Mass Customization & Open Innovation News

Cracking the Code of Mass Customization: New MIT SMR Paper

Most companies can benefit from mass customization. The key is to think of it as a process for aligning an organization with its customers’ needs.

In the current issue of the MIT Sloan Management Review (Spring 2009 Issue), Fabrizio Salvador, Pablo Martin de Holan and I discuss how mass customization should be not any longer seen as a specialized business strategy but as a bundle of capabilities that could make sense for most businesses.

In the paper, we suggest that mass customization is not some exotic approach with limited application. Instead, it is a strategic mechanism that is applicable to most businesses, provided that it is appropriately understood and deployed. This kind of thinking also is the underlying logic of our upcoming Mass Customization Executive Education Class at IE Business School.

In the paper, we suggest three common capabilities that will determine the fundamental ability of a company to benefit from mass customization thinking:

(1) Solution Space Development.  A mass customizer must first identify the idiosyncratic needs of its customers, specifically, the product attributes along which customer needs diverge the most. (This is in stark contrast to a mass producer, which must focus on identifying central tendencies so that it can target those needs with a limited number of standard products.) Once that information is known and understood, a business can define its “solution space,” clearly delineating what it will offer -- and what it will not.

(2) Robust Process Design.  Next, a mass customizer needs to ensure that an increased variability in customers’ requirements will not significantly impair the firm’s operations and supply chain.  This can be achieved through robust process design -- the capability to reuse or recombine existing organizational and value-chain resources -- to deliver customized solutions with near mass-production efficiency and reliability

(3) Choice Navigation. Lastly, a mass customizer must support customers in identifying their own problems and solutions while minimizing complexity and the burden of choice.  It is important to remember that, when a customer is exposed to myriad choices, the cost of evaluating those options can easily outweigh the additional benefit from having so many alternatives. The resulting syndrome has been called the “paradox of choice,” in which too many options can actually reduce customer value instead of increasing it.  In such situations, customers might postpone their buying decisions and, worse, classify the vendor as difficult and undesirable. To avoid that, a company can provide choice navigation to simplify the ways in which people explore its offerings

But a company does not have to apply all three capabilities in full scope together. For many companies, it already is a great step forward to just work on one of these capabilities to get more customer-centric without, however, having to master the full complexity of a mass customization system.

Read the full article and learn more how these capabilities can be implemented in practice. MIT offers the full paper for free after registration on the SMR website. You also can purchase it there  ($6.50) for further distribution.

Context:

• Posting about the paper in the MIT blog.
• Reference to the article: Fabrizio Salvador, Martin de Holan and Frank Piller: Cracking the Code of Mass Customization. MIT Sloan Management Review, 50 (2009) 3 (Spring 2009): 70-79.
• Free online access to the paper.

Prosumer Revisited - A Brief Conference Report and Links to Summaries of Most Talks

Update: In case you speak German, there is a great comprehensive summary of the event here: "Ich bin ein Prosumer - Brigitte Holzhauer berichtet von der Tagung "Prosumer Revisited" in the Magazin Change X."

This week, at the Goethe University in Frankfurt/M, Germany, an interesting conference took place. Organized by Birgit Blättel-Mink and Kai-Uwe Hellmann, two professors of sociology, the event wanted to review the long school of academic thought on prosumers and co-creating customers. The organizers gathered a diverse and interesting crowd of participants that provided insight from many different perspectives. Overall, it was an interesting event, even when I realized that in sociology, the majority of scholars still focused on mapping that the phenomenon of co-creation or prosuming customers exists, while in the management literature, the state of the discussion has moved one step forward in explaining the structures, methods, and contingencies of user participation in value creation.

Axel Brun, a scholar from Australia who participated in the conference, has written a very comprehensive report, summarizing all keynotes and many of the paper presentation in his blog. Axel is a Senior Lecturer in the Creative Industries Faculty at Queensland University of Technology in Brisbane. He has coined the term "produsage" to better describe the current paradigm shift towards user-led forms of collaborative content creation which are proving to have an increasing impact on media, economy, law, social practices, and democracy itself. For more information, have a look at his website, http://snurb.info.

Here are a few direct links to Axel's summaries of the conference keynote presentations:

• My opening keynote of the conference: http://snurb.info/node/970. This is a nice summary of parts of the talk and of my basic argument why user participation in the innovation process is important: to get access to sticky need information of customers.
• Holm Friebe, co-author of my favorite book "Marke Eigenbau". The book is a great summary of all topics I am writing about in this blog, and so was Holm's presentation: http://snurb.info/node/973
  
  
• Kerstin Rieder is the co-author of a rather critical book on the "working customer", that, when it appeared in 2006, seemed to me like a critical and pessimistic review of the self-service society. Missing many of the more recent developments of voluntarily co-creating customers- So I was glad to hear that in her talk, Ms. Rieder did extend the concept and also focused on the opportunities and advantages of co-creation for firms and, equally, customers: http://snurb.info/node/980
  
  
• Johann Füller from Hyve talked about the creation of brands by users. I have heard this talk before, but it again was fascinating to see how user-created brands challenge the marketing thinking of many decades: http://snurb.info/node/977
  
  
• The honorary keynote speaker of the conference was the famous sociologist and scholar of cultural studies, George Ritzer from the University of Maryland. He provided a nice historical overview of the prosuming customer, but -- as most speakers at the conference -- stopped when it got interesting, i.e. when new forms of co-creation emerge. But overall, it was a great experience to listen to Prof. Ritzer live: http://snurb.info/node/976

For summaries of many more talks, go to http://snurb.info/taxonomy/term/104

New International Executive Program on Mass Customization: Learn in three days the fundamentals to profit from mass customization and how to bring this strategy into practice

Mass Customization: Turning heterogeneous customers into a source of profitability

IE Business School, Madrid, 6, 7 and 8 of May, 2009

I am glad to announce a new Executive Education Program in cooperation with IE Business School (ranked as the 5th business school in the world in Open Programs by the Financial Times, May 2008) that wants to provide a strategic  introduction into how to implement mass customization in your organization.

Download Program brochure.

PROGRAM OVERVIEW

With this program participants will realize that offering superior fit to their customers’ needs does not have to necessarily come at the expenses of efficiency. Mass customization is a key strategy to meet this challenge. Many large corporations have started large-scale mass customization programs. The next one may be your company – you will learn why Mass Customization is far more applicable often believed. Most importantly, this program will introduce you to the different issues, tools and approaches that you can adopt to build profitability by serving differentiated customers’ needs – to move towards mass customization.

Over the past decade, we have studied mass customization in more than 200 different organizations. We found that mass customization is a strategic mechanism that is applicable to most businesses, provided that it is appropriately understood and deployed. The key is to view it basically as a process for aligning an organization with its customers’ needs. Mass customization is about moving towards these goals by developing a set of organizational capabilities  that will, over time, supplement and enrich an existing business.

"Mass Customization" is an innovative, ground-breaking international executive program designed to help executives gain competitive advantage by learning how to turn heterogeneities across their customers into a source of profits. Participants will gain a holistic understanding of the various capabilities – both organizational and individual – that their companies will have to develop in order to recognize and exploit heterogeneous customers’ needs. The program emphasizes a cross-functional approach and covers such issues such as organization design, CRM, and organizational change.

PROGRAM OBJECTIVES

This state-of-the-art program provides its participants with the latest practices and cutting-edge strategic insights to help them steer their organizations towards Mass Customization. The program is delivered by world-class experts on the topic, with excellent academic and practical experience.

Participants will develop a sound understanding of:

• Which capabilities your organization needs to move towards Mass Customization
• Which tools and approaches you can use to build these capabilities
• How to revamp your innovation processes to offer the “right customization”
• How you can you keep the costs of product and service customization under check
• How human capital contributes to achieving Mass Customization
• How IT and knowledge management can support Mass Customization
• How to orchestrate organizational change towards Mass Customization

For the full program structure, please download the program brochure.

WHY IE BUSINESS SCHOOL

IE Business School is a leading international business school oriented at providing top-level training for executives. The recognized prestige of its teaching faculty, the degree of excellence of the academic programs and a clear international focus are the keys behind a learning model that has ranked IE Business School among the best business schools in the world (IE Business School has been ranked the 5th business school in the world in Open Programs by the Financial Times, May 2008).

The Executive Education Programs offered by IE Business School aims to develop the vision, skills and management capabilities required to meet the many and varied challenges facing business organizations, both today and in the future. In recognition of the high quality and academic rigor of the programs, IE Business School is accredited by EQUIS (European Quality Improvement Systems), AACBS International (The Association to Advance Collegiate Schools of Business) and AMBA (Association of MBAs).

Together with my co-instructures, I invite you to join our mass customization community and benefit from a unique learning experience in an environment that nurtures top-level talent both professionally and personally.

FOR FURTHER INFORMATION, please contact:

Karen Hobbs, International Executive Programs Manager

karen.hobbs@ie.edu
Tel.: +34 91 782 17 15
Fax: +34 91 745 47 62
www.execed.ie.edu/internationalprograms

For more information, please download the program brochure.

Embedded Toolkits: Participate in Our Survey on the Next Generation of Configurators in the Automotive Industry

My research group in Aachen is working on a nice project (EMOTIO) on the next generation of customization toolkits. Our idea is to extend the conventional configuration of custom products before you order the product by an embedded solution that would allow you to configure your product while you are using it!

We need your feedback on how you evaluate this idea. There is a short (15 min) survey that presents you some use cases of such an embedded toolkits:

Survey in English language: http://www.embedded-toolkits.com/survey/ (there also is a German language version) (it will take not more than 15 mins to answer).

Funded by the IMP-Project Fund within Germany's "Elite initiative", our project wants to pilot these toolkits and get a better understanding on their acceptance by users.

With our survey, we study this phenomenon in the automobile sector. Cars are rather complex products that include a wide array of features and characteristics. There also is a lot of configuration of cars before you buy it. But in the usage stage, you can just adapt your seats and similar changes. With some future technology, customizing a car while you are using it, however, could go much further!

In general, think of an embedded auto toolkit as a user interface that is supposed to enable drivers to change certain features or vehicle characteristics of their car at any time after the purchase. This idea is based on the assumption that users develop new customer needs during the usage period of a product. By using the product the users realize needs that they did not think about when buying the product. Thus, by the means of an “embedded configurator”, certain design decisions are postponed into the user domain and the fit to market can be improved. You will get the idea from the scenarios presented in the survey, so please participate!

Survey in English language und in Deutscher Version

We will publish a summary of the feedings here! For more information on this project, contact me or Frank Steiner.

Context information:

- Our internal project site with background information on this use case.
- A link to the general project website.

Building a Customer-Centric Organization: IE Executive Education Program

IE Business School's Executive Education Division is one of the world's leading institutions to educate managers on recent business trends. Their Open Enrollment Programs have been ranked no. 5 worldwide according to the Financial Times ranking, May 2008.

Within this scheme, we are offering again our program

Building a Customer-Centric Organization: OUTPERFORMING YOUR COMPETITION IN PROFITABILITY

IE Business School, Madrid, Spain
9, 10 and 11 March 2009. [PDF of Program Brochure]

The program features all three facets of building a truly customer-centric organization:

- Mass Customization and strategic capabilities of offering truly customer-centric offerings
- User innovation and customer co-design
- Relationship marketing

It recently is the only program of its kind worldwide! So register now to participate!

About the content:

Heightened competition is forcing business leaders to recognize that the new foundation for profitability is establishing loyal, long-term customer relationships; to conceive themselves not as a group of products, services, territories, or functions, but as a portfolio of customers; to know how profitable each of their customers or customer segments are, and to understand why; to continuously innovate in order to improve their customer value propositions.

The challenge then arises when trying to manage the organizational complexity that surfaces when trying to implement a truly customer-centric strategy. Organizations must align all aspects of their business with the target customer-value proposition. In order to be successful in implementing a sound customer-centric strategy, everyone in the company needs to make decisions consistent with this strategy.

The program features three core modules:

• Strategic capabilities for customer-centricity, taught by Fabrizio Salvador:  Building a customer-centric organization is appealing but also difficult because it involves profound changes in virtually all the value-adding processes of a firm. Yet the payoff is potentially enormous. This module examines the fundamental capabilities that a company has to develop in order to become more customer-centric, and offers a birds-eye view of the scope and content of the organizational changes associated to customer-centricity. Special attention will be devoted to the issues associated to connecting front-end and back-end areas of the firm for fast and efficient adaptation to customer needs.
• Placing the customer at the center of the innovation process, taught by Frank Piller: A key challenge in new product and service development (NPSD) is to match new designs to customer preferences. The growing heterogeneity of demand, the advent of "long tail markets", exploding product and service complexities and the rise of the creative consumer are making this task more difficult than ever. This module will explore new strategies to navigate NPSD more efficiently by utilizing the firm's periphery for innovation.
• Focusing on the individual customer relationship, taught by Martin Boehm: Delivering what customers' value provides competitive advantage in today's business arena. No matter in which sector it finds itself competing in each company needs to focus on the customer's point of view not only to improve the customer experience, but also to increase the customer's contribution to the business. This module will explore how to determine the value of each individual customer for your business and how to retain the ones that offer the highest value, as well as, switching costs associated with their loss.

For more information, download the program brochure, or head to IE's website. http://www.execed.ie.edu/internationalprograms

IBM Analysis Finds Businesses Recognize Power of Consumers. Move to Leverage Trend for Mass Customization Predicted in 2009

Now is that time of the year where the consultants and analysts publish their trend reports again for the coming year. And as a blogger, you just pick the reports fitting to your understanding :-)  Here is one: The IBM Institute for Business Value, a group of consultants within IBM focused on human capital management, financial management, corporate strategy, supply chain management and CRM, today revealed the results of a consumer survey-based study. They advise their clients to remain focused on understanding and adapting to the needs of today's empowered and informed consumers as a means of differentiation in 2009.

In 2008, the rapid proliferation of mobile devices and rise of social networking have dramatically changed consumer expectations and behaviors and have impacted the future of many industries, the press report says. Consumers are in more control than ever before, and through the use of these tools, can easily rally fellow consumers to demand products and services that are tailored to them and improve their lives.

Further evidence of this growing consumer control point was noted in IBM's Global CEO Study, the largest study of chief executives ever conducted. CEOs pointed specifically to their own customer base as the source of the most important changes they will have to address, as two new and more demanding classes of customers emerged: the 'information omnivore,' and the 'socially-minded' customer.

Overall CEOs are planning a 22 percent increase in investments in the next three years to serve these more sophisticated and demanding customers. CEOs in the U.S., Europe and China indicated they plan an average investment jump of 19 percent at these targeted customers over the next three years.

"Consumers are becoming 'producers,' often creating entertainment and advertising content for their peers while demanding flexibility and responsiveness from companies with whom they choose to do business. These customers are more demanding; however, the majority of CEOs do not see them as a threat, but as an opportunity for differentiation -- based on meeting the heightened expectations of this group, and capitalizing on new market opportunities that will emerge," said Peter Korsten, Global Leader, IBM Institute for Business Value. "Dealing with this new breed of consumer in the midst of a whole new economic environment will play a major role in companies' agendas for the foreseeable future."

So for anyone interested in customer-centric strategies, this is good news: In 2009, our topics still have value beyond (or because of) the general financial crisis.

Context: Read the full press release by IBM with links to the individual studies.

Happy Holidays and a Great Start into 2009

Despite all financial crises, 2008 was a very successful year for our research groups at RWTH and MIT, and also a rich year full of experiences for me with the opportunity to meet many new interesting people and learn from them. And 2009 promises to become a great year as well, with several large-scale projects on mass customization and open innovation starting or taking full pace in the next months.

Also, in October 2009, the next MCPC conference will take place (in Helsinki), gathering our broad community of mass customization & personalization researchers. Given the large success of the MIT 2008 Smart Customization Seminar, we also plan to have another Executive seminar at MIT to provide a platform for the North American market.

But now, there are a two holiday weeks to rest and read and recharge (and perhaps write some of the blog postings I started but did not finish).

Happy Holidays and All the Best for 2009!

The Top 20 of Mass Customization: A closer view on the agenda of the MIT Smart Customization Seminar

The upcoming Smart Customization Seminar at MIT will gather a great group of individuals representing some of the most advanced and interesting businesses in mass customization today. The seminar is targeting executives in the mass customization market and companies interested in launching a mass customization business or applying some of its principles to boost an established business.

Here is a more detailed look on the program with some comments. Participate at this unique event and register today!

For the full program, go the the seminar's web site at MIT.

---

MONDAY, NOV 10, 2008 (starting at 2pm)

---

Introduction & opening addresses: Frank Piller & B. Joseph Pine II, MIT Smart Customization Group: Joe Pine and I will start the seminar with two short keynotes highlighting key aspects of matters today in mass customization. We also want to provide a framework how to navigate the two days during the seminar.

Mass Customization Leaders: Adidas, Alison Page, Director, Mass Customization: Adidas' mass customization offering mi adidas is the premier example of custom sports wear since 2001, combining customization in all three dimensions: fit, style, and functionality (performance). Alison Page will talk about the learning of establishing the customization business unit within a global corporation.

Mass Customization Leaders: Business-to-Business Leader
We are talking to one of the most advaced examples of BtoB customization. Come back to see who will be speaking in this slot.

Mass Customization Next Generation: Spreadshirt, Inc. Jana Eggers, CEO
Spreadshirt represents a new breed of mass customization, combining personal creativity with the power of the social web. Spreadshirt has recently made it into the Top 5 European Growth list "Europe's 500". CEO Jana Eggers will share her experiences with leading a major customization brand, connecting average consumers, artists and corporations like Samsung, Coca Cola, or Chuck Norris.

Open Space discussion: Defining your mass customization strategy
Meet with a smaller group of peers to discuss your mass customization challenges and experiences. Groups will be facilitated by a leading professor in the field, providing also first-hand insight into the latest research to master your challenges.

Reception and networking dinner in the MIT Faculty Club

---

Tuesday, NOV 11, 2008

---

Opening address: William Mitchell, MIT Smart Customization Group, is a Professor of Architecture and Media Arts and Sciences at MIT and directs the Media Lab's Smart Cities research group. Before coming to MIT, he was Professor of Architecture and Director of the Master in Design Studies Program at the Harvard Graduate School of Design. He also taught at Yale, UCLA, Carnegie-Mellon, and Cambridge Universities. He holds a BArch from the University of Melbourne, MED from Yale University, and MA from Cambridge. He is a recipient of honorary doctorates from the University of Melbourne and the New Jersey Institute of Technology. In 1997 he was awarded the annual Appreciation Prize of the Architectural Institute of Japan for his "achievements in the development of architectural design theory in the information age as well as worldwide promotion of CAD education."Mitchell is currently chair of The National Academies Committee on Information Technology and Creativity.

Mass Customization Leaders: Masters in Configuration, Lars Hvam and Niels Henrik Mortensen, DTU and Co-authors of "Product Customization": Lars Hvam and Niels Henrik Mortensen are co-authors of the 2008 book "Product Customization: Designing Configuration Systems". Configuration is a key capability for mass customization. But setting up a configuration system is a holistic task that demands much more than just dealing with IT. Lars and Niels developed a methodology to implement a configuration system that helped pump manufacturer Grundfos to react on customer orders in 3 minutes instead of 3 days. American Power Conversion (APC), an infrastructure provider for data centers, could reduce its delivery time from 400 to 16 days. Learn from these and other examples how the latest methods for designing modular product architectures and configuration toolkits can improve the efficiency and customer satisfaction in your mass customization business.

Mass Customization Supply Chain Enablers: CustoMax.com, Bas Possen, Founder & CEO: "In general, too little use is made of the advantage, that all people are different." That's the credo of Bas Possen who manages Europe's largest network of retailers for mass customization, combining multiple vendors of custom goods and retailers on one single platform, both online and offline. Bas Possen brings more than a decade of experience in mass customization to the meeting, having established a number of successful companies in the field.

Mass Customization Entrepreneurs: Meet the next generation of mass customization: Following MIT's entrepreneurial spirit, we proudly present some of the best upcoming new ventures in mass customization. Learn from the founders what motivated them to invest in a mass customization business and get the latest insights from their research and experiences.

Paragon Lake just secured more than $7 million of additional financing, demonstrating ist leadership in the custom jewelry industry. Tikatok is an award-winning idea that empowers children to create their own books and get them produced in large or small quantities. MyFactory and Proper Cloth are start-ups of resent MIT Sloan School graduates in the field of custom fashion and apparel. Look for their latest ideas how they want to differentiate their sites in a crowded market. Sole Envie targets to become the first company in the US selling custom made footwear to women with a high design appeal.

All companies will be presented by their founders and CEOs and will provide a great opportunity to learn about what's hot in the customization market today and what market & technology trends are coming up.

Matt Lauzon, Co-Founder & CEO, Paragon Lake (Jewelry)
Sharon Kan, President & CEO, Tikatok, Inc. (Children books)
Sasha Revankar, Founder, MyFactory (Fashion)
Seph Skerritt, Founder, Proper Cloth (Shirts)
Monika Desai, Founder, Sole Envie (Women's footwear)

Mass Customization Integrators: Zazzle Inside: How Zazzle's infrastructure enabled Keds to offer custom sneakers rapidly, Zazzle, Inc., and Keds Corporation: Zazzle is the only on-demand retail platform for consumers and major brands, offering billions of one-of-a-kind products shipped within 24hours. Users can instantly create, customize to fit their personal style, purchase, and sell a near infinite array of products online. In an exclusive partnership with sportswear icon Keds, the inventor of the "sneaker", Zazzle created its first line of fully customizable sports shoes. The presentation will share the creation of a new customization assortment for Keds.

Mass Customization Leaders: Swarovski: How a leading international brand co-creates products with their customers, tba, Swarovski, Inc. & Johann Fueller, CEO, Hyve AG:  Swarovski is the luxury brand name for crystals around the world. With sales of more than $3 billion, the Swarovski group is one of the largest players in its industry. Still, Swarovski's organization is very customer-centric. Recently, the company explored a number of co-creation and customization initiatives which will be presented in this talk. The co-presenter of this talk will be Johann Fueller, who was responsible for the realization and implementation of several customer co-design toolkits at Swarovski.

Mass Customization Next Generation: Desktop Factory, Inc., Cathy Lewis, CEO: The goal of Desktop Factory is to make 3D printing as common in offices, factories, schools and homes as laser printers are today. Just as laser printers became ubiquitous in the last decade, so too will new uses for 3D printing emerge as devices become inexpensive and widely available. Customization and personalization is the main driver behind this trend. Started in 2004, Desktop Factory is the leading company to build a manufacturing system for each customer for less than $5000.

Changing the Game: How Video Games Are Transforming the Future of Mass Customization, Ethan Mollick, MIT Sloan School: Some of the world's best configuration toolkits today are not being developed to sell automotives or complex machine tools, but videogames. In his presentation, Ethan Mollick will share the latest insights on configuration toolkit development in this industry and what you can learn from this to develop state-of-the-art toolkits for your business. With David Edery, Ethan Mollick is the co-author of "Changing the Game: How Videogames are Transforming the Business World" (2008, Pearson Education/Financial Times Press).

Mass Customization Next Generation: i-Fashion: The Future of Personalization Today. Chang Kyu Park, Director, i-Fashion Technology Center, Korea and Yongsoo Park, CEO, i-Omni Co. Ltd., Korea: Virtual representations of products and customers are a key capacity of successful mass customization & personalization. They match customers' preferences to products and configurations. The i-Fashion Consortium in Korea operates one of the world's most advanced set-ups of virtual reality. Using virtual models based on an Intellifit body scan, consumers get personalized recommendations of products they may like. At the same time, vendors' efficiency increases due to the virtual -- and not physical -- representation of products for most stages of the value chain. Chang Kyu Park will discuss present achievements if i-Fashion and provide recommendations on using virtual models in your organization.

Open Space discussion: Implementing Mass Customization: Meet with a smaller group of peers to discuss your mass customization challenges and experiences. Groups will be facilitated by a leading professor in the field, providing also first-hand insight into the latest research to master your challenges.

Closing comments by Frank Piller & B. Joseph Pine II, MIT Smart Customization Group

For the full program and registration, go the the seminar's web site at MIT.

The CEC Co-Design Contest: Open Innovation in the Footwear Industry

A year ago, I reported about the CEC User Co-Design Contest. Now, the results are in and the experiment is over. In the following guest article, Angelika Bullinger and Erik Hansen report about the contest. They are working at TUM Business School and were the project leaders of this contest. Here is their report:

During the last three to four years, we have seen a dramatic surge in interest in the principle of “open innovation”. “Open innovation” means the involvement of customers and other partners in the innovation process. By their creative input, many companies are significantly increasing their ability to source powerful products.

But how to meet with the creative minds outside your company?

For European shoe manufactures, an answer to this question is provided by the “CEC Co-Design Community (CE3C)”, a web-based platform that enables the integration of customers in the innovation process. The platform provides combinable modules for the interaction of the company with its customers and partners. For example, in the “mindstyle module”, customers get an analysis of their preferred style by intuitively selecting pictures out of number of photographs. The manufacturer gets information which trends are currently “hot”.

In another module, “product configuration” those shoes in the collection which can be customized are shown. By the data on individualized shoes, manufacturers are informed about customers’ preferences. Especially in combination, the modules of CE3C provide shoe manufacturers with rich information on their current consumers’ preferences. 

But preferences of current customers are not enough to your company? You want really innovative designs and get to know their creators? In this case, the “idea contest” is your solution. An idea contest is a forum in which passionate contributors from all over the world can exercise their creativity on account of a topic defined by the organisator. Prizes – and the recognition by the company – generate interest and drive participation. Typically, one company organizes an idea contest and submitted ideas are judged by a panel of employees.

The idea contest module of CE3C has already been very successfully tested - the “CEC Shoe Design Contest” was run between October and December 2007 on the platform. To involve customers more closely, a voting functionality allowed users to express their opinion on the submitted shoe designs. User votings were integrated the final decision-making on the winning designs.

The results of the CEC Shoe Design Contest have been very satisfying to the involved shoe manufacturers: In total, 63 highly innovative designs have been submitted. The active community of interested users (and submitters) has about 400 members who stem from nearly 50 countries around the globe. Both the unusual size of the community and the number of high-quality submissions indicate the power of the idea contest module of CE3C. The winning designs are currently manufactured and companies are getting in touch with the creative minds behind the designs.

You also want an idea contest for your company? You would like to meet with the still unknown designers? The CEC CoDesign Community (CE3C) stands ready for adaptation to your company’s particularities – and the established community only waits for the next idea contest on account of a thrilling topic. Let’s thus integrate and innovate!

For more information, contact Angelika Bullinger or Erik Hansen.

Here are some more results of the first contest in form of pictures:

Participate in Mass Customization Research Study (but only, if you understand German language)

Some old colleagues from TUM Business School are conducting a study to explore the differences between shopping for mass customization goods and normal products in the sport shoe industry. They need your help and about 20 mins. of your time to participate in a survey. Just answer the questions from the perspective of you, the consumer -- not a person interested in mass customization! Here is some more information:

Online-Befragung "Kaufentscheidung und Kundenzufriedenheit bei Laufschuhen"

Mit Ihrer Teilnahme an dieser Umfrage unterstützen Sie ein Forschungsprojekt der Technischen Universität München. Bitte nehmen Sie sich ca. 20 min. für die Beantwortung der Fragen. Als Dank verlosen wir unter allen Teilnehmern drei Einkaufsgutscheine von SportScheck im Wert von 100 Euro zusammen mit einer Teilnahmeberechtigung an einem SportScheck- Stadtlauf in einer Stadt Ihrer Wahl. Zur Umfrage geht es hier:  http://www.unipark.de/uc/Diplomanden_Accounts/c76a/  Für Rückfragen können Sie sich jederzeit an Herrn Dennis König wenden (denniskoenig@hotmail.com).

Mass Customization in Clothing & Fashion: Annual Conference of the European Technology Platform

Thursday May 29th 2008, 9.30 – 14.30 in Brussels, Belgium.
Pre-Conference on May 28th, 9.20 - 17.00 h

EURATEX, the European Association of the Textile Industries, is running its third conference on mass customization in the textile and clothing industry. It is the main European networking meeting for this sector and presents an excellent opportunity to connect with industry, technology providers, and EU policy makers.

More than 200 participants from industry, academia, public authorities and the media attended last year’s Technology Platform conference and the organizers expect at least a similar attendance this year.

A range of industry speakers are scheduled to describe their own experiences and business cases in the field of Mass Customization. The European Commission will present its policies and programs to support more Research & Innovation in the industrial sector in general and the textile and clothing sector in particular.

This event will be preceded on May 28th by a full-day pre-conference which provides an overview of recent mass customization related projects funded by the EU.

For the full program and more information, please download this PDF.

Attendance of the conference including lunch and cocktail is free of charge. Registrations are handled on a first come, first served basis.

A registration form is here, and more information on accommodation in the conference hotel can be found here.

Contact for organizational & logistical questions
Paulette De Wilde, Euratex (Ph : +32-2-285.48.83, paulette.de.wilde@euratex.org)

Ultimate Customization: Design and Deliver - a new project that examines the next era of mass customization

A guest article by Daniel Eyers from the Cardiff University Innovative Manufacturing Research Centre (CUIMRC). CUIMRC is a new center at Cardiff University in the UK. In this post, Daniel describes about the mission and research at this center.

Imagine the opportunities that exist when the freedom of design opportunities afforded by Mass Customisation can be realised using innovative Rapid Manufacturing technologies, where one-off custom manufacturing is the norm, not the exception. As these technologies mature and become increasingly accessible to end-users, will this enablement of Mass Customisation be achievable? If so, what will be the effects of customised demand for business when compared to traditional Mass Production?

Cardiff University Innovative Manufacturing Research Centre (CUIMRC), funded by the Engineering & Physical Sciences Research Council, is the UK’s leading research centre in the field of sustainable manufacturing R&D. Ultimate Customisation: Design & Deliver is a new project that examines the concept of Ultimate Customisation, the next era of Mass Customisation. Ultimate Customisation will involve much greater personalisation, where customers actively take part as co-designers and thus contribute to the value creation. The project aims to understand the viability of Ultimate Customisation using advanced manufacturing technologies such as those associated with Rapid Manufacturing. In this project we explore the possible implications of Rapid Manufacturing within a consumer facing environment, challenging traditional mass customisation production economics and disrupting existing commercial logistics, distribution and marketing paradigms.

Our previous consideration for Mass Customisation of logistics (through the McCLOSM study) demonstrated the implications for businesses in customising both logistics and manufacturing, and now that this project approaches its conclusion, the Ultimate Customisation: Design & Deliver project will continue to examine the implications of Rapid Manufacturing technology.

Considering the current status of knowledge, we have found that extensive literature exists for Mass Customisation, and separately, Rapid Manufacturing. However, as a result of rising individualism of consumer demand together with the technological improvement of Rapid Manufacturing, we believe these concepts will increasingly be implemented together in the short term. Despite numerous companies actively engaged in this field, as yet the body of knowledge analysing the overall topic has as yet received little research attention.

As a research centre, CUIMRC aims to help industry through creating greater understanding of the complex interrelationship between economics and environmental and social factors in developing a truly sustainable business. Our approach to research is to actively engage closely with our research partners and their associated supply chains in order to get an impartial, first hand viewpoint of their particular situation, while also allowing us to maximise the relevance and usefulness of our research outputs. Industrial secondments in which our researchers spend time embedded within host organisations have proven an extremely useful mechanism in this respect. We engage with stakeholders on several other levels, ranging from their participation in surveys and focus groups through to collaborative partnerships on individual projects and strategic input to the consortium through representation on our Steering Group.

The Ultimate Customisation project involves a number of collaborative industrial partners embarking on Rapid Manufacturing-Enabled Mass Customised production and through case studies and modelling approaches, we are exploring both demand and supply management implications arising from Mass Customisation. For the organisations involved in the project, our research aims to provide a clear understanding of both their present and prospective supply chains through ‘what-if’ simulations of futuristic business models for Ultimate Customisation. Additionally, from these assessments we can also assist in the optimisation of processes to directly benefit their business. The collaborative partners represent a cross section of industry, including highly experienced designers and manufacturers with capabilities both for rapid manufacture of customised products and traditional mass production.

During our research we anticipate making a number of Ultimate Customisation publications based on our research findings, many of which will be linked to our industrial collaboration. A warm invitation is extended to any individuals or organisations wishing to become involved with the research or receive project updates/dissemination information to register their interest with us.

Contact for more information Daniel Eyers (eyersDR@cf.ac.uk) or Hartanto Wong (wongH@cf.ac.uk).

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.

New Blog on Mass Customization and Rapid Ranufacturing and how this will influence the design profession

We dont do retro is the personal blog of Matt Sinclair, a designer based in Helsinki. I first met Matt on the MCPC 2007 conference and then again last week on a workshop in Helsinki, and he does REALLY interesting work on user co-design.

His blog mainly concerned with mass customization and rapid manufacturing, which are the areas he researching for his PhD at Loughborough University in the UK. But you’ll also find information about other subjects that interest him - lead user innovation, open source design and industrial design in general (Matt also wrote one of the most extensive MCPC 2007 reviews)!

His Ph.D. is titled "An investigation of the feasibility of product architectures to facilitate consumer-created designs in the consumer electronics industry, using rapid manufacturing technologies as an enabler"

While he expects not to be ready before Summer 2010, his early thoughts already are quite interesting:

"Rapid Manufacturing (RM) is defined as the direct production of finished parts or products, most often utilising one of a number of 3D printing technologies. ... The most important difference between rapid manufacturing technologies and traditional mass manufacturing technologies such as injection moulding is the absence of tooling. This has a number of important implications. One of the common features of mass manufacturing processes is that the means of production require substantial initial investment, however once in place the cost of manufacturing a single part or product (relative to the initial investment) is negligible. It is therefore a basic principle of mass manufacturing that as the number of parts produced increases, the cost of production of each individual part decreases. This inevitably leads to uniformity, since even small design changes require significant reinvestment in tooling.
...

Mass customisation offers the possibility of designing for niche markets, in small production runs, but it will be impossible for a designer, or even a design team, to be an expert in all these niches. Designers will therefore need to accept the necessity of inviting consumers to take part in the design process, even to design their own products. Furthermore, rapid manufacturing reduces the level of technological expertise required to design functioning parts. It is therefore likely that consumers will begin to design and produce their own products whether officially sanctioned by a brand or not.

The purpose of the traditional design process is not just to impose a uniform aesthetic however, it also refines and rejects on the basis of ergonomics, durability, integration with other products and systems, cost etc. These are all areas in which the designer’s expertise is the best tool to resolve the conflicting demands of a product brief. To make sense of the potential for multiple product variants which mass customisation offers, my hypothesis is therefore that the task of the industrial designer will in future be to create modular product architectures which define and limit the parameters of any possible design."

Go to Matt's blog here: We dont do retro

Great Report on User Manufacturing, Mass Customization, and How a New Infrastructure is Providing New Opportunities for SMEs

Last week, I got a note by Steve King, a research affiliate with the Institute for the Future. This is a non-profit research group based in Silicon Valley. Founded in 1968 by a group of former RAND Corporation researchers with a grant from the Ford Foundation to take leading-edge research methodologies into the public and business sectors, the IFTF today publishes reports to help people and companies to understand what is coming next.

They recently released a forecast report that is part of a series on the future of small business. In this report, they stress that small businesses will actively take advantage and use new manufacturing methods to create mass customized goods.

The report was sponsored by Intuit and can be downloaded on their website: http://www.intuit.com/futureofsmallbusiness/ (download Report #3)

In the report, IFTF writes about a new artisan economy that is the result of new manufacturing technologies, enabling individuals to access similar production technologies as large corporations (crafters using Ponoko, see previous posting, are a perfect example). It is a very nice summary of many of the recent trends that I have discussed here. Fabbing, blogging, user manufacturing, customization, open innovation -- it's all there and brought into a nice and coherent framework.

I especially liked the part about the new infrastructure that is enabling these developments:

"Plug-and-play infrastructures will make small businesses more competitive and successful. The ability of small businesses to take advantage of large-scale infrastructures and leverage new technologies will allow them to enter and compete in industries formerly served only by big business."

As an example, they refer to a great service that is enabling moms to become entrepreneurs, Mom Inventors, Inc.:

"For those who want to avoid teh hassle of assembling these services, firms are available to do everything for an entrepreneur. Mom Inventors Ic., for example, weill develop, manufacture, and sell quality Mom invented products throughout the United States and Europe. The mom (entrepreneur) only needs to come up with the idea, Mom Inventors will do the rest."

So I am expecting to these many more knitted marvels and clever kitchen aids on the shelves, invented by "Lead Moms".

In an e-mail exchange, Steve told me more about the background of the report, and stressed another implication from their research:

"A major issue we are trying to figure out is how small business relates to mass customization and user innovation. This was originally prompted by our work looking at consumer generated media - specifically blogs.

We found that the blogs with the most traffic were not authored by consumers, but by professionals. The professionals tended to fall into two categories: (1) small or independent businesses trying to build a small publishing business; or (2) professionals using blogs to promote either themselves or the goods and services of their company. Looking deeper at the second group, we found that most of them worked for small businesses.

Based on this work (which we did several years ago), we started looking at other categories. We quickly found a similar pattern of small business participation across a broad range of categories, including media (YouTube videos, etc.), open source software, crafts and small scale manufacturing (a lot of Makers at Maker Faire are small businesses, for example), financial services, etc.

Basically, we saw small businesses playing a role in almost every category where niche products and/or services were being built or highly customized. We also found a pattern of category "power users" moving from being hobbyists to starting their own small businesses. We kept seeing "prosumers" turning into small businesses, and we kept seeing small businesses somewhere in the customization value chain."

Accordingly, another area indicated in the report where small businesses will grow in the future is to serve as an innovation lab for larger corporations. Platforms like Innocentive or P&G's connect and develop program will help small businesses to sell their creativity to larger corporations in an efficient way. This may be the next wave of contract research.

Overall, a nice summary of recent trends that is worthwhile reading due its focus on small businesses.

Context: Get the full report here. http://www.intuit.com/futureofsmallbusiness/ (download Report #3)

User-led innovation: New report suggests a framework to structure forms of interactive value creation

strong>"User-led Innovation: A New Framework for Understanding Business and Social Value" is a new report published by the Smart Internet Technology Research Group in Australia.

The report reveals some of the major drivers of user-led innovation and explores how it is affecting organizations' relationships with key stakeholders. It investigates how user-led practices generate business and social value through a major case study of the virtual world Second Life.

A first part by Darren Sharp presents a comprehensive analysis of the structural changes behind the rise of user-led innovation, and develops a model of an emerging ‘User-led Services Ecology’. The second part by Mandy Salomon presents a practical case study of the 3D virtual world Second Life, an important site from which to explore advanced user-led practices, business strategies, and new forms of social engagement.

A nice feature of the report are extensive quotes from interviews with some of the key persons in the user innovation world, including: Eric von Hippel (MIT), Yochai Benkler (Harvard), Jimmy Wales (Wikipedia), Siva Vaidhyanathan (Virginia), John Howkins (Adelphi Charter), Michel Bauwens (P2P Alternatives) and Mitch Kapor (Linden Lab).

The report distinguished between four different fields where user-generated value creation unfolds:

"Widespread convergence of participatory culture, DIY media, collaboration and open exchange, along with decreasing processor, bandwidth and storage costs, have all driven the development of user-led practices across a range of disparate fields. This is leading to the emergence of a post-industrial innovation system that brings with it new production processes, content models, service platforms and licensing agreements.

In contrast to various forms of market-based transactions, user-led practices encompass their own distinctive value systems, motivations and principles governing cooperative forms of social exchange.

This report identifies four ‘user-led niches’ which have become sophisticated enough in their own right to warrant further investigation. Each niche embodies a major driver of the new post-industrial innovation system in the present era of distributed capitalism. These drivers play an important role in shaping the future development of user-led services, and comprise their own unique internal logic, economic model, source of value and objective."

The four user-led niches identified are:
- Social Currency Niche
- Collaborative Niche
- Extractive Niche
- Hybrid Niche

For a summary of the characteristics of these niches, see the picture or read the entire report. I enjoyed the structure and think it provide a nice way to evaluate current developments in the field of interactive value creation. The report is available for download here.

Participate at Industry Benchmarking: How good is your configuration practice?

Exclusive survey by Aberdeen Group wants to evaluate how companies are profiting from configuration. I was asked by Aberdeen to support this survey, and given their questions, I believe it is a good initiative.

How do you customize or configure your products to specific customer preferences, while maximizing profitability? The Aberdeen Group is looking to answer that question.

If your company offers a mass customization configurator, weigh in on the debate by taking a short 10 minute survey.

Each respondent who answers the survey will receive a complimentary full copy of the report containing this study's results (a $399 value). This report allows you to benchmark yourself against your industry peers. Individual responses will be kept strictly confidential and data will only be used in aggregate.

Questions the survey wants to ask:

# How do you capture and validate what your customer wants?

# What are you doing to develop accurate, yet timely quotes?

# Do you have anything in place to help automate repetitive or tedious steps of the sales or design process?

# Is reducing rework and returns of tailored products a concern for you?

Share your experiences to help us identify best practices for producing customized products that drive profitability.

We greatly appreciate your participation in this research effort and look forward to sharing our findings with you. BUT: Please only participate in the survey if you are offering customizable products in any industry.

Go here to the survey: aberdeen.com/survey/CustomIIMCP

Invitation: European Conference on Sports and Innovation

Are you interested in the future of sports and mass customization in the sports goods industry? Then you should join this upcoming conference.

12 to 14 March 2008 in EINDHOVEN, Netherlands

The conference is an initiative by the European Action Project INNOSPORT.EU. In this project, a number of the core players of the European sports goods industry brainstormed in the last year how to create a better platform for this important industry. I was invited to join the advisory board of this project, as mass customization and user innovation are regarded as some of the key trends in this sector.

The results of this coordinated brainstorming will be presented on the conference. This also is THE KEY EVENT if you are interested in participating in European projects around this sector.

Topics to be discussed on the event:

Sport vision 2015: What social trends are there in relation to sport? What developments are taking place in health and safety aspects? What impact can sport have on the economy? Where are the opportunities for innovation? The Sport Vision 2015 which will be presented at the conference will provide some insight into these issues about trends, needs, aspects and innovation opportunities. The programme also includes a number of workshop sessions and visits to field labs about football, sports promotion, gymnastics, swimming and horse-riding.

European platform: The European Sport Innovation Platform (ESIP) will be launched at the conference. This is a proactive networking platform at European level for high-tech companies, knowledge institutes and government, with the aim of joining forces in innovation and creating new opportunities as a result.

Free company presentation: We are pleased to offer you the opportunity to present your company free of charge during the conference. Please visit the website for more information.

International speakers who have already agreed to take part in the conference are Alberto S. Bichi – Secretary General FESI (Federation of the European Sporting Goods Industry), Antonello Marega – R&D Director of Tecnica, and Philippe Freychat – Vice-president Sporaltec and R&D Director of Decathlon.

Program and registration: For a detailed and up-to-date programme, please visit www.innosport.eu where you can also register for the conference.

Further contact: Marc van der Zande, TNO Science and Industry, marc.vanderzande@tno.nl

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

Crowdsourcing methods are McKinsey's Prime Business Technology Trends to Watch In 2008

In the recent issue of McKinsey Quarterly, the business journal of strategy consultants McKinsey & Co, James Manyika, Roger Roberts and Kara Sprague discuss Eight Business Technology Trends to Watch In 2008. Five of those eight relate directly to the topics of this blog:

Four trends, Distributing Cocreation, Using consumers as innovators, Tapping into a world of talent, and Extracting more value from interactions are sub-sets of the larger Crowdsourcing idea.

(1) Distributing co-creation is just another term for our own "interactive value creation" or Benkler's "commons-based peer production" or Don Tapscott's "Wikinomics". No doubt that this is a mega-trend which has been described widely in the last years but which practical implementation just has started. In consequence, McKinsey estimates that 12% of all labor activity could be transformed by more distributed and networked innovation:

"Outsiders offer insights that help shape product development, but companies typically control the innovation process. Technology now allows companies to delegate substantial control to outsiders -- co-creation -- in essence by outsourcing innovation to business partners that work together in networks. By distributing innovation through the value chain, companies may reduce their costs and usher new products to market faster by eliminating the bottlenecks that come with total control."

Interestingly, however, in the entire McKinsey article is no word on open source or open licensing models ("commons-based") which are a main driver for the efficiency of distributed open systems of value co-creation. This may be perhaps too much for the typical reader of McKinsey Quarterly.

(2) Using consumers as innovators: Well, not really a new trend, Eric von Hippel is saying this since the 1970s, and since the beginning of industrial production consumers are inventing new products. The new trend, however, is that firms are seeing this potential and they increasingly are utilizing the capabilities for innovation. They are not just asking for feedback on their own creations, but they are integrating consumers actively in the creation of something new. MyKinsey is quoting Threadless here, but this is not a correct example for this trend as most the creators at Threadless are no consumers but experts!

A better example, quoted by the iRise Blog in a posting on the McKinsey article, is Dell's IdeaStorm, and, on the B2B front, Salesforce.com. This software company is using an application for users to make suggestions to improve their CRM software. The top ideas from this contest is receiving executive-level visibility.

(3) Tapping into a world of talent is the consequence of opening your innovation and value creation process:. The people reacting on an open call for participation in the " Distributing co-creation" idea are those who are the most talented to do this work (as they have relatively lower cost to fulfill the job):

"As more and more sophisticated work takes place interactively online and new collaboration and communications tools emerge, companies can outsource increasingly specialized aspects of their work and still maintain organizational coherence. Much as technology permits them to decentralize innovation through networks or customers, it also allows them to parcel out more work to specialists, free agents, and talent networks."

This leads to a further consequence, and their next trend: (4) Extracting more value from interactions. The more a company is relying for value creation in its periphery, the higher is its costs for coordination compared to production cost.

"As a result, a growing proportion of the labor force in developed economies engages primarily in work that involves negotiations and conversations, knowledge, judgment, and ad hoc collaboration—tacit interactions, as we call them. By 2015 we expect employment in jobs primarily involving such interactions to account for about 44 percent of total US employment, up from 40 percent today. Europe and Japan will experience similar changes in the composition of their workforces."

This is nothing new at all, the fact, that the so-called transaction cost are dominating the overall cost in a modern economy is known since several decades. But it is good that McKinsey are stressing this relationship again – as mastering these cost will become a major capability for firms which want to profit from crowdsourcing. Technology is leading this path:

"Technology tools that promote tacit interactions, such as wikis, virtual team environments, and videoconferencing, may become no less ubiquitous than computers are now. As companies learn to use these tools, they will develop managerial innovations—smarter and faster ways for individuals and teams to create value through interactions—that will be difficult for their rivals to replicate. Companies in sectors such as health care and banking are already moving down this road. […] But: Creating the business case for investing in interactions will be challenging—but critical—for managers."

(5) A last trend from their report is "Putting more science into management". Technology is continuously helping managers exploit ever-greater amounts of data in real-time to make smarter decisions. One of the business models which are enabled by this data-driven management is mass customization, named by McKinsey as "the holy grail of deep customer insight":

"The amount of information and a manager’s ability to use it have increased explosively not only for internal processes but also for the engagement of customers. The more a company knows about them, the better able it is to create offerings they want, to target them with messages that get a response, and to extract the value that an offering gives them. The holy grail of deep customer insight—more granular segmentation, low-cost experimentation, and mass customization—becomes increasingly accessible through technological innovations in data collection and processing and in manufacturing."

Go to the original article which has plenty of good references for further reading (requires registration, for a version of the full text of this paper, go to ZDnet).

Public Lecture: Open Innovation and User Innovation (RWTH Aachen, 4. Dec 2007)

What is open innovation? What is user innovation, and what is the real idea behind the 'lead user' concept? What are tools and methods companies can employ to profit from these buzzwords? Why does it make economic sense? When does it make no sense at all? What have we learned from case studies and pilot studies in this field? And how is Webasto, a leading German automotive supplier, profiting from creative users & customers?

These are some of the questions Alexander Lang and I will address in a public evening lecture at RWTH Aachen on Tue, Dec. 4. The event is hosted by the German Association of 'Wirtschaftsingenieure' (industrial engineers)..

Alex Lang and I will also talk about our experiences from a joint research project on user innovation which is co-sponsored by "Stiftung Industrieforschung", a large grant giving institution on Germany.

This is the first public event I am organizing in Aachen at my new university. So a special invitation to come and discuss with us. The regular language for this event is German, but if we will have international guests, we will talk in English.

All information (in German language) and an abstract of our talks can be found in this PDF.

The event takes place on 4. Dec 2007, 7:15 - 9pm, followed by a network reception. Place: RWTH Aachen, Karmann-Auditorium, Room FO 5, at Templergraben 62 (opposite of the RWTH Main Building).

The lecture is free of charge, and no registration is necessary. Just come to the room!

Here is some more information for all of our German speaking readers.

Open Innovation: Neue Ansätze zur Steigerung von Effizienz und Qualität der Produktentwicklung

Eine öffentliche Veranstaltung (Eintritt frei!) in Zusammenarbeit des Verbands Deutscher Wirtschaftsingenieure (Hochschulgruppe Aachen), des Lehrstuhls für Technologie- und Innovationsmanagement an der RWTH, der Stiftung Industrieforschung und der Webasto AG

Vorträge:

Prof. Frank Piller, RWTH-TIM: Open Innovation und Interaktive Wertschöpfung: Prinzipien und Erfolgsfaktoren

Alexander Lang, Webasto AG: "Ideen aus der zweiten Reihe" - Strategien für kundenorientierte Innovationen in der Automobilindustrie

4. Dezember 2007, 19:15 – 21:00 und anschließender Network-Empfang
RWTH Aachen, Karmann-Auditorium, Raum FO 5 (Templergraben 62 gegenüber RWTH Hauptgebäude, 1. Stock

Abstract:
Open-Source-Software ist nicht nur ein technisches oder gesellschaftliches Phänomen, sondern das dahinter stehende Wertschöpfungsprinzip erweitert herrschende Prinzipien im Innovationsmanagement zum Teil völlig – auch in anderen Bereichen jenseits der Software-Entwicklung. Auf dieser Veranstaltung soll anhand aktueller Fallbeispiele diskutiert werden, wie durch eine solche Open Innovation Effizienz und Effektivität der Neuproduktentwicklung gesteigert werden können.

Kernidee von Open Innovation ist, eine Aufgabe nicht an den "besten" bekannten internen oder externen Entwickler zu vergeben, sondern das Problem in einem offenen Netzwerk in Form eines breiten Aufrufs zur Mitwirkung auszuschreiben. Potentielle externe Problemlöser entscheiden dann durch Selbstselektion, ob sie mitwirken oder nicht.

Im Mittelpunkt stehen dabei Strategien von Unternehmen, die ihre Kunden bzw. Nutzer nicht mehr als nur passive Empfänger und Konsumenten einer von Herstellern autonom geleisteten Wertschöpfung sehen. Vielmehr treten Nutzer als Wertschöpfungspartner von Unternehmen oder anderen Nutzern auf, indem sie Produkte oder Dienstleistungen mitgestalten und teilweise sogar deren Entwicklung und Herstellung bestimmen oder übernehmen.

Bei allen Potentialen von Open Innovation zur Effizienzverbesserung in der Entwicklung stellen sich jedoch auch neue Herausforderungen. Open Innovation ist nicht einfach ein "Outsourcing" interner Entwicklungsaufgaben an die Peripherie, sondern verlangt eine aktive Beteiligung durch den Anbieter, der hierfür bestimmte Ressourcen und Fähigkeiten besitzen muss.

Dies zeigt eindrucksvoll das Beispiel der Webasto AG, einen führenden deutschen Automobilzulieferer. Eine Neuausrichtung des Webasto-Innovationsmanagements betont entscheidend das Potential von durch Endkunden generierte Produktideen im Entwicklungsprozess. Die so entstehenden Produkte verfügen über einen echten Mehrwert, worauf Webasto als Automobilzulieferer mit überwiegend Sonderausstattungsprodukten eminent angewiesen ist. Generell wird es bei der Vermarktung von Sonderausstattungen zukünftig noch wichtiger werden, einen echten Endkundenmehrwert klar vermitteln zu können.

Dazu entwickelte Webasto zum einen eine umfangreiche Workshop-Methodik, mit der Kunden und potentielle Nutzer in die ersten Phasen der Produktentwicklung einbezogen werden. Zum anderen nutzt das Unternehmen ein interaktives, webbasiertes Tool, mit dem die Bewertung und Speicherung von Ideen vereinfacht und standardisiert wird.

Neben den Ideen, die aus den firmeninternen Quellen sprudeln, ist es hier nun auch möglich, systematisch „Endkundenideen“ mit in die Bewertung aufzunehmen. Dies ist der letzte Baustein, der die Lücke zwischen Zulieferer und Endkunde schließt. Im Vorfeld wurde eine Methode entwickelt, die es ermöglicht, aus einer beliebigen Gruppe von Endkunden mit Hilfe eines eigenen Testverfahrens so genannte "Lead User" zu identifizieren, die dann in mehrtägigen Workshops gemeinsam mit professionellen Moderatoren völlig neuartige Ideen generieren. Der Unterschied zur Gewinnung von Ideen durch die hauseigene Entwicklung besteht in der strukturierten Vorgehensweise, die immer zuerst ein Endkunden-Bedürfnis identifiziert, bevor Funktionen daraus definiert und schließlich in Produkte überführt werden.

Die Veranstaltung basiert auf gemeinsamen Forschungsarbeiten der Referenten, die durch die Stiftung Industrieforschung im Rahmen eines aktuellen Projekts unterstützt werden.

MCPC 2007 Starts: The International Mass Customization Community Gathers at MIT

Wow, these were a couple of very loaded weeks of preparing the MCPC 2007 conference. But now the fruits of all this work are there: Hundreds of mass customization enthusiasts are arriving in Boston to meet at MIT during the next days.

The conference will start tomorrow (Sunday) with pre-workshops and then the big opening keynote of B. Joseph Pine. Joe will discuss the origins of the mass customization movement that led to the MCPC, his views on the current state of the art, and where his continuing search for how businesses can add economic value through their offerings is leading him -- and where it could take us.

After Joe, Brennan Mulligan will present the latest from Zazzle.com. The company recently relaunched its website and introduced a number of new services that enable consumers to even easier create their own stuff and sell it to others in their own MC mini shop.

I am very excited to here what they will say – as the other 160 speakers in the remaining two days. But most exciting will be to meet

As you have realized, I did not find the time to blog really a lot during the last weeks, and will be very busy also during the conference. But the guys from the Openeur Blog are with us reporting from the MCPC, and I also think that Adam Fletcher from Spreadshirt / HipHipUK will post a line or two.

I will provide my comprehensive report after I return from Boston. If you cannot join us, there again will be the opportunity to order the conference proceedings with a full text version of many papers.

Talking about joining: If you do not have a private jet or live on the East Coast, it may be a bit difficult to arrive in time for the MIT event, but you still can make it relaxed and in time to the great MCPC 2007 Business Seminar at HEC Montreal on October 11th . It will provide a focused top-management-view on mass customization in retail and the future of virtual identities.

During the Montreal event, more than 30 top executives from the industry will talk, plus some very great keynotes from Don Tapscott and the leading Supply Chain Manager at Dell !!

Bikers Want Customized Motorcycle Seats, Custom Fit Study Finds

Motorcyclists are in favor of customizing their motorcycle seats according to their body geometry. A survey on customization of motorcycle seats carried out as part of the European funded project Custom-Fit, found that 81% of the survey respondents support the idea of a customized seat.

The Custom-Fit project is investigating new techniques for customizing a product based on Rapid Manufacturing (RM). The project is supported with almost 10 millions Euro by the European Community and is one of the largest projects in the area of customization (Disclosure: I am a member of the project’s scientific advisory board).

As explained in the previous posting, RM allows parts to be manufactured directly and automatically using 3D computer-aided design (CAD) model. The new technique will enable consumers to buy products that are built to the exact requirements of the consumers. A motorcycle customized according to body geometry is one of the products which the project is investigating. Other possible applications of the new technique include prosthetic sockets, helmets, mandible implants and knee implants.

The survey was recently carried out by Loughborough University in UK, who is a partner in the project, and received 3200 responses from motorcyclists worldwide. In the survey, majority of the respondents owned a motorcycle and do not share their motorcycle with another person. Although only half of the respondents said that they had experience of discomfort from their motorcycle seats, but majority felt the discomfort during long distance travelling. In addition, more than half of the respondents are willing to pay a premium for the customized seat and many were willing to wait longer.

Professor Richard Hague, Head of the Rapid Manufacturing Research Group in Loughborough University, said: “These initial results show that there is wide support for customised goods – even if initially they are more expensive and take longer to produce.” (Note: Richard Hague chairs the Rapid Manufacturing Track at the MCPC 2007 conference!)

The next phase in the project will be to investigate the technical practicality of designing a motorcycle seat based on the scan data of the consumer’s body profile. Research on how to obtain the body geometry has already started and the project is is now working on defining a “comfort map”, which is a combination of the pressure map and the discomfort zones.

This result is used to identify the area on the seat which needs to be redesigned and the new seats will be testes on motorcycles. At the same time, the management issues involved in providing a customization service for motorcycle seats have also been studied. The project has identified the possible ways to offer the service to the consumers and is studying the supply chain implications of introducing such a service.

Context:

- More results from the Custom Fit project will be presented in several talks on the MCPC 2007 @ MIT !

- Custom-Fit is an industry led project to investigate the possibility of moving towards knowledge based manufacturing and customized production through integration of knowledge in Rapid Manufacturing, Information Technology and Material Science. Funded under the Sixth Framework Program, the project involves 33 partners from around Europe. The aim is to create a fully integrated system for the design, production and supply of individualized products. It has targeted product for implementing the new technology, including motorcycle seats, helmets, implants and prosthesis. Project homepage: http://www.custom-fit.org/

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.

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 http://www.mass-customization.de/mcpc07/

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.

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.

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.

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

MCPC 2007 Paper Submission System Finally Online -- Submit Your Proposal to Speak at MIT until April 2, 2007

The 2007 World Conference on Mass Customization & Personalization (MCPC) at MIT (Boston, USA) and HEC Montreal (Canada), October 7-12, 2007

Finally, and with some delay, the submission system for the MCPC 2007 is ready and online. You can now submit your speaking proposals for the upcoming World Conference on Mass Customization & Personalization (MCPC) -- the premier event in this area.

Bridging academic research and management practice, the conference provides an interactive and interdisciplinary platform to share ideas about mass customization strategies and to discuss the latest technologies and enablers.

For the first part of the conference, taking part on the MIT campus in Cambridge, MA (Boston area), we invite submissions and speaking proposals. The conference is designed to engage academics, business leaders and consultants in fundamental debates through a set of plenary presentations, discussion panels, and paper presentations.

We especially welcome submissions from managers and consultants reflecting upon the conference theme.

Download the most important conference info as PDF: the call for papers and a checklist with all information how to prepare your submission.

You can submit two types of papers:

Full papers: Max 25 pages (12pt font, double line spacing). Only full papers will be considered for the conference's Best Paper Award.

Extended abstracts: For work in progress (about 4-8 pages), but including also comments on the research question, the methodology, data and empirical methods used (if applicable), and discussion of the results.

To submit a paper (practitioners: presentation proposal), please use ONLY the online submission system on the conference web site (www.mcpc2007.com). All papers will be double-blind reviewed.

Important dates

April 2, 2007: Deadline for submissions (extended)
June 1, 2007: Final notification of accepted contributions
Oct 7-9, 2007: MCP Research & Innovation Conference at MIT
Oct 11-12, 2007: Business Seminar in Montreal

For the 2007 conference, we invite submissions for many different topics and themes in the field of mass customization and open innovation:. The following topics are just some examples:

Mass customization in practice

This track is open for submission of acting managers and entrepreneurs from mass customization and personalization businesses. We ask for presentations which do not focus on presenting just your company or business idea, but on sharing your experiences and success factors of executing mass customization.

Presentation proposals for this track should follow the general guidelines for submission (extended proposal introducing your mass customization offering, the focus of your talk, and some of the key results you plan to present). Proposals should be submitted with the online submission system.

Mass Customization Case Studies (Teaching)

The MCPC 2007 will be followed by a special session in Montreal focused on case studies for mass customization. The idea is to develop material to teach mass customization better. We invite submissions of case studies dealing with mass customization and personalization. Cases must be original work based on real events, people, and organizations. They must be accompanied by a teaching note and not have been previously published or accepted for publication. The presentation of the cases will be held in Montreal on October 12, 2007. Authors of the best cases will be invited to submit their work to a special issue of the International Journal of Mass Customization or a special issue of the International Journal of Case Studies in Management. Cases should be submitted with the online submission system and authors must follow the MCPC paper submission process and deadlines.

Special Sessions

Today, there are examples and applications of MCP in all industries and sectors. The MCPC 2007 does not focus on one particular industry, but wants to provide a platform to exchange ideas beyond disciplines and industry borders. We are however especially interested in applications and examples in the following fields where we recently see a lot of interesting momentum in MCP:

* Mass customization, personalization and user innovation in architecture, housing and construction
* Automotive Customization 3.0: Bridging pimped rides with option lists
* Mass customization of services, e.g., in the financial and hospitality industries
* Mass customization of health services & products (pharma-cogenetics)
* Extreme customizing: What can we learn from extreme, leading edge examples of customization and personalization.

But there are also many other tracks which provide plenty of opportunities to discuss your knowledge in the field.

Context information:
- Full call for papers with all information.
- Checklist with all information how to prepare and upload your submission.
- Previous posts with MCPC information.

Special Issue on Mass Customization Manufacturing of IEEE Transactions Published

The 2007/1 issue of the IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT features 13 papers on mass customization as part of a special issue on Mass Customization Manufacturing Systems. Thorsten Blecker and Gerhard Friedrich edited the following collection. As with most scientific journals, if you are not a subscriber or IEEE member, or have no access to the journal via your university library, getting access to the papers is very costly.

But here is a list of all articles, abstract are all available for free online:

- Selecting a Customization Strategy Under Competition: Mass Customization, Targeted Mass Customization, and Product Proliferation, by Cavusoglu, H.; Raghunathan, S.

- Product Development Cost Estimation in Mass Customization, by Tu, Y. L.; Xie, S. Q.; Fung, R. Y. K.

- Standardized Configuration Knowledge Representations as Technological Foundation for Mass Customization, by Felfernig, A.

- Management of Product Architecture Modularity for Mass Customization: Modeling and Theoretical Considerations, by Mikkola, J. H.

- The Development of a Component Commonality Metric for Mass Customization, by Blecker, T.; Abdelkafi, N.

- How Small and Medium Enterprises Effectively Participate in the Mass Customization Game
Ismail, H.; Reid, I. R.; Mooney, J.; Poolton, J.; Arokiam, I.

-Changeover Improvement: Reinterpreting Shingo's “SMED” Methodology, by McIntosh, R.; Owen, G.; Culley, S.; Mileham, T.

- Process Platform Planning for Variety Coordination From Design to Production in Mass Customization Manufacturing, by Jiao, J.; Zhang, L.; Pokharel, S.

- A Product and Process Modeling Based Approach to Study Cost Implications of Product Variety in Mass Customization, by Zhang, M.; Tseng, M. M.

- Exploiting the Order Book for Mass Customized Manufacturing Control Systems With Capacity Limitations, by Wikner, J.; Naim, M. M.; Rudberg, M.

- Integrated Configuration of Platform Products and Supply Chains for Mass Customization: A Game-Theoretic Approach, by Huang, G. Q.; Zhang, X. Y.; Lo, V. H. Y.

- Modularity as a Strategy for Supply Chain Coordination: The Case of U.S. Auto, by Ro, Y. K.; Liker, J. K.; Fixson, S. K.

- A Service-Oriented Architecture for Mass Customization—A Shoe Industry Case Study, by Dietrich, A. J.; Kirn, S.; Sugumaran, V.

Deutsche MC-Community (German MC Community): Montagekongress 2007 und Web 2.0 Report von z-punkt

This is a posting in German language with information on a German event and a new German Web 2.0 report.

"Kundenbindung durch reaktionsschnelle Montage" lautet das Thema des 20. Deutschen Montagekongresses, der am 6. und 7. Februar 2007 vom iwb-Institut der TU München veranstaltet wird.

Zu diesem Thema treffen sich an diesen Tagen in München Fach- und Führungskräfte aus dem Bereich Montage. Neben Informationstechnik und Logistik stehen diesmal die Flexibilisierung der Anlagentechnik sowie Baukastensysteme und low-cost-Automation im Mittelpunkt der Veranstaltung.

Referenten sind neben iwb-Institutsleiter Gunther Reinhart u.a. Adolf Kraus, Leiter Logistik und IT bei der BMW AG in Leipzig, Festo-Vertriebsleiter Deutschland Rolf Storr und Michael Freitag, Leiter Supply Chain Management und Logistik der Vaillant Group in Remscheid. Ich halte den Eroeffnungsvortrag am ersten Tag zum Thema Mass Customization und Open Innovation.

Das ganze Programm und weitere Informationen auf der Web-Site der Veranstaltung

------------------------------------------------------------------
Reminder: DIE Veranstaltung fuer die deutschsprachige MC-Community:

------------------------------------------------------------------

Web 2.0 Report von Z-Punkt

Z-Punkt, ein deutsches Trendforschungsbüro hat gerade den Web 2.0 Report veröffentlicht, der vor allem Managern, die sich über dieses Thema einführend, aber umfassend informieren wollen, Hilfestellung gibt. Der Web 2.0 Report liefert eine mfassende Analyse des Phänomens Web 2.0 im deutschsprachigen Raum.

Aus der Ankuendigung:

Web 2.0 – was ist dran? Von Consumer Empowerment und Geschenkökonomie schwärmen die einen – aber wer bezahlt die Rechnung? Eine zweite Dot.com-Blase bespötteln die anderen – aber ist das Netz nicht längst erwachsen geworden? Ein gutes Geschäft wittern dritte – aber was ist das Geschäftsmodell?

Der Report analysiert das Thema Web 2.0 aus der User-, Technik- und Businessperspektive. Und gibt so eine eher salomonische Antwort auf die Frage: Hype oder Quantensprung: Der Hype wird ver¬schwinden, das Phänomen wird bleiben – und an Bedeutung gewinnen. Web 2.0 ist keine neue „Version“ des Netzes, wie der Begriff suggeriert, sondern eine Metapher für einen evolutionären Wandel. Gleichzeitig steht Web 2.0 jedoch für etwas qualitativ Neues – für eine neue Art, wie User mit dem Netz umgehen, für neue Ansätze in der Webtechnologie und für einen neuen Zugang zum Business im Internet.

Der Report zieht drei Entwicklungslinien in die Zukunft:

- User-Driven Economy: Der User wird zum Wertschöpfungspartner
- Cybersourcing: Geschäftsfunktionen werden ins Netz ausgelagert
- Mash Up Your Business: Zukunftsmärkte sind Schnittstellenmärkte

Unternehmensprofile von vielen bekannten, aber auch etlichen nicht so bekannten Unternehmen, runden den Report sehr schön ab (z.B. 37signals, Flock, Netvibes, Nooked, qype, AllPeers, Cyworld, Outside.In).

Info: 115 Seiten als PDF im Querformat, Preis: 170 Euro inkl MwSt. Info und Bestellung hier. (HINWEIS: über den Exciting Commerce-Blog bekommen Sie den Report zum Sonderpreis von 140 Euro).

Kontext: Einen ähnlichen Report gibt es vom Erfinder des Begriffs Web 2.0, Tim O'Reilly: Web 2.0 Principles and Best Practices , O'Reilly Media, 2006, 101 S., PDF, 375$

Update on Music Personalization: Bas Reus analyzes Last.fm and Pandora Media

Some time ago, I wrote about different sites where you can personalize your music. Bas Reus, a student of information sciences at the University of Amsterdam, recently finished his master's thesis on customization in the internet economy, comparing different custom music services.

Now, Bas posted his entire thesis online. It is a great study on a good methodological and scientific level. His main research question is the relation between digital products, mass customization and variety. Building on earlier literature, Bas formulates a number of hypotheses on the relation between variety, the level of customization, the consumer search costs.

The case studies on Last.fm and Pandora show that variety does not necessarily leads to more complexity and higher search costs. On the contrary, Last.fm and Pandora try to increase the interaction between the site and the user to consumers to discover new digital products – and in turn benefiting from referral fees when users purchase this music.

His conclusions:

- Instead of lowering the average interaction length of time (as suggested often in the literature), it may be desirable to increase the average interaction length of time between the supplier and the consumer.

- Instead of lowering search costs for consumers, it is desired for them to discover as much as new products as possible.

- The thesis also stresses the "theory" of the long tail, where abundance of information is something to strive for, benefiting users. But this abundance needs useful customization possibilities to minimize the search costs for consumers.

Read his entire thesis here.

Context information:
- Older post on personalization of music.
- Bas Reus' Blog

MCPC 2007: How you can participate at THE mass customization event of 2007

Call for Papers and Pre-Announcements of the 2007 World Conference on Mass Customization & Personalization

Finally, more information about the MCPC 2007. The most important message of this long posting: Save your time and travel budget for Oct 7-12, 2007! At this time, the next World Conference on Mass Customization & Personalization (MCPC) will take place at MIT in Boston and HEC in Montreal – and it will become THE event of the MC event circuit.

We are in the moment in the heavy planning stage of the event here at MIT, but I want to share some more information here so that you can start thinking what YOU want to present on the MCPC!

The event: The biannual World Conference on Mass Customization & Personalization (MCPC) is the premier event for the Mass Customization community. Bridging academic research and management practice, the conference provides an interactive and interdisciplinary platform to share ideas about mass customization strategies and to discuss the latest technologies and enablers.

Download MCPC 2007 Flyer

In October 2007, the MCPC will include two parts:

Part 1, Oct 7-10, 2007: MCP Research & Innovation Conference. Hosted by the MIT Media Lab, Massachusetts Institute of Technology, in Cambridge/Boston (USA) with an interdisciplinary focus on the new advancements in the field.

The MCP Research & Innovation Conference is designed to engage academics, business leaders and consultants in fundamental debates through a set of plenary presentations, discussion panels, and paper presentations. In addition to the traditional functional conference streams of the MCPC conferences, we especially welcome submissions from managers and consultants reflecting upon the conference theme.

Part 2, Oct 11-12, 2007: MCP Business Seminar hosted by HEC (Haute Études Commerciales) Business School in Montreal (Canada), with a focus on applying mass customization & personalization in a retail setting.

The MCP Business Seminar wants to provide managers a practice-orientated, focused overview on mass customization applications and best practices. The 2007 topic is the application of customization & personalization in retail – leading to a total makeover of retail!

2007 Conference Theme: The objective of the MCPC 2007 is to extend the dialogue beyond today's boundaries and to explore the future of MCP. The theme "Extreme Customization" asks for leading-edge examples of customization, non-traditional and emerging new concepts of personalization. For the technology community, we attempt to identify critical research issues and technological challenges with a rigorous methodology.

Our manifesto is to shift the mass customization debate from a physical product perspective to a total life cycle experience. Mass customization should be more than just configuring a piece of hardware, but should be seen as the co-design of an entire system, including services, experiences and human satisfaction at the individual as well as at the community level.

Continuing the established MCPC tradition, we invite contributions from a wide range of specialists in the engineering and management community including architecture, industrial design, or visual arts, to participate in the larger debate of customization. Mass customization studios, a co-creation challenge, and several focused workshops will elevate the quality of exchange during the conference.

Questions for Discussion in the MCPC 2007. To start the discussion, here are some initial themes and related questions. We encourage participants and authors to engage in these questions and to bring forth their experiences from an interdisciplinary and cross-functional perspective.

System thinking and architectures

How can we design system architectures, extending the discussion of product families?
How can we define ecosystems for mass customization which span the entire product life cycle?
How does system thinking in MCP enable firms to search for new and underutilized opportunities?
What new kinds of capabilities do we need to produce, sell, and maintain MCP systems?

Business models for mass customization

How do we have to adapt, modify or expand established models in marketing and operations management to cover the new debate on mass customization? When do we need new models?
What are the different business models for mass customization? What are the contingency factors describing the preference for such a strategy?
Have we fully utilized postponement strategies for MCP?

Product versus service customization

What is mass customization of service? How is this different from product customization?
What are successful examples of service mass customization which go beyond the conventional, e.g., self-service kiosks?
What are the features of configuration toolkits for service customization?
What are efficient production systems for service customization?

Adaptability: feature or substitute

Adaptability, i.e. built-in flexibility embedded in a product, can both substitute customization delivered by flexible manufacturing or supplement the inherent flexibility of a customized product. How can we develop adaptable systems along the entire life cycle of a product-service-system?
How can we make products more adaptable ("hackable") so that users can adapt them?
What are the economies of adaptability? How to balance the trade-off between performance (cost) and adaptable capabilities?
How to design usable interfaces to utilize a product's adaptable features?

Individual versus community

What is the role of communities for mass customization?
Is personalization exclusive or non-exclusive of shared experiences?
How do online and offline communities effect customization (e.g., by setting trends, helping each other with the configuration, etc.)?
How do communities develop new mass customization offerings?

Emotion, experiences and happiness

Can you mass customize for emotions? How can we capture emotions in product-service-systems?
How does research on emotions help to build better products and services?
What is the premium customers are willing to pay for different experiences along the segments of the MCP product life cycle (e.g., willingness to pay for configuration, co-design, status, custom utility, adaptability, etc.)?
Does mass customization provide "happiness" to consumers (and what is happiness anyway)?

Choice, complexity and simplicity

What is meaningful customization? What are the rules for simplicity in MCP?
Do people want choice? How much is too much?
How can we support users to navigate a solution space?
How do we foster and utilize the creativity of users and customers?

Configuration system and rule sets

How can we change configurators from focusing on constraints and rules to fostering creativity and co-creation?
How can we expand user interfaces with more tangible and intuitive features?
How can we develop embedded configurators?
How can we substitute the pain of customization for the sales force by building integrated sales systems for customization, including the knowledge, tools, and attitudes for efficient customization?

Rapid manufacturing and personal fabricators

What is the state of innovative manufacturing concepts allowing flexibility with no cost penalty?
Where is mass customization manufacturing located (distributed versus centralized)?
Is rapid manufacturing here (to stay)? Is rapid prototyping becoming obsolete?
Are there alternative approaches for efficient flexible manufacturing?

Contradictions in mass customization

What is the relationship of simplicity to complexity in MCP?
What is the tipping point between standardization and customization?
What is the range between user innovation and custom configuration? When, and to which extent, do users customize and manufacture in their own domain and with their own means?
What is the relation of constraints in manufacturing (switching costs) to constraints coming from the entire environment (e.g., health and safety, branding, IP …)?
Are all customers suited for mass customization? Is mass customization suited for any business?

Profits, benefits, and value

What is the benefit and value of MCP? How does this benefit translate to value for individual stakeholders (customers, manufacturer, or retailers)? How can we capture this value from the perspective of an entire system?
How do we measure the value of personalization and customization?

Education & capabilities for MCP

How do we educate students in mass customization? How do we integrate mass customization thinking in established curricula (in a meaningful way)? (See also the call for teaching case studies below.)
How do we build the qualifications and capabilities demanded for mass customization in companies?
How can managers (and educators) unlearn conventional thinking when implementing mass customization?

Mass customization in practice

This track is open for submission of acting managers and entrepreneurs from mass customization and personalization businesses. We ask for presentations which do not focus on presenting just your company or business idea, but on sharing your experiences and success factors of executing mass customization.
Presentation proposals for this track should follow the general guidelines for submission (extended proposal introducing your mass customization offering, the focus of your talk, and some of the key results you plan to present). Proposals should be submitted with the online submission system.

Mass Customization Case Studies (Teaching)

The MCPC 2007 will be followed by a special session in Montreal focused on case studies for mass customization. The idea is to develop material to teach mass customization better.
We invite submissions of case studies dealing with mass customization and personalization. Cases must be original work based on real events, people, and organizations. They must be accompanied by a teaching note and not have been previously published or accepted for publication. The presentation of the cases will be held in Montreal on October 12, 2007. Authors of the best cases will be invited to submit their work to a special issue of the International Journal of Mass Customization or a special issue of the International Journal of Case Studies in Management. Cases should be submitted with the online submission system and authors must follow the MCPC paper submission process and deadlines.

Special Sessions & Themes

Today, there are examples and applications of MCP in all industries and sectors. The MCPC 2007 does not focus on one particular industry, but wants to provide a platform to exchange ideas beyond disciplines and industry borders. We are however especially interested in applications and examples in the following fields where we recently see a lot of interesting momentum in MCP:
- Mass customization, personalization and user innovation in architecture, housing and construction
- Automotive Customization 3.0: Bridging pimped rides with option lists
- Mass customization of services, e.g., in the financial and hospitality industries
- Mass customization of health services & products (pharma-cogenetics)
- Extreme customizing: What can we learn from extreme, leading edge examples of customization and personalization?

Paper Submission Process

We invite you to submit your best work on mass customization and related areas, addressing one or more of the questions asked before. All papers have to be written in English language. We prefer papers which are empirically grounded and go beyond pure conceptual contributions. We are open to a diverse set of quantitative and qualitative methods of empirical research. We especially seek papers which follow the idea of "engaged scholarship", i.e. which are relevant to both practice and research.

You can submit two types of papers (Page limits include references and figures):
Full papers: max. 25 pages (12pt font, double line spacing). Only full papers will be considered for the conference's Best Paper Award.
Extended abstracts for work in progress (about 4-8 pages), but including also comments on the research question, the methodology, data and empirical methods used (if applicable), and a discussion of the results.

The conference proceedings will contain short abstracts of all accepted papers. Authors of accepted papers can decide if they submit a (revised) version of their full paper for publication in the full-text proceedings of the conference, or just a summary version which does not compromise publication of the paper in top journals.

A number of highly respected academic journals expressed already their interest in featuring special issues with selected conference papers after the conference. We will try to facilitate this process for appropriate submissions.

To submit a paper (practitioners: presentation proposal), there will be an online submission system for this conference on the conference web site. Please wait with paper submissions until this system in installed and in place. Do not submit papers per e-mail directly to the conference chairs. All papers will be double-blind reviewed.

Important dates

March 19, 2007: Deadline for submissions
June 1, 2007: Final notification of accepted contributions
Aug. 1, 2007: Author registration deadline
Oct 7-9, 2007: MCP Research & Innovation Conference at MIT
Oct 11-12, 2007: Business Seminar in Montreal, Quebec

Note: ALL presenters and participants, including presenters from companies, have to register for the conference and pay the full registration fee (about 450 USD, 50% discount for students with student ID). There are no exceptions.

MCPC 2007 Program Committee – MIT Research Conference
Conference Chair: William Mitchell, MIT Media Lab, Massachusetts Institute of Technology
Conference Program Co-Chairs: Frank Piller, TUM Business School, Technische Universität München, and Mitchell Tseng, Advanced Manufacturing Institute, Hong Kong University of Science & Technology
Conference Coordinator: Ryan Chin, MIT Media Lab, Massachusetts Institute of Technology

MCPC 2007 Program Committee – HEC Montreal Business Seminar
Conference Chair: Jacques Nantel, HEC (Haute Études Commerciales) Business School, Montreal (Canada)
Conference Coordinators: Sylvain Sénécal and Jean-Francois Ouellet, HEC Business School, Montreal

More information:
- Download MCPC 2007 Flyer
- Past conferences: MCPC 2005 (Hong Kong) and MCPC 2003 (Munich)

Footwear Customization 3.0: The First Rapid Manufactured Shoe

Footwear customization brought to a really new level: Today, I had the opportunity to have the world's first working prototype of a totally new shoe concept in my hands: a 100% laser-sintered shoe. What looks like a normal shoe, is a real revolution and one of the largest achievements I have seen in the mass customization world.

The shoe, developed by Marc van der Zande from TNO Science and Industry (a Dutch research institute) and independent designer Sjors Bergmans of Sjors Bergmans Concept Design, comes out of the manufacturing machine as you see it in the pictures on the left – in one manufacturing process, no assembly required (only some finishing, polishing, etc.)! And no one cares any longer if each product is custom or just a replication of a standard design.

The TNO shoe concept, named 'Head over Heels', is the first application of rapid (digital) manufacturing technologies (more about RM) to an entire product in the footwear industry. Such a concept would allow the rapid customization of shoes to a radical extreme – without any of the constraints of conventional custom manufacturing mechanisms like the need for custom lasts, custom cutting of materials, and a new organization of the work process in manufacturing. With rapid manufacturing, a digital design (CAD) can be transformed directly into a tangible product.

In an earlier venture, UK-Based Prior2Lever introduced a soccer boot that contains a rapid manufactured component, the outsole. But the shoe developed by TNO goes much further. To come up with such a concept, the entire design of a shoe had to be redesigned. A flexible element in the sole allows for high flexibility, and integrated elements in the upper are providing flexible hold.

In the moment, this project is in the proof of concept state. According to a colleague who tested the shoes (in the first design just available in a 38 size), they are at least as comfortable as conventionally produced shoes. Future development will include a wider range of models (including a model for men) and an easily scalable design so that in the end a foot scan can automatically be transferred into a custom design. Also, manufacturing costs have to go down. Today, a pair of rapid manufactured shoes comes still with a heavy price tag of 600 Euros. But TNO project manager Marc van der Zande expects that production costs can be dropped to less than 100 Euro within a few years, given the present speed and scope of application of rapid manufacturing technologies in many industries. With this larger scale, materials and machine costs will become much cheaper.

For me, this shoe presentation today was a great glimpse into the future. Just think five years ahead: Then you may really get your feed scanned, and a moment later, your new shoes will be 3D-printed immediately in the store. With this, the long tail of footwear could be driven to an extreme! But most important, the 'Head over Heels' concept provides a strong further proof that digital manufacturing technologies like laser sintering are not just for prototyping any more, but are rapidly becoming a standard manufacturing technology.

More information on the 'Head over Heels' Laser Sintered Shoe:
- For more information on the footwear design, contact Marc van der Zande (marc.vanderzande AT tno.nl) or Sjors Bergmans (comengo AT gmail.com).
- The concept will also be presented on the TNO Symposium on Rapid Manufacturing, Evoluon Conference Center in Eindhoven, The Netherlands, Tuesday, Oct 31, 2006.

Context information:
- Jochen Krisch recently had a good overview on companies offering rapid manufacturing capabilities for everyone in his blog.
- John Marshall writes about the older, but still great application of rapid manufacturing for the lamps of the Benelux company Materialise.
- And my own more recent posts on customization of footwear, Open Source Footwear and the interview with Sergio Dulio on latest developments in this area.

Custom Fashion 2.0: How a new Korean project wants to lift mass customization in the apparel business to a new level

On Monday this week, the i-Fashion project was launched in Seoul, Korea. I was invited to speak at the opening event of this interesting initiative. Its objective is to create an entire infrastructure for mass customization in the fashion industry by integrating a number of technologies which today have not been applied in larger scale. Sponsored by the Korean Ministry of Commerce & Energy with about US $7 mil., it combines a consortium of 9 apparel companies and a few technology providers.

As you would expect from a high-tech country like Korea, the exhibition on the opening even was dominated by numerous huge flat panel screens. These screens were, however, no sheer illustration but actual part of a totally new selling process. The entire process builds on virtual models which are generated by a 3D body scan of a consumer. The customer can then create on a touch-screen kiosk her new apparel, including the design of the fabric. Designs are illustrated real-time on the customer's avatar. This avatar and virtual garments shall be also used in mobile applications (where South Korea is famous for) and traditional online shopping environments. Also this idea is not new, but has – to my knowledge – never been integrated in a real shopping infrastructure. One of the project partners, the Hyundai conglomerate, will open a test store in its department store chain already this year.

A co-speaker on an international seminar for this project was Prof. Nadia Magnenat-Thalmann, a leading expert in virtual modeling and the Director of University of Geneva's MIRALab. I had heard of this lab before, but was astonished to see the scope of its activities. Prof. Magnenat-Thalmann reported from her work as part of the LEAPFROG project, an European project with the objective to modernize and ultimately transform the European clothing sector into a flexible knowledge-driven high-tech industry. Drivers of the project are a radical move towards rapid customized manufacturing through flexiblization and integration of cost-effective and sustainable processes from fabric processing to customer delivery and a new focus on customer service. MIRALab contributed to this project with the development of a 3D virtual try-on platform, including real-time body sizing and cloth simulation.

Projects like i-Fashion and LEAPFROG are very important for the realization of mass customization in the clothing industry as they go beyond automatic pattern generation (based on 3D scans) or flexible manufacturing technologies, but try to create an integrated platform where most of the traditional physical design, manufacturing, and sales processes are shifted to the digital domain.

One of the interesting parts of the project i-Fashion project in this regards is the large scale application of digital-printing for high-end fashion items. This enables the efficient productions of individual patterns and may solve the problem of huge inventories which are required for customization on the component level. i-Fashion Project partner Yuhan-Kimberley demonstrated their latest existing technology during the opening event. I was surprised by the quality of the printing process, but also its speed and cost efficiency (comparable to normal paper photo printing). Also, the garments do not need any further processing or finishing after the printing process. This technology, which shall be improved even further in the project, but first of all integrated in a complete business model, could allow also the legions of custom t-shirt printer a more sustainable production technology compared to today's heat transfer process.

More project info in case you speak Korean: http://textile.konkuk.ac.kr/englishhome/index.html

Or contact the project;s director, Prof. Chang Kyu PARK from the Department of Textile Engineering at Konkuk University, Seoul (cezar@konkuk.ac.kr).

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!)

German: Special Issue of Die Unternehmung on Mass Customization (in German language)

(The following posting is in German language only as it covers a German language publication only. Sorry! )

Sonderheft "Mass Customization" der Fachzeitschrift Die Unternehmung (in GERMAN language)

Die Schweizer BWL-Fachzeitschrift (Die Unternehmung) hat unter Federführung von Prof. Manfred Bruhn ein gutes Sonderheft zu Mass Customziation mit starkem Marketing-Fokus herausgebracht (Ausgabe 3/2006).

Die Beiträge:

-- Kundenzufriedenheit bei Mass Customization: Eine empirische Untersuchung zur Bedeutung des Co-Design-Prozesses aus Kundensicht

-- Warum «Toolkits for User Innovation and Design» für ihre Nutzer Wert schaffen

-- Mass Customization: Strategische Option mit beschränktem nachfrageseitigem Erfolgspotenzial

-- Produktkonfiguration als Präferenzkonstruktion

Das Heft (Ausgabe 3/2006) kann für 17 Euro direkt beim Verlag bestellt werden: http://www.dieunternehmung.ch ==> Ausgabe 3/2006

Mass customization and The Long Tail -- A review of Chris Anderson's book

What a coincidence: Today I finally finished to read Chris Anderson's bestselling book "The Long Tail", and today Donal Reddington, editor of the MadeForOne blog, posted an extensive review of the book. Donal's review is worthwhile to read as it has a special focus on mass customization.

[ I assume that you are familiar with the Long Tail idea. If not, Wikipedia has a good summary, Chirs Anderson an entire website, and Wired the article that started it all ]

I enjoyed reading the book very much and recommend it to everyone interested in mass customization and open innovation. Even if the book is highly focused on digital goods, it provides a number of convincing arguments why firms need to find better answers on the growing heterogeneity of demand -- and what the role of users is to shape and provide this demand. But as Donal Reddington notes, The Long Tail is not a book on mass customization:

"It does provide examples of mass customization as evidence of the growing power of the tail, but it is principally about leveraging the potential of massive product variety.

The long tail concept presumes that the product is available - sometimes on a build-to-order basis, but more often from stocks already held. This aspect of the long tail idea is at odds with the mass customization idea, which presumes little or no finished stock inventory, with products being made only after they are sold. …

The growth of more ‘democratic’ markets is also shared between mass customization and the long tail. One example is the growth of peer production, where individual members of a large group propose new products (such as new music, Lego toys or t-shirt designs), which are then rated by their peers within the group. The most successful are then made available to the open market. This displays characteristics of both the long tail and mass customization. Also, the growth of the long tail make build-to-order more feasible in many markets. Lulu.com can publish a book for you and print copies in tiny numbers to fill orders on-demand."

I personally took away from the book:

-- The story of Sears, and how this company was founded 100 years ago to provide rural customers with more choice and variety;

-- A great argumentation regarding the "mass confusion" and "too much choice" debate: As Anderson correctly remarks, there is not too much choice, but just too little intelligent support and filtering helping users to deal with variety. This chapter of the book (the tenth) should be a must read for all people dealing with configuration systems for mass customization – as providing better choice for customers should be the core of any configuration toolkit.

-- The idea that measuring actual demand ex-post is better than today's dominant logic of forecasting and predicting demand by market research ex-ante. Anderson writes: "Rather than lumping consumers into predetermined demographic and psychographic categories, post-filters such as Netflix's customer recommendations treat them like individuals who reveal their likes and dislikes through their behavior." The same idea is the underlying logic of a co-design toolkit (when compared to a shelf with standard goods): Instead of making decisions which product configuration the majority of customers presumably would like, a co-design toolkits provides this choice to the customer.

The final chapter of the book, Anderson's glimpse into the future, tackles a topic that I have discussed several times in connection to mass customization (see earlier posting): the advent of rapid (digital) manufacturing technologies like laser sintering or 3D printing.

Donal Reddington: "Andersen rightly states that if digital manufacturing can be developed to output more complex products, then almost every market will become a digital market. In the same way that online music can be downloaded now, someday the design for pretty much anything else might be downloaded someday and manufactured at home. Then every market will be a long tail market, and the cost of carrying infinite variety of stock will be zero for everything."

So: Read this book, buy a 3D printer, and start your own Long Tail economy.

Buyers of custom products are a most desirable customer segment, a new Forrester Report finds

In the Exciting Commerce Blog, I today found a link to a new Forrester report by Carrie A. Johnson, addressing the old question "why consumers buy custom products" and who these users are. Her conclusion why manufacturers or retailers should serve these users with customized products despite the rather high costs of implementing mass customization: "It provides a new channel for manufacturers to reach out to buyers directly, and an opportunity to fine-tune their product mix based on direct observations of consumer behavior — consumers who are opinion leaders with greater than average influence."

Internet Retailer has some more information on this report (249 USD):

"Customers who design and purchase custom consumer products online tend to have more online experience and are tech friendly: 83% of custom purchasers have been online for five or more years, Forrester found. That compares with 66% of all online consumers. In addition, more than half of custom product purchasers have e-commerce tenure of five or more years, twice the rate of all online consumers.

Forrester also found that more than half of custom product buyers have a college degree or higher, compared with just 38% of all online consumers. Purchasers also have higher income levels, with 41% having household incomes of more than $75,000 a year, compared with 23% of all online consumers. Custom product purchasers also are more likely to be male.

Customer product buyers also are more likely to use multiple channels when shopping, according to the report. 42% like to research online and purchase offline, compared with 36% of online shoppers.

In addition, 54% of custom product buyers consider themselves natural leaders, versus 35% of all online consumers, and 18% consider themselves trendsetters, compared to 11% of all shoppers. “These beliefs carry over into action, with [custom product] buyers more likely to tell others about products that interest them and e-mail products that interest them to others,” Forrester said.

The study also found that the major concern for consumers wanting to buy products they build online is not being able to return a custom-designed product. Only 19% said they are unwilling to pay more for a custom product, and only 8% said they are concerned about credit card security for online purchases. “To make consumers feel comfortable with the process, allow them to return or exchange products they buy and make it clear that they have recourse if they have a change of the heart,” Forrester said. Greeting cards, jewelry, linens/home décor, apparel, footwear and accessories were the most popular items to customize online, Forrester found. "

Deutsche Mass Customization Community -- A Special for the German Mass Customization Community (in German Language)

(The following posting is in German language only as it covers German events and publications. Sorry! Continue to read in English here.)
Neue deutsche Publikationen zu Mass Customization und Open Innovation, neue deutsche Fallstudien und ein Hinweis auf eine spannende Veranstaltung vom 21-24. Juni bei Stuttgart.

(1) Interaktive Wertschöpfung: Open Innovation, Individualisierung und neue Formen der Arbeitsteilung Unser neues Buch zum Thema dieses Blogs ist erschienen !!

Das Thema: Open Innovation, Social Commerce und Mass Customization sind aktuelle Strategien, bei denen die Kunden eine neue Rolle bekommen: Sie sind nicht mehr nur passive Konsumenten, sondern aktive Wertschöpfungspartner. Kunden gestalten heute Produkte oder Dienstleistungen aktiv mit und übernehmen teilweise sogar deren gesamte Entwicklung oder Herstellung.

Aus betriebswirtschaftlicher Sicht kommt es damit zu neuen Formen der Arbeitsteilung. Das Konzept "Interaktive Wertschöpfung" (IWS) diskutiert die daraus resultierenden Strategien und Prinzipien und stellt eine neue ökonomische Theorie vor, die die neuen Formen der Arbeitsteilung erklären soll.

Das Buch steht in weiten Auszuegen kostenlos zum Download zur Verfuegung (Open Access). Mehr Informationen auf einer eigenen Web-Site: www.open-innovation.com/iws

(2) Mass Customization Buch bei Gabler in 4. Auflage erschienen

Mein "blaues Buch", das Mass Customization aus einer wissenschaftlichen Perspektive betrachtet, ist nun in der vierten, vollständig aktualisierten Auflage erschienen. Vor allem die Fallstudienübersicht im Anhang und die Literatur wurden überarbeitet, aber auch z.B. die Definition von Mass Customization konkretisiert. Wenn Sie eine der früheren Auflagen schon haben, lohnt sich der Kauf eher nicht (angesichts des hohen Preises, den der Verlag fordert), ansonsten freue ich mich über den Kauf.
Einen Auszug aus dem Buch als Download hier (PDF von Vorwort, Inhaltsverzeichnis, Leseprobe).

(3) Neue Fallstudien zu Mass Customization beim Symposion Verlag erschienen

Während das vorangehend erwähnte Buch eher wissenschaftlich ist, habe ich zusammen mit meinen Co-Autor Christof Stotko in unserem Buch "Neue Wege zum innovativen Produkt: Mass Customization und Kundenintegration" eine eher praxisbezogene Herangehensweise gewählt. Dieses Buch behandelt auch ausführlich die Verbindung zwischen Mass Customization und Open Innovation (Mehr Infos zum Buch, das Ende 2003 erschienen ist).

Eine Besonderheit dieses Buchs ist, dass sich jeder Leser dieses selbst konfigurieren und individualisieren kann. Dazu dient neben dem Grundtext vor allem ein ausführlicher Fallstudienanhang, geschrieben von verschiedenen Fachexperten. Dieser wurde nun um 10 neue Fallstudien ergänzt.

Die NEUEN Fallstudien im Überblick (teilweise handelt es sich um Aktualisierungen):

- My Personal Channel: Kundenindividuelle Fernsehangebote
- IKEA: Die individuelle Lösung für Ihre Küche
- InVIDO GmbH: Mass Customization in der Möbelindustrie
- Kfz-Versicherungen: Kann man Kundentarife individualisieren?
- Kreditkarten: Die eigene Wunschkarte konfigurieren
- Lands’ End Custom: Hosen und Hemden maßgeschneidert
- Karstadt und Maile: Zwei Konzepte für Herrenmode nach Maß
- NIKEiD: Individuelles Design von Sportschuhen
- Dynamic Packaging: Mass Customization in der Reisebranche
- Linel: Mass Customization in der Wasseraufbereitungsbranche

Alle Fallbeispiele können Sie zum günstigen Preis zwischen 4 und 6 Euro direkt beim Verlag beziehen. Die Auswahl erleichtert Ihnen dabei unser Fallstudien-Konfigurator (einfach "alle Beiträge anzeigen" lassen, die neuen sind eindeutig gekennzeichnet). Dort bekommen Sie auch mehr Informationen zu den einzelnen Fallstudien. Natürlich können Sie sich auch einzelne Abschnitte des Grundtextes des Buchs einzeln als PDF-Download erwerben.

(4) Open Innovation, Mass Customization und Innovationskommunikation – ein Executive Training im Communicate-Programm der TU München

21. bis 24. Juni 2006 im Schlosshotel Liebenstein, Neckarwestheim bei Stuttgart (Info)

Aus der Ankündigung: "Andere sprechen von Innovationskommunikation – wir nennen es „Communication and Leadership“. Denn Leadership heißt: Neue Dienstleistungen und Produkte entdecken, entwickeln und erfolgreich einführen. Und dazu gehört Kommunikation. Wollen Sie Innovationen zum Schlüssel des Erfolgs Ihres Unternehmens werden lassen? Kennen Sie die wichtigsten Prinzipien der Gestaltung erfolgreicher Innovationsprozesse? Haben Sie die Nase vorn bei der Kommunikation neuer Entwicklungen?"

Als Teil der Veranstaltung wird TUM Business School Professor Joachim Henkel eine ausführliche Einführung in Open Innovation und den Lead-User-Ansatz. geben. Ich werde einen Nachmittag zum Thema .Mass Customization. gestalten, mit besonderem Schwerpunkt auf Kommunikation und innovative Kundeninteraktion.

Die Teilnahmegebühr für ein Executive Training beträgt 2.350 € (zzgl. MwSt.). Bei einer Anmeldung bis zum 29. Mai 2006 zahlen Sie einen reduzierten Teilnehmerbeitrag in Höhe von 1.850 € (zzgl. MwSt.). Im Preis enthalten sind Tagungsgetränke, Mittag- und Abendessen sowie Trainingsunterlagen.

Das vollständige Programm finden Sie hier: http://www.communicate-program.de/580.0.html
Info-Telefon: +49 (0) 89 - 289 28481

Hinweis: Leider zeitgleich zu dieser Veranstaltung findet in Hamburg die wissenschaftliche Mass-Customization-Tagung imcm06+peto06 statt.

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

Special Issue of IJMassC on Competitive Advantage Through Customer Centric Enterprises – Advances in Mass Customization Research, Vol. 2

Edited by Frank T. Piller, Ralf Reichwald and Mitchell M. Tseng, International Journal of Mass Customisation, Volume 1 - Issue 2/3 – 2006 (ISSN: 1742-4208).

In 1993, when we started this field of research, our graduate students complained about not many reference articles, only a score of them on mass customization at that time. Today, we can identify more than 2,500 published papers on mass customization and personalization, and their number grows rapidly. To overcome the scope and speed issues of knowledge explosion in this area, the bi-annual World Congress on Mass Customization (MCPC) has been organized since 2001.

Among the more than 250 authors presenting their work at the MCPC 2003 conference (held at the Technische Universität München, Munich), we invited a number of authors to submit a chapter for a special issue, based on their representativeness of particular issues in the subject. After a long editing and publication process, these papers has just been published as a special issue of the International Journal of Mass Customization (IJMassC, 1 (2006) 2/3).

Read the editorial paper on "Competitive Advantage through Customer Centric Enterprises" by Frank Piller, Mitchell Tseng and Ralf Reichwald in full text here (free PDF download).

The other papers have to be purchased by the publisher. Here an overview of all papers of this issue (contact Inderscience directly to order the entire volume at a special price: Inderscience Enterprises Limited, Fax: +41 22 7910885, subs@inderscience.com).

The first four papers deal with the genus of mass customization, the co-design process between each individual customer and the manufacturer in order to specify a custom product. Margarita B. Guilabert and Naveen Donthu discuss the development of a scale to measure customer customization sensitivity to evaluate whether customers are interested in mass customization anyway. It seems obvious that if consumers are not interested in customization there is no need to pursue customization strategies. Consumers may be more or less inclined toward different types of mass customized products/services, and therefore, it is critical to know how important customization is for consumers. The paper presents an approach how companies can evaluate the likeliness of customers to evaluate a mass customization offering.

Given that a mass customization offering appears appealing for a customer, Sri Hartati Kurniawan, Richard H. Y. So and Mitchell M. Tseng evaluate in the next paper how the co-design process is perceived from the customers’ perspective. The paper reports the results of an experimental investigation of differences between product configuration and product selection in terms of consumers’ decision quality. The results show that configuration offers not only greater satisfaction with the resulting products (as compared with standard products), but also increases the satisfaction with the shopping process.

The following paper provides an in-depth look on the information systems enabling the configuration or co-design process. The special topic of Rosmary Stegmann, Thomas Leckner, Michael Koch and Johann Schlichter is how customers can be supported by such a system during their design task. While configuration systems enable customers to virtually assemble a product and find a fitting specification, customers must also learn how to deal with the complexity of the product model and of the configurator tool itself. Their paper introduces different approaches to overcome the problems of complexity and uncertainty associated with this customer tool interaction.

The implications of mass customization on business information systems, however, go beyond the implementation of configuration systems, as Andreas J. Dietrich, Stefan Kirn and Ingo J. Timm discuss in their paper. They analyze the impact of mass customization on future business information systems, with focus on globally distributed value chains. Using a case study from the footwear industry, the authors develop an innovative multiagent approach, which is using information represented with explicit machine-understandable semantics for coordinating and negotiating mass customization activities throughout the supply web.

The next contribution, co-authored by Jianxin Jiao, Lianfeng Zhang and Shaligram Pokharel, proposes an approach of process platform planning to support the variety synchronization from design to production. This is a basic principle of mass customization in order to reduce the internal variety of a product architecture and to create a stable solution space and stable processes, allowing for “mass production efficiency” as a main characteristic of mass customization. The authors show how a process platform is conducive to the synchronization of product and process variety.

Rebecca Duray supplements these insights about process planning for mass customization with her paper on the relation between a company’s capability of flexibility and quality and the financial performance. Her study tests within a sample of 126 mass customizing companies the tactical requirements of a mass customization strategy and finds that teamwork and worker flexibility lead to increased financial performance for mass customizers.

The paper by Thorsten Blecker, Nizar Abdelkafi, Bernd Kaluza and Gerhard Friedrich provides another contribution in regard to defining the processes of a mass customization system. Their analysis of flexibility capabilities of a mass customizer presents a number of key metrics to measure variety and complexity in operations and manu¬facturing related tasks. The result is an elaborated system to detect the levers that should be considered to keep variety induced complexity under control.

Moving from process to product structures, Udo Lindemann and Maik Maurer discuss the early evaluation of product properties for individualized products. They present a methodology for testing and evaluating product spectra and individual products with regard to lead time optimization. Recently, a number of design techniques have been developed to improve the design of custom-made products.

The paper by Janet K. Allen, Farrokh Mistree and Gabriel Hernandez strives to combine these techniques systematically, based on the formulation of the design of customizable products as a problem of optimal access in a geometric space. Their method is illustrated with the design of a line of custom-made hand exercisers.

The remaining papers of this issue deal with special issues of mass customization. Mikko Ruohonen, Jaakko Riihimaa and Marko Mäkipää present empirical insight generated from forty case companies in Finnish metal and electronics industries. Their results reveal four different clusters of mass customization strategies which can be also interpreted as knowledge-based business strategies, reinforcing the central role of knowledge management as a success factor of mass customization.

The development of rapid prototyping technologies into rapid manufacturing systems could become a main enabler for the efficient production of custom goods, as Christopher Tuck and Richard Hague discuss in their paper. The paper focuses on the effects regarding the logistics and supply chain infrastructure with the advent of rapid manufacturing.

Guixiu Qiao, Roberto F. Lu and Charles McLean discuss the manufacturing system planning for mass customization using a simulation model of component assembly line of Boeing aircrafts. Their focus is on the evaluation of information integration to derive a data-driven reconfigurable mass customization modeling methodology.

The issue’s final paper, contributed by Joachim Warschat, Mehmet Kürümlüogl and Rita Noestdal, provides an integrated perspective of the mass customization value chain. Based on the processes for marketing, sales, design, production and distribution, a case study from the footwear industry illustrates the demands of system and data integration along this process chain. The authors present an IT architecture to support an extended enterprise offering mass customized products.

Read the full abstracts of all papers here. You can also subscribe to this journal there.

Participate at a survey on Automotive Interior Customization and Personalization

Jacob Barhak, a Postdoctoral Research Fellow at the NSF Engineering Research Center for Reconfigurable Manufacturing Systems, College of Engineering, University of Michigan (jbarhak@umich.edu) asked me to post a link to the following survey on my blog:

"Imagine you can personalize your future car by designing its interior and visualizing it, prior to buying it. The technology that will allow such interior car design by the customer and then mass production of these personalized vehicles is not yet available. However, your help can assist research in this direction.

So how can you help if you're interested? If you can spare 5-10 minutes, please visit a web site that contains narrated presentations that explain the research. After viewing the presentations you may choose to help this research by participating in an anonymous survey.

Start with the survey here:
http://erc.engin.umich.edu/autosurvey/InfoRequest.htm "

New Special Issues and Web-Publications on Mass Customization and Open Innovation

Within the last weeks, several print or online journals have dedicated special issues to mass customization and open innovation. They contain some really great contributions on different aspects of these themes. So start browsing with this little collection:

Wood Digest – Mass Customization in the furniture industry. Wood Digest magazine is a monthly publication reaching over 51,000 woodworking professionals including those who manufacture cabinets, millwork and specialty wood products. The magazine provides global coverage of technical advances in equipment and supplies to assist its readers in overcoming productivity challenges.

The journal's January 2006 issue is dedicated entirely to the topic of mass customization – and I highly recommend to browse though it and read these articles. Especially the opening article by Don Shultz provides a great background story and general analysis. Other articles report about special application, case studies form the furniture industry or IT support.

Read the whole issue here.

How Open is the Future? A book on the Economic, Social & Cultural Scenarios inspired by Free and Open Source Software. This book offers a constructive and innovative look on the boundaries of intellectual property, as well as new and open forms of collaboration, not only situated in an academic and industrial context, but in musical and artistic spheres as well.

The book is released under a Creative Commons License – this means it is freely available online as full text -- and presents an interdisciplinary perspective how open source spftware can serve as a role model for many more ideas beyond software.

From the book's jacket:

"There are two reasons why the free and open-source software issue has become such an inspirational and powerful force today: the rise of the Internet and the growing tendency to protect all intellectual property. Internet technology made it possible to handle massive decentralized projects and irreversibly changed our personal communication and information research. Intellectual property, on the other hand, is a legal instrument which – due to recent excesses - became the symbol of exactly the opposite of what it had been developed for: the protection of the creative process. As a result, free-thinking programmers, scientists, artists, designers, engineers and scholars are daily trying to come up with new ways of creating and sharing knowledge. In 2003 Vrije Universiteit Brussel launched its university and industry network called CROSSTALKS, aimed at developing a new interdisciplinary exchange dynamic for key players in society. This first CROSSTALKS book provides an open, constructive platform for a wide range of researchers, lawyers, artists, journalists and activists invited to air their complementary – and sometimes contradictory – views and discuss future prospects for the driving forces of our time."

Read more and get this really interesting book at http://crosstalks.vub.ac.be

KPMG Study "Retailers Find That Customized Clothing Is the Right Fit: Apparel retailers are waking up to the reality of mass customization in clothing." This is the title of a KPMG study which is summarized on the "KPMG Consumer Markets Insider" web site. Worthwhile analysis and some nice figures:

"Mass customization isn't just about customer satisfaction, but also about pumping up margins. About 20 percent of the population wants custom apparel -- and they're willing to pay an extra 30 percent or more for it."

"Retailers have been developing sizes based on standards that date back to body measurements taken before World War II. But the United States has become taller and heavier than previous generations, and only 10 to 20 percent of Americans fit the national standards."

"About 54 percent of consumers have difficulty in finding clothes that fit and 68 percent don't bother to try them on because they find it such an unpleasant experience. Retailers that provide consumers with the ability to customize their apparel size, could earn up to 25 percent more per purchase."

Read the whole story here.

PO Monthly is a website for people interested in operations management. They regularly run special theme issues, and the latest was dedicated to mass customization. Topics include a general overview and discussion, a look on MC web design, and a great case study on mass customization in architecture. See the full issue here.

The Manufacturer, another online magazine for the manufacturing community, recently run a focus article on manufacturing, too. Pamela Derringer reports on general mass customization issues and explains the systems of Dell and LEGO in more detail.

The International Journal of Flexible Manufacturing Systems just issued a special issue on mass customization. Number 4 of Volume 16, guest-edited by Ashok Kumar and published by Springer, has four long academic papers on different mass customization aspects: Mass Customization: Metrics and Modularity, by Ashok Kumar; Mass Customization: Reflections on the State of the Concept, by Frank T. Piller; Process Variety Modeling for Process Configuration in Mass Customization: An Approach Based on Object-Oriented Petri Nets with Changeable Structures, by Jianxin (Roger) Jiao, Lianfeng Zhang and Kannan Prasanna; Mass Customization in Videotape Duplication and Conversion: Challenges of Flexible Duplication Systems, Fast Delivery, and Electronic Service, by Gregory R. Heim. Check the abstracts of all papers here.

However, to read the full text, you have to pay a VERY heavy price for each paper, so I do not advertise this more as it just supports an old and outdated business model (but the papers are worth it and great contributions to the field!). Check if your local university library has subscribed to the journal or if you find a full text database with its content.

Talking about outdated: The issue officially has the date "October 2004", which is strange as I wrote my contribution for this particular issue in summer 2005. There are probably good reasons of the publisher for this, even if these are beyond the understanding of their customers. But this is just another reason why open access publishing as proposed in the Crosstalks book mentioned before is a more sustainable model for the future.

Finally, a special issue on mass customization in GERMAN LANGUAGE only: OSCAR, eine hoch professionelle Studenteninitiative an der Uni Köln, hat ihren neusten OSCAR Trend Newsletter unter das Schwerpunktthema Mass Customization gestellt. Die im Web verfügbare Ausgabe enthält viele spannende Beiträge:

Mass Customization: Definition und Charakteristika von Detlef Schoder und Stefan Grasmugg geben eine Einführung in das Themengebiet und stellen einige der entscheidenden Merkmale heraus.

Exklusive Meisterwerke - vom Massenprodukt zum Unikat Professor Bruhnke ist Geschäftsführer der BMW M GmbH, einer 100%igen Tochter der BMW AG. Er ist neben den M Fahrzeugen und dem Fahrertraining auch für den Bereich BMW Individual verantwortlich – die wirkliche Individualisierung im Hause BMW (jenseits von Mass Customization). Bruhnkes Beitrag stellt die Historie und das aktuelle Angebot von BMW Individual vor und gibt einen Ausblick in die Zukunft.

Mass Customization: Prinzipien und Erfolgsfaktoren. Mein Artikel in diesem Newsletter beschreibt einige Mechanismen und Erfolgsfaktoren von Mass Customization.

Von der Mass Customization (MC) zur Seriellen Unikatfertigung (SU). Kristin Müller ist Geschäftsführerin des Möbelherstellers InVIDO GmbH. Die dort praktizierte "serielle Unikatsfertigung" ist ein Modell von Mass Customization in der Möbelindustrie. Müller beschreibt aus praktischer Sicht, wie sich Mass Customization in ihrer Branche darstellt und welche künftigen Entwicklungen sie für möglich hält.

Mass Customization - Kundenwunsch vs. Massenramsch von Nils Holle, Trend Recherche der OSCAR GmbH. Während seiner dreimonatigen Recherchetätigkeit für das Magazin hat er unterschiedliche Tendenzen und Strömungen der Mass Customization kennen gelernt. Vom Standpunkt des Beobachters zeigt er, mit dem unvoreingenommenen Blick des Verbrauchers, Grenzen dieses Themas auf.

Mass Customization Related Conferences in 2006: (1) ECAI Config Workshop -- (2) POMS 2006 MC Track -- (3) INFORMS 2006 Hong Kong MC-Track -- (4) MCP-CE 2006 -- (5) Adaptables 06 -- (6) IMCM 06 & PETO 06

Conference Announcements and Calls for Papers (Updated)

The next MCPC (World Conference on Mass Customization and Personalization) event will take place not before fall 2007. But there will several smaller meetings in 2006 which aim to provide a platform for exchange around specialized topics on mass customization.

The MCPC committee strongly endores these activities. We are glad that also other scholars step forward to give mass customization a larger platform. These events will be highly focused on specific urgent topics, providing a great opportunity to learn more about these topics.

Have a look at the following call for papers and consider your active contribution to these events:

(1) ECAI 2006 Workshop on Configuration
(2) POMS 2006 Boston - MC Track & Industry Panel
(3) INFORMS 2006 Hong Kong - MC Track
(4) MCP-CE2006 Poland - MC in East Europe
(5) Adaptables 06 The Netherlands - MC in Architecture Track
(6) IMCM 06 & PETO 06 Hamburg, Germany - MC Interaction & Configuration

--------------------------------------------

ECAI 2006 Workshop on Configuration

August 28-29, 2006, Riva del Garda, Italy, as part of the 17th European Conference on Artificial Intelligence (ECAI 2006) [ http://fmv.jku.at/ecai-config-ws-2006 ]

The 2006 Configuration Workshop continues the series of eight successful Configuration Workshops started at the AAAI'96 Fall Symposium and continued on IJCAI, AAAI, and ECAI since 1999. The main goal of the workshop is to promote high-quality research in all technical areas related to configuration and to bring together researchers and practitioners from industry and academia. The workshop is of interest for both researchers working in the various fields of applicable AI technologies and industry representatives interested in the relationship between configuration technology and the business problem behind configuration and mass customization.

Areas of Interest:

* Configuration problems and models
* Reasoning methods
* Interactivity & e-business
* Integration into the business process
* Applications, tools and case studies

We hope to attract a balance of innovative papers on theoretical issues, practical applications–preferably applying a well defined theoretical model–and thorough case studies. We also solicit papers on new configuration problem instances.

Workshop participation will be by invitation only and will be limited to 40 participants. If you wish to participate, submit either a full paper of no more than 6 pages (or 6000 words), or a position statement, short paper, or problem instance (at most 3 pages or 3000 words). See the Workshop's web page for details on the submission procedure.

* Paper submission deadline: April 15th, 2006
* Configuration workshop: August 28th-29th, 2006

Workshop Chairs and Organizers:

- Carsten Sinz, JKU Linz, Austria (carsten.sinz@jku.at)
- Albert Haag, SAP AG, Germany (albert.haag@sap.com)
- Claire Bagley, Oracle Corporation, USA
- Alexander Felfernig, University Klagenfurt, Austria
- Esther Gelle, ABB Corporate Research AG, Switzerland
- Barry O'Sullivan, University College Cork, Ireland

------------------------

(2) POMS 2006 Mass Customization & Personalization Track

Mass Customization & Personalization Track at the 2006 POMS Conference, Boston, MA, April 28 – May 1, 2006.

Submission of papers are encouraged which are pertaining, but not restricted to, the following themes:

• What is Mass Customization and Personalization from an Operations Management perspective?
• Are there examples of successes and failures with the adoption of Mass Customization and Personalization? And what can we learn from them?
• What competitive advantages can be derived from a Mass Customization and Personalization strategy?
• What do we really know about Mass Customization and Personalization?
• What do we not know about Mass Customization and Personalization?

Descriptive, theory building, and theory testing papers based on rigorous research methodologies are all welcome.

The deadline for submissions of abstracts is January 15, 2006. All abstracts must be submitted via the POMS website http://www.poms.org. The website is available for submitting abstracts beginning November 30, 2005. Abstracts should be limited to 150 words.

Submission of Full Length Papers: Submission of full length papers is not mandatory for participation and presentation of papers in the conference. However, participants may submit full length papers to be published in the electronic proceedings of the conference.

Track Chairs: Fabrizio Salvador, Instituto de Empersa; C. Forza, U Padova; Manus Rungtusanatham, Arizona State U

INDUSTRY PANEL: I have committed myself to organize an industry panel as part of this track. If you represent an interesting company DOING mass customization, please contact me (piller@mit.edu) so that we can discuss your part of this panel.

Conference Registration: All registration for the conference will be done on line through the POMS website http://www.poms.org\

------------

(3) INFORMS International 2006 Hong Kong - Mass Customization Track, June 25-28, 2006, Hong Kong

Mass Customization is coming back to Hong Kong as part of the International INFORMS conference. Prof. Mitchell Tseng, HKUST, is organizing a mass customization track as part of the Intl. INFORMS conference. You can participate by submitting an abstract until Jan. 15, 2006 on the conference web site.

Submit your abstract by January 15, 2006, at
http://www.informs.org/Conf/HongKong06
(be sure to select the Mass Customization Track during abstract submission).

------------

(4) 2nd International Conference on Mass Customization and Personalization in Central Europe (MCP-CE2006) (24-26 May 2006, Rzeszow, Poland)

How to bridge Mass Production and Mass Customization in Central European Countries?

The University of Information Technology and Management in Rzeszow (Poland) is hosting its second international conference dedicated to innovative business strategies, with a special focus on mass customization, in May 2006. The MCP-CE2006 is the 2nd event of its kind to approach the field of MCP in Central European Countries from an interdisciplinary perspective bridging scholar research and business practice.

The extended formula of the MCP-CE2006 includes a strong approach toward business practice. One of the key goals of the MCP-CE2006 is to discuss the development issues from the perspective of SMEs sector, which embraces over 90% of all companies in Central Europe. This issue will be addressed by keynote lectures, who will propose innovative and efficient approaches towards implementation, based on a close cooperation between industry and higher education sectors.

The conference organizers welcome abstracts/papers addressing the conference theme. Relevant topics include:

- Advances in MCP development in Central Europe
- Gaining competitive advantage through customer integration
- MCP best practices and case studies
- Manufacturing, logistics and supply chain management in the context of MCP development
- Information technologies as a key enabler for MCP
- Funding opportunity for innovative business approaches

Abstracts and speaking proposals are due om 28 February 2006. Conference organizer: Maciej Piotrowski (mpiotrowski@wsiz.rzeszow.pl)

More information and full text of call for papers and list of topics: http://www.mass-customization.pl/MCP-CE2006

---------------

(5) CIB W104 Open Building Implementation - Mass Customization in Architecture
, July 3-5, 2006, a TU Eindhoven, The Netherlands.

www.adaptables2006.nl

The call for abstracts is included in the website...the deadline is JANUARY 1, 2006.

CIB W104 Open Building Implementation will be part of the conference. We will be organizing at least two detailed case studies of realized open building projects. They will be presented by those involved in their
implementation. A panel of experts from a range of fields will have an opportunity to discuss the case studies, followed by audience participation in the discussion. This is particularly interesting because experts from the fields of building economics, architectural management and mass-customization can contribute substantially to putting open building practice in a larger intellectual and methodological persective...this should be a good way to engage in such interdisciplinary discussions. In addition to these in-depth case studies, we will have the normal paper sessions.

Chair: Stephen Kendall, Joint Coordinator, CIB W104, www.open-building.org

---------------
(6) IMCM’06 and PETO’06 (22-23 June 2006, Hamburg, Germany):

Joint Conference of The International Mass Customization Meeting (IMCM’06): “Customer Interaction and Customer Integration” and The International Conference on Economic, Technical and Organizational Aspects of Product Configuration Systems (PETO’06): “How to Build and Implement Product Configuration Systems”

This international conference is co-organized by the Hamburg University of Technology (TUHH), Technical University of Denmark and University Klagenfurt. Both events took place for a first time in 2004 (PETO) or 2005 (ICMC). This year, they team up to broaden its scope and reach.

The general objective of IMCM’06 is to discuss the new advancements in customer interaction and integration, which are of particular importance in order to ensure a successful implementation of mass customization. In fact, the scope of customer interaction and integration goes beyond the fulfillment of individual customer requirements within a given mass customization framework.

PETO’06 is dedicated to research related to product configuration systems. The benefits of such software systems for the automation of order fulfillment are well-known. However, building and implementing them still remain a challenging task. In fact, not only technological but also economical and organizational aspects are of high relevance in order for companies to put successfully these systems into practice. Topics

The conference organizers welcome abstracts/papers addressing topics relevant for customer interaction/customer integration and product configuration systems within the broad area of Mass Customization. Relevant topics include:

- Custom order control in MC manufacturing
- Customer needs’ elicitation
- Design and implementation of product configuration systems
- Design sales and engineering processes
- Implementation of configurators in practice
- Modeling a product assortment
- Organization effects of configurators
- Personalization and advisory systems
- Role of logistics service providers in customer integration
- Selection of standard configuration software for specific configuration tasks
- Short and long term economic impacts of product information systems

Authors are invited to submit original and unpublished research results/best practices for consideration in IMCM’06 and PETO’06. An abstract is due until December 10, 2005.

Conference Chairs: Thorsten Blecker, Hamburg University of Technology (TUHH); Gerhard Friedrich, University Klagenfurt; Kasper Edwards, Technical University of Denmark (DTU); Lars Hvam, Technical University of Denmark (DTU)

More information and full text of call for papers and list of topics: http://www.manufacturing.de/calls/imcm06+peto06

Re-Post: Recent research studies on mass customization (from the MC Newsletter 3/2004)

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. 3/2004.

Three recent research studies on mass customization:

(1) Customers are willing to pay more for customized products

Together with Nikolaus Franke, Professor of Entrepreneurship and Innovation Management, I conducted a study on the value of toolkits for co-design (configuration) from the consumers' perspective. In our study, we asked (1) if customers actually make use of the solution space offered by the mass customization variety, and (2) if they are willing to pay for this option. Results are very promising.

For our study, we used a relatively simple, design-focused toolkit from the watch industry for a set of four experiments with a total of 717 participants, 267 of whom actually created their own watches. The heterogeneity of the resulting design solutions was calculated using the entropy concept, and willingness to pay was measured by the contingent valuation method and Vickrey auctions. Entropy coefficients showed that self-designed watches vary quite widely. On the other hand, significant patterns are still visible despite this high level of entropy, meaning that customer preferences are highly heterogeneous and diverse in style but not completely random.

We also found that consumers are willing to pay a considerable price premium. Their willingness to pay (WTP) for a self-designed watch exceeds the WTP for standard watches by far, even for the best-selling standard watches of the same technical quality. On average, we found a 100% value increment for watches designed by users with the help of the toolkit.

Taken together, these findings suggest that the toolkit's ability to allow customers to customize products to suit their individual preferences creates value for them in a B2C setting even when only a simple toolkit is employed. Alternative explanations, implications and necessary future research are discussed.

The full research will be published in the November 2004 issue of the Journal of Product Innovation Management ("Value Creation by Toolkits for User Innovation and Design", by Nikolaus Franke and Frank Piller, Journal of Product Innovation Management, Vol. 21, Issue 6, pp. 401-415 [ http://www.blackwell-synergy.com/links/toc/jpim ].

(2) Striking the balance between utility and complexity when marketing mass customized products

In this study, professors Benedict G.C. Dellaert and Stefan Stremersch investigate consumers' evaluations of different mass customization configurations when asked to mass customize a product. For instance, mass customization configurations may differ in the number of modules that may be mass customized. The authors find - in the context of mass customization of personal computers - that mass customization configuration affects the product utility consumers can achieve in mass customization as well as their perception of mass customization complexity.

In turn, product utility and complexity affect the utility consumers derive from using a certain mass customization configuration. More specifically, product utility has a positive, and complexity has a negative effect on mass customization configuration utility. The effect of complexity is direct as well as indirect, because complexity also lowers product utility.

The authors also find that consumers with high product expertise find mass customization configurations less complex than consumers with low product expertise and that for more expert consumers complexity has a less negative impact on product utility. The study has important managerial implications for how companies can design their mass customization configuration to increase utility and decrease complexity.

The full paper is forthcoming in the Journal of Marketing Research in summer 2005.

(3) Does mass customization pay? An economic approach to evaluate customer integration

Another paper that was available as a working paper already since a longer period of time has now been finally published. Together with Kathrin Möslein from London Business School and Christoph Stotko from our Munich research group we present a conceptual model to structure the costs and benefits of mass customization.

The paper provides an integrated view of value creation in mass customization based production models. While flexible manufacturing technologies are often seen as the main enabler of mass customization, we argue that modern information technologies play a similar important role. Their significance is based on enabling a distinctive principle of mass customization efficiently: customer integration into the production processes. The customer is integrated into value creation during the course of configuration, product specification, and co-design.

Customer integration is often seen as a necessity and source of additional costs of customization. However, we argue in this paper that customer integration may also be an important asset to increase efficiency and could pave the way for a new set of cost saving potentials. We coin the term 'economies of integration' to sum up these saving potentials.

Economies of integration arise from three sources: (1) from postponing some activities until an order is placed, (2) from more precise information about market demands, and (3) from the ability to increase loyalty by directly interacting with each customer. By examining and structuring the economic principles of mass customization the paper will give insights into the benefits, but also the constraints of a mass customization strategy.

The full paper is published in the journal "Production Planning & Control", Vol. 15, No.4, June 2004, pp. 435-444. The whole issue of this journal, edited Prof. Ian McCarthy from Simon Fraser University in Canada, is very worth reading. It is a special issue on mass customization and provides a very good selection of recent mass customization papers. You find the issue easily on the publisher's web site: Taylor & Francis, http://www.tandf.co.uk/journals.

Re-Post: From Mass Customization to Open Innovation: From configuration by customers towards customer innovation (from MC News 2/2003)

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. 2/2003.

The ability to create new products is an important component of a firm's innovative capabilities. New products are crucial to diversify, adopt, and reinvent an organization in changing market and technical conditions. Yet despite the importance, firms find it difficult to create new products (and services). Often, innovations cause enormous investments, but flop and do not meet the desires of the target markets. Thus, management guru Peter Druckner demands: "Today no one needs to be convinced that innovation is important ... How to innovate is the key question."

One striking example of how to innovate and to develop new products in a new way provides the development of open source software. Products like Linux or the Apache server consist not only of pieces of innovative code being responsible for these software's success, but these products are also created in a highly creative way.

Open source software is developed within networks of developers. However, these developers are not persons being highly paid to do this task, but (sometimes thousands) of people contributing in their leisure time or during work. There is much fascinating research on the motives of these people. But most of this research is concentrated on software development. While there are some nice exceptions, in most cases open source is seen equal to software.

But I think (some of) the principles of OS software development can be a role model for many other product categories as well. I use the term "open innovation" to describe a concept of innovation following the principles of open source development to perform innovation innovatively in many product categories. The main idea is that customers and users, and communities of users, are actively integrated into the innovation processes by the means of dedicated tools and platforms.

By performing open innovation, the assumptions of the traditional, internally-focused innovation system of many firms shall be overcome. In a new book Harvard Professor Henry W. Chesbrough uses the term open innovation to address the demand to co-operate to innovate. Open innovation in his understanding draws on technologies from networks of universities, start-ups, suppliers, and even competitors. The automotive industry can be regarded as a good example. Automobile OEMs don't try to reinvent the wheel, they partner with suppliers and research organizations to stay on top of new technological developments.

However, open innovation in my understanding goes one important step further: In addition to networking with various sources of technology providers, open innovation should build, first of all, on networking with the customers and users of a product. Open innovation aims at transferring the ideas and approaches from open source software development to the domain of other product categories and services. The result shall be innovative products and services that better meet the requirements and needs of their users.

The idea is to build and operate platforms where (communities of) customers and users create, develop, and discuss new products and services with the objective to capture the joint creativity and knowledge of both the company and its customers. Analogous to the open source idea, users can build upon other user's contributions or collaborate with other users to develop a final product without the help of a manufacturer.

Open innovation builds on customers as the primary source of innovation to a large extent. One important enabler of open innovation is a toolkit, an interface between the firm and the customer to enable customers to become innovators. Like a mass customization configurator, innovation toolkits (configurators with a larger solution space) guide the users to express their creativity and desires into a concrete product.

Not really a new idea. MIT Professor Eric von Hippel does research on this topic since many years (see http://userinnovation.mit.edu). But also mass customization is not a new idea per se, it is just starting to happen now. The same is the case with customer / user innovation. Integrating users and customers into innovation processes to a greater extent than with the known market research instruments is demanded since decades. In niche markets like extreme sports it is also a common practice since these sports were invented. But in mass markets with millions of "normal" users, customer innovation is a new thing. Here, only the advent of recent internet technologies enable user innovation in a large scale.

Just check the homepages of BMW or Audi. On both sites you can access innovation platforms where average drivers are invited to create the next generation of cars -- or at least provide important input. These strategies would be impossible without the recent developments in internet innovation toolkits (check http://www.hyve.de for a company providing these toolkits). Also in the car industry, the OSCar Project aims at developing, prototyping, and, finally, constructing a commercial car within an open source a-like network. While the projects mentioned before can be performed almost exclusively in the digital domain, the OSCar project demands real-life work-shops to build prototypes. But it works (after various modifications of the original setting): The first real life prototype was just presented to the public.

From projects with several companies in the last year I learned that building an open innovation strategy based on an existing mass customization product line can be a very suitable strategy. Mass customization users are at least somehow used to working with a configurator. They also realized that interacting with a firm can provide now benefits (in terms of better fitting products), and, thus, is worth the effort. Mass customization customers are also often the most demanding leaders of a market segment. The same arguments are, of course, true also from the perspective of a firm offering mass customization.

So, connecting mass customization and open innovation makes a lot of sense. Both approaches build on the same principles of customer integration, use similar tools, and foster relationship stickyness and customer involvement. I see the connection of mass customization and open innovation as an important characteristic of third generation mass customization.