisions about the product or order configuration
Being able to understand the configuration possibilities, pricing and estimated lead time based on actual order configuration

“Sustainable” implies a continual state of evolution—that a company is constantly enhancing its ability to maintain its relevancy and value provided to the customer. There is no such thing as steady state or time-out. It is said in nature that there is no “steady state”—something is either growing or dying. The same can be said for manufacturing companies. Progressive companies enjoy no extended periods of relaxation.

“Competitive advantage” suggests you are doing things that you competitors are not. Generally, this would imply innovation either in technology, process or the way in which you delight the customer. If everybody else in your industry is doing exactly the same thing, how can a company expect to enjoy competitive advantage?” The other added benefit of seeking competitive advantage is it catches competitors by surprise and can take years for them to catch up. This is a stealth approach at its best.

Are there any companies that meet the criteria of being a “progressive manufacturer?” Dell is one of the best examples I can think of. I’m certain Cisco Systems is another. In reality, the number of manufacturers you could classify as “progressive” is probably quite small. That bodes well for companies seeking to differentiate themselves in their market.

Let’s circle back around to our original proposition:

In an ideal world, manufacturing executives would carefully consider the over-arching business and operational strategies needed to create a truly compelling, differentiated business in their marketplace.

A company seeking to become a “progressive manufacturer” has the opportunity to start with the objective of “infusing technology into all areas of their business to create sustainable competitive advantage by connecting the customer to the manufacturing process.”

This requires a holistic view of where you want to go as a business. It doesn’t make sense to select one or more applications in isolation of the total solution and hope that you can “connect the dots” later. It’s no different than having an architect design a house. You