Mass Customization & Open Innovation News

Customized Girl's 101 Secrets of Online Customization

Customized Girl is one of the many sites that sell personalized t-shirts and other fashion items. What makes them special is their clever marketing strategy to have a blog with many "top xxx" lists that (i) many other blogs will pick up as blogs always top-xxx lists (see, it worked), (ii) and at the same time always have their site as an entry ( see #34 below!). Really clever and very well done!

Today, they published not a list on best ideas for a bachelor party or the worst dressed persons ever, but their 101 tips on mass customization. Well, after item 74 the editor probably got board and filled the list with some very general design stuff. But the list is a very good source of information in any case!

Here are some of the links that Customized Girl selected to show how mass customization and online customization is driving businesses today (I picked some not so obvious ones, and some oddities). You find this blog at #15, and some more in the full list.

1. BizReport : A 2008 article detailing how customized products are the “it” thing. Consumers, according to this study, are sick of “cookie cutter” solutions. Allowing your customers to customize the product you are selling to their interests could increase the value by 18 percent.

5. Failure of Customization : This 2002 article talks about why the online customization business will ultimately fail. While its hypothesis hasn’t been proven yet, it argues that customized products aren’t better than mass-produced products.

15. Mass Customization Blog: A super-handy and uber-detailed blog dedicated to the mass customization industry. Look for wordy entries and lots of links from this blogger.

22. Design Intelligence : What sort of effect will the mass customization boom have on purveyors and creators of high design? Find out by reading this great article by Design Intelligence.

23. ZD Net: A strong article which discusses the correlation between widgets and product customization. While this article refers mostly to online software customization, it would still be helpful to brick-and-mortar customization businesses looking to expand their presence on the web.

25. Your Brain on MC : This is a funny blog entry on Treehugger which shows what happens when a person, using a customization site, turns his brain scan into a lamp.

34. Customized Girl : This cute site lets you customize T-shirts and other clothing items for women, men and kids, though it has a specific focus on women’s clothes. The site has a wide variety of styles and trends one of the biggest on the web and has an easy-to-use site. You can even upload your own images to be printed on your merchandise. And expect nothing but the best-quality products this company sells garments from reputable manufacturers like American Apparel and Bella.

39. Coco Myles : Forget fashion school! Coco Myles has a way for all you budding Donna Karan’s to create the dress you’ve always dreamed of with its online design studio. Pick your fabric, select your cut and color, and even add different accents.

71. Stem Cell : Need some customized cells or plasma samples? Who doesnít, really? Well, look no further. Stem Cell is here to help you out with its host of customized genetic products.

Read the full posting here: http://www.customizedgirl.com/blog/?p=501

Threadless - the full story: Inc. Magazine Feature on Threadless

Max Chafkin, a staff writer the US Entrepreneurship journal Inc. Magazine, has written a great report on Threadless  for the June 2008 issue of the magazine. It is available in a free online pre-press version now.

Max tells the entire story of Threadless, starting with the episode of a meeting at MIT where the Threadless guys gave one of their first public presentations. I had the privilege to be part of this meeting, and it is fun to read about it in paper (especially as I am at MIT in the moment, writing these lines from the same building where we had the initial meeting with Threadless).

Max did a great job in documenting the history and genesis of Threadless, but also reflecting on its future. Here are some quotes of Max' analysis of the case, but head to the website to read the entire article:

On Threadless' Size and Development

This rapid engagement propelled the company through four years of phenomenal growth, beginning around 2004. The user base grew tenfold, from 70,000 members at the end of 2004 to more than 700,000 today. Sales in 2006 hit $18 million -- with profits of roughly $6 million. In 2007, growth continued at more than 200 percent, with similar margins. Though Nickell refuses to disclose the exact revenue number -- perhaps because he now counts Insight Venture Partners, a New York venture capital firm, as a minority shareholder -- it seems fair to assume that Threadless sold more than $30 million in T-shirts last year.

Ask Nickell what he makes of his company's whirlwind success, and he will respond rather sheepishly. "I think of it as common sense," he says. "Why wouldn't you want to make the products that people want you to make?" Indeed, the idea that the users of products are often best equipped to innovate is something many entrepreneurs know intuitively.

And it is supported by a growing body of research. A study published last year in the Strategic Entrepreneurship Journal suggested that the vast majority of companies are founded by "user-entrepreneurs" -- people who went into business to improve a product they used. Meanwhile, studies by von Hippel and others show that in industries as diverse as scientific instruments and snowboard equipment, more than half the innovations generally come from users, not from research labs.

On user innovation and the resistance of traditional companies to adopt it

Some companies actually punish these people by cracking down on unauthorized innovations. Apple has famously "bricked" -- that is, electronically disabled -- iPhones that have been enhanced by their owners. Other companies pay lip service to user innovation but have trouble following through on the concept. "Companies are very good at creating platforms for external input, but they're very bad at using this input," says Frank Piller …

Threadless is an exception to this. "You could say that what Threadless does is trivial, but it's not," says Harvard's Lakhani. In fact, the very triviality of Threadless's product -- something as low tech and as commoditized as a T-shirt -- proves that vibrant online communities can drive all sorts of nontechnical businesses. This should be encouraging news to entrepreneurs. Customer communities have become exceedingly inexpensive to build and manage; blogging software and social network platforms, for example, are now available for free from a handful of start-ups. "We thought that open source could only work in software, and now it's being successfully applied to a product as mundane as a T-shirt," Lakhani says.

On Threadless' Corporate Culture and Work Style

[Today], the company is suspiciously companylike. The go-carts generally stay parked, the buck stays mute, and the Ping-Pong table serves as a gathering place for impromptu meetings. "When I started, we spent half the day playing," says Lance Curran, a bearded 29-year-old wearing a beanie, jeans, and a flannel shirt. "That doesn't happen anymore." This is not to say Curran doesn't like his job. On the contrary, he nearly glows when he talks about his rise from a temporary warehouse worker in 2005 to the warehouse manager in charge of a staff of 18 today. ...

Like Curran, most of Threadless's employees come with no obvious qualifications for their jobs. The oldest staff member is 33, and many are under 25. The employees do, however, arrive with a deep and abiding love of Threadless, having joined the community long before they entered the work force.

Joe Van Wetering, a 21-year-old illustrator who works in the production department, was a frequent visitor to Threadless's offices as a teenager before taking a job in the warehouse in 2006. Ross Zietz had won seven competitions while studying art at Louisiana State University before he took a job as the company's janitor in 2004. He has since been promoted to art director, charged with helping the winning designers get their entries ready for printing. In fact, 75 percent of the company's 50 employees were community members before they were hired.

On other product categories Threadless is exploring

Now, Nickell is set to let his club loose on other businesses. In addition to expanding to children's clothing and retail, Threadless will begin selling prints and posters online. And later this year, the company will add a range of products, including handbags, wallets, and dinnerware, under the brand Naked & Angry. Each item will be adorned with patterns submitted by users, with a new product launched each month. "I think Naked & Angry, if handled properly, has the potential to be way bigger than Threadless, because we have the flexibility to do everything," says Kalmikoff, who envisions moving into high-end clothing as well as housewares. Jeff Lieberman, managing director of Insight Venture Partners and a board member, is even more bullish. "To say it's just a T-shirt company is absurd," he says. "I look at it as a community company that happens to use T-shirts as a canvas."

 
And Max' final evaluation of Threadless' Business Model: A fundamental economic shift

The way Eric von Hippel sees it, Threadless has tapped into a fundamental economic shift, a movement away from passive consumerism. One day in the not-too-distant future, he says, citizen inventors using computer design programs and three-dimensional printers will exchange physical prototypes in much the same way Nickell and cohorts played Photoshop tennis.

Eventually, Threadless-like communities could form around industries as diverse as semiconductors, auto parts, and toys. "Threadless is one of the first firms to systematically mine a community for designs, but everything is moving in this direction," says von Hippel. He foresees research labs and product-design divisions at manufacturing companies being outstripped by an "innovation commons" made up of tinkerers, hackers, and other devout customers freely sharing their ideas. The companies that win will be the ones that listen.

This may or may not come to pass, but the lesson of Threadless is more basic. Its success demonstrates what happens when you allow your company to become what your customers want it to be, when you make something as basic and quaint as "trust" a core competency. Threadless succeeds by asking more than any modern retail company has ever asked of its customers -- to design the products, to serve as the sales force, to become the employees. Nickell has pioneered a new kind of innovation. It doesn't require huge research budgets or creative brilliance -- just a willingness to keep looking outward.

Context:
- My earlier reports on Threadless are here and here.
- The full Inc. Magazin article

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

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

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

Trends mentioned in the map include:

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

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

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

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

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

Virtual Fashion Technology: New blog covers major pesonalization technology

Recently I learned about a great new blog published by Elaine Polvinen, a professor of Fashion Textile Technology at Buffalo State College in Buffalo, New York. Elanie writes about "Virtual Fashion Technologies", a main enabler of mass customization and personalization in the fashion industry.

She wants to document with her blog the transition and expansion from traditional 2D designs to 2D Digital to 3D virtual for apparel textile product design, development and retailing.

Here is a selection of her recent posts:

# Transformational Avatar Retailing: The Missing Link For Mass Customization?

# A Conversation with Louise Guay from My Virtual Model

# Avatars in Second Life for Retail Marketing? It’s Not Only Coming – it’s Here! - Part 1 - Part 2 - Part 3.

# Highlights of MCPC 2007 in Montréal, Canada: Part 1 - Part 2

And much more at http://fashiontech.wordpress.com

Top 10 Mass Customization Companies in 2007 -- Report in Best Practice Business Blog

Happy New Year!

Best Practice Business is a rather large German blog, and Burkhard Schneider, its main author, recently added more and more good reports on new mass customization companies. If you understand German, very worthwhile to read.

Yesterday, as part of the usual top 10 lists popping up at the end of the year, he also created a list of "top 10" mass customization companies in 2007. There are a number of great concepts, others I find less innovative, other are missing, but it is a great review of interesting concepts in the area. The blog, and the posting, are in German, but you easily will get the picture. Here is the top-10 list (go here for further descriptions and the links)

# Mymuesli: Mass Customized Müsli
# Blends For Friends: Mass Customized Teas
# Vuru – Custom nutrition
# My Twinn - custom dolls
# Miss-Information: Custom travel books
# flattenme: Personalized children books
# TasteBook: Mass Customized recepies
# Paragon Lake: mass customized jewelry
# Cosmocards - Personal Greeting Cards
# Zyrra – mass customized bras

Relaunch of Mass Customization Web Site - and further sources on the topic

Today I did a smaller but hopefully useful relaunch of my main mass customization website. While the website's design still is very 1990s, I hope that it is now a bit more useful and easy to find what is there. But all new content is posted to this blog anyway. The website serves as a repository to navigate through old postings and external materials. Have a look ...

And luckily, a number of other people are creating great mass customization sites as well, so there is much more to discover elsewhere. Here are a few fine examples (I am only listing new sites which have general information on the topic -- no single examples or vendors):

Le Blog de la Mass Customization: Great French Blog full of MC examples. I just understand basic French, but can see the pictures and examples.

The Wikipedia Article on Mass Customization still is rather bad, but at least the link list in the end is getting more balanced.

Mass Customization Resource Centre, Nottingham University, UK: Bart MacCarthy and his team did a great job in making this very helpful web site with plenty of literature, definitions, and articles

Customize-your-life: Large mystery for me. This is a nice directory of sites offering custom-made and mass customized products, but I have no idea who is creating it and why.

Configurator Database: As mentioned before, a great listing of many configuration toolkits on the web. Plus videos.

Made For One: One of my favorites. News about companies using mass customization and personalization. No posts, however, in the last months.

Mass Customization Posts in the Best Practice Business Blog: This is a large German blogs, and its authors recently added more and more good reports on new mass customization companies. If you understand German, very worthwhile to follow.

Video interview on mass customization and open innovation

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

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

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

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

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

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

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

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

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

- Process navigation

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

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

- Loading Time (under 15 Seconds)

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

- Delivery time

- Weaknesses of the site as seen by the evaluator.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

- Other reports on rapid manufacturing in this blog.

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

Report on State of Mass Customization Implementation and Cost Drivers

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

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

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

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

Customization rates will increase in the future

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

Some other key findings, as quoted from the report:

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

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

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

Automated Product Configuration

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

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

Barriers to Mass Customization

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

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

Context:
Download the report.

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

I am coming to your desktop: Webinar on Mass Customization Implementation, Trends, and Success Factors

Special discount code for blog readers and early registration price available

Please allow a little bit of self-advertising, but this may be an interesting offer for some of you: Together with Pure Insights, a London, UK, based company offering seminars and webinars on innovation and technology related topics, I am offering a live web-based seminar on mass customization and designing winning configuration systems. This may be a good offer for corporate readers that want to get a convenient introduction into mass customization thinking and product configuration strategies.

Mass Customization and Customer Driven Value Creation:
Implementation strategies for winning by product configuration

Date: 01 Aug 2007, 10:00-11:00am EST / 15:00-16:00 GMT [more time zones]
Location: Your Office

The cost to produce one-off custom products is high, and it affects both front- and back-end systems. But as Forrester Research reports in a recent study (“Why Custom Product Buyers Could Be Your Most Important Consumers“, June 2006), companies find this investment worth as 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.

Based on our own study of more than 250 mass customizers in consumer and industrial markets, the webinar outlines the building blocks of success full mass customization strategies and provides ideas how to avoid the pitfalls of implementing mass customization. The focus of this session will be on the design and development of product configuration systems or so called toolkits for customer co-design. Rather than commenting extensively on technical details, the session will provide hands-on recommendations on the strategic positioning and implementation of theses central tool of each mass customization strategy.

Session Outline

- What is mass customization and personalization – and what is it not?
- Which recent trends and development enhance these strategies and how is mass customization related to “The Long Tail” phenomena?
- What are the building blocks of a mass customization strategy and what does it demand from corporate functions like product development, manufacturing, and marketing?
- What are the elements of a successful product configuration system?
- What are the risks associated with mass customization? How do you manage these risks?
- Session wrap-up: Idea for further action

By attending you will learn how to:

- Champion and/or lead a mass customization initiative in your company
- Identify opportunities for mass customization and personalization in your industry
- Develop the fundamental competencies a company needs to build a sustainable MC business
- Prepare your company to benefit from mass customization and product configuration systems
- Discover the risks and threads of mass customization and develop successful counter strategies

To register, please go to http://www.pure-insight.com/webinars/mass-customization-customer-value-creation and use promotional code aix (case sensitive!) wenn registering for a 10% discount.

Note: You also can download the webinar after its initial live broadcast – but only when joining live, you can interact and ask direct questions.

All further information can be found here.

BMW’s Mini Brand Launches Custom Roof Designer Online

Evaluation of the new roof design toolkit and some ideas for improvements and additions

Driving a BMW-Mini often is seen as the ultimate expression of individualism. People paying the extra premium for a small, but fun car often select a Mini to express their individual lifestyle and to set themselves ahead from the crowd. For me, this always seemed to be a bit a contradiction, as I have seen very few really “cool” people driving a Mini, and at least in Germany, Mini drivers seem to follow a general pattern of belonging to a conservative upper middle-class medium aged segment living in larger cities. (I have, however, to admit that driving a Mini really is fun and a very nice experience).

Also, from a mass customization point of view, a Mini has rather limited customization offerings. While the configurator suggests plenty of choice options, they are rather limited, especially with regard to style customization like color combinations between body, roof, and interior. All choices seem to be perfectly balanced to deliver neatly tuned combinations fitting the Mini brand image as seen by its corporate parents.

But now, there is ultimate choice. Customers now can freely design the Mini’s roof with their very own design. The roof is one of the signature design features of the Mini. It is often selected in a different color than the body. And now you not only can select from 15 or so standard colors, but really design your own, as the German weekly Der Spiegel reports in its online edition.

Enter the Mini Roof Designer, a very well done playful online design toolkit that allows you to generate your own roof design. The configurator is full of nice gimmicks providing a great experience, but not really helping you to come up with a better design. As far as I could evaluate this configuration toolkit, this – in the moment – is a pure marketing gimmick. You can design your roof and save it, but that’s it.

According to the regularly well informed Der Spiegel, however, you also can order very soon your individual design in form a custom-made foil with your individual pattern that your Mini dealer will fix on your roof. (and in the Carscoop blog I read that the orders are available only in Italy for the time being, Germany will follow in June, Austria in the third quarter, with further countries being added later).

Given the high prices for extras for the Mini, 400 Euros for this service seem to be not too expensive. I bet there even will be fans ordering their custom roof stickers without even owning a Mini. And I am looking forward to see all the really custom designs printed on Mini cars and how they match the look of their owners. Have a look in the gallery of the Roof Configurator to see what I mean.

Nice idea. Some thoughts I had while playing around with the configurator how to improve this offering :

(1) It will be interesting to see if and how Mini approves all designs and whether there will be limits of what people can print. For the online gallery publicly showing your saved design, a manual approval process takes place. After I saved my Mini, the system told me that it will take ONE WEEK to approve my design before it is online. Hey, we are in an online, real-time, instant gratification world and the automotive industry is talking about the Three-Day-Car http://www.3daycar.com/!!

(2) It is rather difficult to come up with a nice design. The system offers many tools, but as an average user without design skills, it is difficult to come up with something creative. Easy-to-modify starting designs are missing. Also, I would have loved to get some more inspirations, perhaps by famous designers sharing their own Mini roof. And if I would be a professional designer, I would love to be able to upload a design made in Photoshop or any other professional design program using a template provided by BMW.

(3) The custom Mini roof sounds like a perfect idea for a new Threadless clone . Let the best in the world design roofs in form of an open (ongoing) competition, and let the community of Mini fans and owners evaluate the designs and vote on the winners. Then produce these designs in limited editions and sell them within days.

(4) Or a modification of the Spreadshirt idea: Let users design roofs, and sell their individual designs to others. Designs are then individually printed, and designers get a share of the proceeds. Perhaps this also is a great after-sales tuning idea. Think of transferring the BEMZ idea of tuning IKEA sofas onto Mini roofs: Create custom Mini roof covers and sell them independently for 200 Euros. Given that about 1 Mio. New Minis have been sold, this sounds like a nice market opportunity.

So many opportunities for mass customization in the automotive industry. Let’s see what is happening next.

Four New Mass Customization Start-Ups Presented by Business Week

In a recent article, Business Week presented a number of new start-ups selling custom products. The report by Eve Tahmincioglu provides some good insight into the costs and backgrounds behind opening a mass customization business. These are the customization businesses presented in the report:

CHIP-N-DOUGH is a local cookie company in Santa Ana, CA. It allows their customer to place corporate logos on the cookie tins. The response has been great: Last year, 30% of the company's $1 million in revenues came from the custom tins. Mrs. Snyder, the founder and owner, went through five programmers and $50,000 just to develop the software needed for customers to place online orders, and also designed the machine to print the custom tins by herself, including own chemicals and dyes which she customized to create proprietary colors. In total, she spent about $300,000 on the changes. Now customers can order between one and 1 million tins online. To date, the largest order has been for 15,000 tins—about 360,000 cookies. Customers can either upload images to the site and design the tins themselves or e-mail the images and leave the rest to Snyder's staff. Tins can be made in as little as one hour—less than the time it takes to whip up a batch of chocolate chip cookies.

ZYRRA was founded by Christi Andersen and Derek Ohly, in Cambridge, MA, to provide women with bras that really fit. The two business partners used $40,000 to modify off-the-shelf costume design software to create a large assortment of prototypes of different bras. On the sales side, Zyrra sells bras through home parties, in which one of the company's three salespeople takes 12 different measurements for each customer. Customers then choose colors and trim. Bras start at $70 and are manufactured in a local factory. The company’s web site is used for marketing and to ask potential customers for their ideas. Re-orders shall be possible online soon.

CHOICESHIRTS is one of the many businesses selling custom shirts. Founded by Matt Cohen in Pennsauken, NJ, it uses a fully automated process that keeps costs low and volume high. Cohen started his company with about $500,000 in personal savings in 2001. He sold stock designs at first, but quickly realized that offering custom designs could set him apart. Cohen upgraded the software on his Web site, working closely with an online development company in which he has an ownership stake. The process took about four months and cost several hundred thousand dollars, most of which went to developing interfaces that connect to back-end administrative and production systems. In 2002, he launched Mother's and Father's Day shirts that customers could personalize with their own or their parents' names.
Today, about 65% of ChoiceShirts' $3 million in revenues came from the custom shirts. And customers of personalized are coming back: About 20% to 30% of ChoiceShirts' business comes from repeat customers.

NAME MAKER is selling high-end gift wrap printed with custom slogans. When Cheryl Dorrell founded the company in 2004, she learned that the existing plotters could produce neither durable nor water-resistant prints. So she designed her own $250,000 machine. They now have five of the machines, and their workings are a closely held secret. Customers place their orders online, but the words are set by hand, part of a nine-step process that takes two weeks. Name Maker's made-to-order gift wrap runs from $24.95 to $32.95 a 12-foot roll. About 15% of Name Maker's $2 million in sales came from customized paper in 2005, and Dorrell expects the product to bring in as much as 65% of sales this year. Not bad for a new niche.

CNN on User Manufacturing and Fabbing Your Products at Home

Dean Irvine from CNN Online reports in a recent article on a new project, Fab@Home, that wants to provide a machine that can make anything, even itself -- and this in the comfort of your home. What sounds like the dream of a science fiction author is a device developed at Cornell University by Hod Lipson, Assistant Professor at Cornell's Computing and Information Science department, and Evan Malone, a PhD student.

Lipson and Malone's machine is different to conventional rapid manufacturing technologies in several reasons: First, it can use a number of materials, from plastics to metals with a low melting point. "This makes them useful for making parts or components, but not for making complete systems. We're aiming to make integrated systems, including circuitry and sensors," Lipson is quoted in the article.

Second, the machine is not a proprietary technology, but open source machinery.

DIY fabbers have been able to download plans on how to make their own Fab@Home devices from the web site and are able to build it using off-the-shelf components for around $2000, or buy a kit for $3,000. The machines can then be run from software on a desktop computer. Unsurprisingly the current model is more rudimentary than professional rapid prototyping machines.

Lipson: "Since the machine has been out there people have been experimenting with all sorts of materials including food. We've seen a lot of chocolate, cheese and peanut butter-based creations. This might not be the way the machine is used in the future, but it just goes to show how adaptable and open the creative impetus it is."

Lipson thinks that digital fabrication is currently in a similar situation to that of computers in the 1960s, but instead of kits in the hands of enthusiasts and boffins, the fabbing machines can be developed by creatives across the world thanks to the Internet, freeware and open source software.

"It's a project that will be perfected and improved thanks to the online community of designers and creatives. Getting it into the hands of the people is very important. All the software and components are open source so can be changed or modified according to what people want," he said.

While the machine still is in its early stages of development, the article comments on the potential impact of such a machine. This discussion fits into the vision of user manufacturing. In some quotes in the article, I am saying (please excuse this shameless act of self-promotion):

Piller: "It's hard to say if [Fab@home] will be in everyone's home in the next 20 years. It might follow the same trajectory as the laser printer. Who predicted that nearly every home would have one of them 20 years ago? What is certain is that in the long run it's sure to transform the manufacturing process, big companies won't have to focus so much on economies of scale. ... [For consumers], you won't have to wait for products. It will be similar to being your own publisher online, but with an enormous scope of what you can produce."

And how about replicating some Prada shoes or Aquascutum cuff links, Irvin asks in his article. Well, just look on Google Sketch-up and its repository of 3D designs. you will find an amazing number of reverse engineered IKEA furniture here.

"Already people are customizing designs of existing products, like Ikea furniture, using designs tools and these types of machines. It's small scale now, but if this becomes big, then Ikea are going to step in and say:'Hey, you can't customize our designs.' [But] if they're smart then they'll put these machines in their stores," said Piller.

And the basic idea of the IKEA business model of self assembly would become one of self-design (modification) and self production.

Read the full article here: http://edition.cnn.com/2007/TECH/science/04/26/fs.fabmachine/

Context: - The CNN article refers to a fabbed ladies shoe that is wrongly credited to my group. I wrote about the first laser sintered shoe in this blog, but its inventors and designers are Marc van der Zande from TNO Science and Industry and Sjors Bergmans from Concept Design who developed the shoe in a joint EU-funded project called CEC-made shoes.
- Another nice article about the project.

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

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

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

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

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

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

So use these capabilities to create your custom world.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Finally TIME got it: YOU are the person of the year -- and why Chrysler did not get it

Time Magazine annually claims a "person of the year", and this year it is not Bill Gates or Stalin, but YOU – the creative consumer. While the statement of this claim is more than true and indeed one of the main trends in 2006 (and the topic of this blog and newsletter since 1997), it is not too original.

Business 2.0 run a very similar cover story half a year ago, and before, the Economist and Business Week had similar covers stories in 2005. The article in Time about the story has nothing new, so no further quotes required (even if it really generated a lot of excitement in the blog world, and also many other papers reported about it, like this report in the Spiegel).

But what is much more interesting is this side story. If you want to read the Time article online, you can do so for free, but there in an advertising page first. It features a spot by Chrysler that is supposed to be humorous. It's tag line is "You might be not the person of the year, but you still can drive like one with the Chrysler XYZ". So much about fast response and the need for a new kind of advertising ... Very 1990s.

Context:

Exciting Commerce Blog says User Manufacturing is one of the top topics for 2007

Communities Dominate Brand Blog report about the Time story

And this is a great TIME cover creator – show it your grand ma, she will be impressed!

Donal Reddington on Customerism: Great Analysis of Recent Developments Along the Active Customer

Many of you will know the great blog of Donal Reddington, who regularly reports about developments, company announcements, and new technologies in the mass customization and personalization domain.

Recently, he posted a great feature on "Customerism", explaining different recent trends in business and technology seem to be converging into a new business model, that includes mass customization but also user innovation, crowdsourcing, and other developments.

His main arguments in brief (but read the entire post – there is also a great picture summarizing his thoughts):

Customer Empowerment: "The idea of empowering customers with a higher degree of control over their relationship with business has gained widespread acceptance. Various terms have been devised to describe different approaches or strategies that empower the customer."

The Rise of Mass Customization & History of Product Configuration: "The major impediment to wide adoption of mass customization in the early 1990's was the absence of an efficient communication channel for customers to describe their requirements. But than, the right tools cane up: The Product Configurator. My research suggests that the earliest work on what would be considered a product configurator was carried out by Ron Brachman at Harvard University in 1977. ... In the mid-1980's, Brachman worked at the Artificial Intelligence Principles Research Department at American Telephone and Telegraph (ATT) which developed the PROSE product configuration system for use in the telecoms industry. A few years later, unrelated research by Tim Berners-Lee would produce the first web-browser. By 1996, Dell had combined these two technological innovations into the first web-based product configuration system, that would allow anyone to specify their requirements when purchasing a computer."

Micro-Manufacturing: "The first examples of how mass customization could be the catalyst for new business models came about at the turn of the Century, with the launch of two companies: Zazzle and CafePress. Both of these companies offered conventional personalization of everyday products ... However, the most important aspect of their business was that they were also 'micro-manufacturers'" – allowing creative users to sell their creations to others.

User Innovation: "Ideas about involving the customer in the innovation process had been around since the late 1980's, … devised by Eric Von Hippel at the MIT. Von Hippel discovered that most products and services are actually developed by users, who then give ideas to manufacturers. This is because products are developed to meet the widest possible need; when individual users face problems that the majority of consumers do not, they have no choice but to develop their own modifications to existing products, or entirely new products, to solve their issues."

Crowdsouring as an alternative model of MC: After discussing Threadless etc., Donal concludes: "While to date crowdsourcing has been used mostly in the area of visual design, it could easily be adapted to issues of technical design also. Who is to say that an electronic equipment company could not use crowdsourcing to develop new products? There could be thousands of engineers itching to submit designs for new devices or contribute to the design of a new product. ...

Customerism: This is where we are now then: "A collection of separate business concepts and enabling technologies, that encourage user/customer participation, whose attributes overlap with one another to a significant extent. ... While there is no single word that can take in all of them ('masspeercustomizationcommonsmarketplace' doesn't roll off the tongue!), my personal opinion is that the term 'Customerism' is probably the most suitable word to describe a series of ideas that empower the customer ... "

Great observations and conclusions, again: read his entire post! I asked Donal what motivates him to spend so much time and effort to documenting mass customization and Customerism with this dedication. And his answer was a typical example for the motivation of empowered users in the new market space:

"As regards motivation, I guess you could say it is mainly interest in the topic. I researched MC as part of a master's degree a few years ago. I couldn't use my MC knowledge in my 'day job' (working for the Irish Government), so I set up the website as an outlet to pursue these ideas further. My view at the time was that if I did nothing, my work on the topic would 'go to waste'."

It is only through the great contributions of people like Donal that mass customization is really catching up. There are very few consultants or people who do mass customization professionally that have contributed so much back to the community – and doing this with so much modesty and intellectual generosity. Thank you, Donal!

Today Is MC Day in the Blog Sphere: History, Future, and a Missed Trend

Today was mass customization day in the blog sphere: Two great and one interesting post on mass customization and creative customers stroke out the mass of general postings just mentioning the term. And an update on Zafu in the NYT.

Tim O'Reilly on Threadless and custom fabrication. Tim O'Reilly, master guru of Web 2.0, today posted about Threadless and why he loves this business model. Why I do not share his evaluation that Threadless is a perfect example of the Long Tail (see my comment on his post), Tim makes a good observation where this will lead us in the future:

Right now, Threadless is just making t-shirts. But custom fabrication devices like laser-cutters, water-jets, and 3D printers are currently at about the price points of typesetting machines back when desktop publishing took off in the early 80's. Even traditional manufacturing techniques can now be harnessed by small companies and individuals, who can hire overseas factories to make short runs of custom designs. How far off is a future in which the creative economy overflows the thin boundary that separates "information" from "stuff"?

We've been fascinated with this idea since Marshall Burns and James Howison gave a talk entitled Napster Fabbing at our first P2P Conference in 2001. They pointed out, quite rightly, that in a world of personal fabrication machines, stuff could be shared as easily as music is shared today.

But what would the mechanisms be by which new designs first come into play? Will they merely be copied from traditional manufacturing and brands, or will there be a new economy in which users compete in creative abandon?

I am preparing a longer review posting on user manufacturing and the new infrastructure that is just coming up to help consumers to turn their creative ideas into physical outputs (and sell those to others) – an alternative model to the today dominating mass customization model. Stay tuned for this next week or so.

But Tim's post is a summary of the idea and what will come up. Or, as he says with William Gibson's words at the beginning of his post, "The future is here. It's just not evenly distributed yet."

Tom Evslin on the history of mass customization. Tom Evslin, a technology veteran and pioneer of many core technologies of the information age, posted in his blog today – in a comment of Tim's post – a great story on the history of mass customization.

Until today, I always paid tribute to Alvin Toffler for mentioning the concept first, who quoted (in 1970) Robert H. Anderson, at this time Head Information Systems, RAND Corporation, that "The most creative thing a person will do 20 years from now is to be a very creative consumer… Namely, you’ll be sitting there doing things like designing a suit of clothes for yourself or making modifications to a standard design, so the computers can cut one for you by laser and sew it together for you by NC machine ..."

But Tom has the following story to share:

In 1963, IBM paid me overtime for attending courses and lectures at its System Research Institute subsidiary – plus an all-expenses-paid drive into NYC. One Tuesday night the lecture was on the kind of future that computers would make possible. Those who thought about that at all thought of a Big Brother sort of world and enforced uniformity since computers liked dealing with millions of items which were all formatted just the same.

But the speaker at SRI said that computers would make mass customization possible.

“Imagine,” he said, “going to a store and seeing a dress you like (nb. no online shopping in the dark ages). The clerk takes your exact measurements but then asks if you would like any changes to the design. You say ‘I’d like the fleur de lis a little smaller, the straps a little wider, and the hem an inch higher.’ After just a short wait a machine disgorges just what you want. Computers will make it possible to undo the uniformity and conformity that began with the industrial revolution and mass production.”

Wow! Not that I bought any dresses with or without fleur de lis in those days but I was really turned on by this. Didn’t really have anyone to discuss it with because my co-workers at IBM were much older than me and not as given to bursts of enthusiasm and no one else knew what a computer was.

So why are we not all customize our dresses (or dress shirts) today? Here the third provides an answer.

Robyn Waters on Mass Customization. Business Week today posted an interview with Robyn Waters, a "Trend guru" on "spotting what is next" and former vice-president of Trend, Design, and Product Development at Target.

While I really love her work for Target and how she turned this company in place for great shopping experience and discoveries (Target's high-profile, high-revenue "design-for-all" marketing strategy, developed by Waters, is a industry benchmark), she really missed the point when asked about the which companies she recommends watching that are great in mass customization? Her answer:

"Mass customization refers to products for a mass market that are designed so customers can personalize them to their exact needs or desires.

Companies doing a wonderful job of mass customization are: The U.S. Postal Service and the www.mystamps.com site. You can design your own postage stamps...upload a photo, chose a color, a border, a denomination, pay by credit card. Jones Soda uses digital technology to customize labels. The customer uploads a photo, writes a label, selects the flavor of soda, and a case of custom-labeled soda is shipped to their door. Starbucks allows you to customize your cup. There are purported to be over 19,000 ways to order your coffee drink at Starbucks.

M&Ms allows you to select special fashion colors, and 95% of Mini Coopers are customized. Cold Stone Creamery customizes your cone with mix-ins. My Twinn is a doll that is customized to look exactly like your child. TiVo turns you into your own TV programmer. iPod gives you all the controls for your music when you want it.

I prefer the term "customer-made" to "custom-made." These examples turn a customer into a designer."

I totally share her last comment. But are the companies she quotes really good examples for mass customization worthwhile watching. I doubt this. Most of them are examples of online mass customization of the first generation. Are you really a designer of you order a latte with skimmed milk and extra cinnamon at Starbucks? Are you a designer if someone create a doll that looks exactly like you? Is a custom soda label the future of customization? Well, then I should stop writing this blog.

Tom's 1963 quote of mass customization of much more insightful and futuristic -- almost 45 years ago! I just mention this as it are exactly this kind of examples that make it difficult to bring mass customization forward and shift it out of the niche of custom embroidery etc. If forward looking thinkers like Robyn Waters use these kind of old examples and narrow ideas, then it will be difficult to motivate other managers to really see a sustainable business model behind the concept.

Update: One post that I just found today: The New York Times has a good review of Zafu.com, the mass customization alternative I wrote about some while ago. While the article in general praises the Zafu service, it remarks that it does not weigh heavily enough a user’s brand preference. But the label of a jeans is a as a big factor as the fit. The article also comments on the increasing use of other personalization services, like gift-finders or recommendation engines. Nothing new, but finally getting implemented.

SAP Info on Open Innovation & Innocentive

While this is an audacious act of self promotion, I still want to guide you to a nice interview I did with SAP Info, the global customer magazine of Software Company SAP. The topic was the U.S. company Innocentive that specializes in Open Innovation. Karim Lakhani, who worked as a Ph.D. researcher in the same group at MIT that I am visiting, got some fascinating performance data on Innocentive, on which I comment in this interview.

The interview answers questions like:

From Open Innovation, it is only a small step to companies developing products with the help of their own customers. Does this mean that manufacturers and customers are once again communicating directly with each other about the products, like in the good old days of the corner shop? Is it possible to prevent submitted entries, even those that haven't won, from being used commercially, patented as someone's own idea or sold on?

Isn't it still more lucrative for someone with good ideas to secure themselves a patent rather than accepting a comparatively small amount of money anonymously from Innocentive?

Does Innocentive have a monopoly at the moment or are other companies already copying its business idea?

How could external and internal innovation specialists usefully share out the work in future?

Open Innovation has been called the "Ebay of ideas". Do you see a danger of people's gift for invention being sold off cheap?

Read the answers and the full interview in English here (the translation from German is not always very good). There is also a version in German language.

Business 2.0 on The 50 People who Matter Most -- On Rank 1: YOU

US magazine Business 2.0 has in its new edition a cover story on the 50 people who matter now (thanks to John Winsor for the link).

Their list strives to identify people whose ideas, products, and business insights are changing the world we live in today - those who are reshaping the future by inventing important new technologies, exploiting emerging opportunities, or throwing their weight around in ways that are sure to make everyone else take notice.

On the list are regulars like Sergey Brin and Larry Page, Google Co-founders, Qualcomm CEO Paul Jacobs, Rupert Murdoch, Steve Jobs, Genentech's Susan Desmond-Hellmann or Fujio Cho, Chairman of Toyota. But I am very pleased to read that the Number 1 position of this list is: YOU -- today's customer and consumer, user and inventor, co-creator and co-marketer .

Business 2.0 has written a great ode on the modern consumer and why we are really living in the age of co-creation (the theme of my blog and the underlying assumption of mass customization and open innovation):

"Why You Matter: They've long said the customer is always right. But they never really meant it. Now they have no choice. You -- or rather, the collaborative intelligence of tens of millions of people, the networked you -- continually create and filter new forms of content, anointing the useful, the relevant, and the amusing and rejecting the rest. You do it on websites like Amazon, Flickr, and YouTube, via podcasts and SMS polling, and on millions of self-published blogs.

In every case, you've become an integral part of the action as a member of the aggregated, interactive, self-organizing, auto-entertaining audience. But the You Revolution goes well beyond user-generated content. Companies as diverse as Delta Air Lines and T-Mobile are turning to you to create their ad slogans. Procter & Gamble and Lego are incorporating your ideas into new products. You constructed open-source and are its customer and its caretaker. None of this should be a surprise, since it was you -- your crazy passions and hobbies and obsessions -- that built out the Web in the first place. And somewhere out there, you're building Web 3.0. We don't yet know what that is, but one thing's for sure: It will matter."

And Wired's Chris Anderson has reported in his blog about a GREAT video illustrating this nomination. Made by Peter Hirshberg of Technorati, and Michel Markman, this video gives you all the ideas what you have to know about co-creating customers and "The Long Tail": See the Video here on Youtube! See it!

Crowdsourcing is the new outsourcing: WIRED on value co-creation

Wired has run a number of nice feature articles on co-creation of value between companies and their customers in the past issues, but now they also coined a new, cool and really appropriate term for this trend: Crowdsourcing.

Jeff Howe's great article "The Rise of Crowdsourcing" in the new Wired Magazine (June 2006) provides a nice summary and many examples of firms who explicitly build strategies to co-create with their users and customers. In our new (German) book, we called this "interactive value creation", building on -- but not equal to -- Benkler's idea of "commons-based peer-production". Earlier notions of active customers focused on customers working autonomously, i.e. innovating, hacking, modifying, servicing, or selling a company's goods without any formal relationship or, in most case, the company's notion.

[Update: See here for a debate why Crowdsourcing is different to commons-based peer-production, and I agree to this argument. In this posting, Jeff Howe also provides a more formal definition of the term crowdsourcing:

"Crowdsourcing represents the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call. This can take the form of peer-production (when the job is performed collaboratively), but is also often undertaken by sole individuals. The crucial prerequisite is the use of the open call format and the large network of potential laborers."

End of Update.]

Croudsourcing or interactive value creation, however, builds on the notion that clever firms are setting up platforms for users to co-create with them. They initiate, manage, and provide incentives for peer-production among users and customers. Or as Jeff Howe puts it:

"Remember outsourcing? Sending jobs to India and China is so 2003. The new pool of cheap labor: everyday people using their spare cycles to create content, solve problems, even do corporate R & D. …

Many companies growing up in the internet age were designed to take advantage of the networked world. But now the productive potential of millions of plugged-in enthusiasts is attracting the attention of old-line businesses, too. … Technological advances in everything from product design software to digital video cameras are breaking down the cost barriers that once separated amateurs from professionals. Hobbyists, part-timers, and dabblers suddenly have a market for their efforts, as smart companies in industries as disparate as pharmaceuticals and television discover ways to tap the latent talent of the crowd. The labor isn’t always free, but it costs a lot less than paying traditional employees. It’s not outsourcing; it’s crowdsourcing."

The articles describes four kinds of crowdsourcers: Professional freelancers and hobbyists, who now very easily can contribute their talents (like photo enthusiasts competing again professional stock photographers); Packagers, who create new material by mixing own and re-used existing content and package it for a specific (niche) audience (like amateur videographers); Tinkerers, who get involved in a company's R&D process (open innovation as in the case of Innocentive); and finally the Masses, micro-freelancers who just participate a tiny bit of work to create something big with thousands of collaborators (like contributors to Amazon's Mechanical Trunk).

Amazon's Mechanical Turk is a web-based marketplace that helps companies find people to perform tasks which are difficult to automate, like identifying items in a photograph, skimming real estate documents to find identifying information, writing short product descriptions. Amazon calls these tasks Human Intelligence Tasks (HIT); they’re designed to require very little time, and consequently they offer very little compensation – most from a few cents to a few dollars. The article provides some nice insight into this Amazon service, which got a lot of hype when it was launched, but was not mentioned much in the last months:

"Just about anyone possessing basic literacy can find something to do on Mechanical Turk. It’s crowdsourcing for the masses. So far, the program has a mixed track record: After an initial burst of activity, the amount of work available from requesters – companies offering work on the site – has dropped significantly. … A few companies, however, are already taking full advantage of the Turkers.

Sunny Gupta runs a software company called iConclude just outside Seattle. The firm creates programs that streamline tech support tasks for large companies … Most problems that iConclude’s software addresses aren’t complicated or time-consuming, Gupta explains. But only people with experience in Java and Microsoft systems have the knowledge required to write these repair flows. Finding and hiring them is a big and expensive challenge. “We had been outsourcing the writing of our repair flows to a firm in Boise, Idaho … We were paying $2,000 for each one.”

As soon as Gupta heard about Mechanical Turk, he suspected he could use it to find people with the sort of tech support background he needed. … iConclude was able to identify about 80 qualified Turkers, all of whom were eager to work on iConclude’s HITs. “Two of them had quit their jobs to raise their kids,” Gupta says. “They might have been making six figures in their previous lives, but now they were happy just to put their skills to some use.” … Gupta turns his laptop around to show me a flowchart on his screen. “This is what we were paying $2,000 for. But this one,” he says, “was authored by one of our Turkers.” I ask how much he paid. His answer: “Five dollars.”

The articles summarizes its findings in five rules of the new labor pool:

1. The crowd is dispersed: People spread around the world can perform a range of tasks – from the most rote to the highly specialized – but this would-be workforce needs to be able to complete the job remotely.

2. The crowd has a short attention span: These new workers find time after dinner and on weekends. So jobs need to be broken into “micro-chunks.” Most tasks on Amazon Mechanical Turk, for example, take less than 30 minutes to complete.

3. The crowd is full of specialists: For Procter & Gamble, the crowd is the world’s scientific community; for VH1 it’s any ham with a camcorder; for iConclude it’s the handful of professionals with experience troubleshooting Microsoft’s server software.

4. The crowd produces mostly crap: Networks like InnoCentive, Mechanical Turk, and iStockphoto don’t increase the amount of talent – they make it possible to find and leverage that talent. Any open call for submissions will elicit mostly junk. Smart companies install cheap, effective filters to separate the wheat from the chaff.

5. The crowd finds the best stuff: Even as a networked community produces tons of crap, it ferrets out the best material and corrects errors. Wikipedia enthusiasts quickly fix inaccuracies in the online encyclopedia.

Read the full article here: http://www.wired.com/wired/archive/14.06/crowds.html
Many of the examples named in the article have been described in my Blog before, see here for a list.

And Jeff Howe also has a new blog on Crowdsourcing with updated information and all links of the original article.

New Factory121 Watch Co-Design Toolkit Launched – Best-Of-Class Example For Online Configuration

After months of development and testing, the new configuration toolkit of Factory121, the Swiss custom watch manufacturer, has been launched. Already the earlier version of this toolkit has been a great example which I have used often as an illustration of a "perfect" online configurator for BtoC in my lectures and keynotes. The new version brought the tool on a new level, and is a model of what a good online configurator should be able to do.

It is a great example what is possible if a configuration tool is developed and implemented purposeful and with understanding of the specific demands of mass customization. The new version, launched in April 2006, has reinforced this evaluation and has set a new industry standard. There are still some minor bugs to be worked out and some possibilities for improvement remain (and co-founder Daniel Morf has told me that they are working on fixing these errors), but already at this stage the configurator is leading edge.

The main elements which I consider as best practice of the new 121TIME toolkits include:

- Different entry points into the configurator (direct, from the catalog, from an mailing, etc.)

- Strong and thoughtful pre-configuration (very important point to reduce complexity from the customers' perspective)

- Good structure of the different co-design levels (while rather complex and pretty filled, the screen nevertheless allows for a easy navigation between the different design options)

- High usability and representation of rather complex design opportunities, creating a flow experience of the user

- Strong rule set preventing "bad" designs (try to design an ugly watch, this is really difficult)

- Several options to safe, compare and share designs

- Very good "consultancy" and help functionality (plenty of fields explaining you all options)

- Strong and fast visualization (try the zoom function)

- Modular pricing system allowing each customer to purchase a watch according to her own willingness-to-pay (Factory121 is one of the very few companies in the customization BtoC market utilizing this opportunity)

- Possibility to use place the toolkit in a customized way in affiliate web sites.

While single aspects of this configurator may be matched by other online configurators, it is the combination of all of its features that makes the 121TIME toolkit superior to other. Try the tool here (as with many new internet tools, you need broadband for a good experience; but still sometimes the company's server performance seems to be slow): http://www.121time.com

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, [email protected]).

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.

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.

Outside inspiration on mass customization and open innovation

I was rather lazy (or too busy) in the last weeks to frequently post into this blog. But there are various other very good blogs which deal with similar subjects. So as a backup, here my own reading list (comments and suggestions for further listings welcomed!):

MadeForOne.com is a web site by Ireland based Donal Reddington, reporting since two years frequently and really in depth about interesting trends in mass customization business and technology. Donal has a journalistic approach to mass customization, and has compiled over the years a really interesting collection of articles, cases, and analysis. A recent interesting contribution is his 2005-2006 "List of the Most Important People in Mass Customization". While a number of people very well deserving to be on this list are missing, it is a great starting point for further exploration.

B2Day on Culture of Participation: Business 2.0 is a great US business journal, which also publishes a great web blog. And on this web blog,, editor Erick Schonfeld has a great series of articles on the "Culture of Participation" – his term for User Innovation, Web 2.0, Open Innovation and Value Co-Creation. He provides a really insightful and in-depth analysis of this topic. Some of the old links in the blog are broken, but in general this site is a very good reference and source for new ideas on open innovation.

Outside Innovation: Patricia Seybold is one of the best known writers (next to her day job as a consultant) on the customer revolution and the new role of customers in a connected world. While her earlier books focused on how firms can improve the customer experience, her new book "Outside Innovation", due in Oct. 2006, will focus on the role of customers in innovation. In her blog with the same name, she is co-creating this book already now with her potential readers. She asks for examples and feedback, but provides also in-depth analysis on the topic.

Consumer Empowerment: Paul Marsden, a researcher at the London School of Economics, and Martin Oetting, a researcher at ESCP-EAP European School of Management in Berlin write a blog on customer empowerment and how firms can use empowered customers as a business strategy, or, as the blog's authors call it, "letting target buyers call the shots on your marketing and innovation." Great collection of case studies on open innovation and customer co-creation.

Exciting Ecommerce: And finally a blog in GERMAN language, but worthwhile also for English speaking readers to auto-translate with Google Bablefish. In this Blog, Jochen Krisch, a Munich based consultant, reports very frequently on new e-commerce trends and news. And one of his favorite topics is mass customization and configuration. Especially everyone interested in Spreadshirt.com, the leading mass customizer in the world in the t-shirt market, should read this blog: You will get a full analysis of Spreadshirt's business strategy and developments.

More interesting blogs or feeds:

http://ullamaaria.typepad.com/hobbyprincess/
http://franklampen.typepad.com/
http://www.customize-your-life.com/
http://www.coolhunting.com/
http://del.icio.us/tag/mass_customization

Re-Post: Customize your time: Mass Customization in the watch industry - Microsoft's SPOT watches, Swatch Via d. Spiga, and Factory 1to1 (from the MC Newsletter 1/2003)

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. 1/2003.

In the age of the cell phone, who needs still a watch? All of us - but more and more not to get the time but to express our personality. Watches are one of the most prominent fashion items and a dominant matter of self expression. Thus, customization of watches is a very interesting field to study. While different companies started several attempts to offer customized watches within the last decade, I would consider few of the existing offers as a serious and professional move towards mass customization. Many companies are either small start up operations with limited scope or professional management of the customization processes, or they do not offer real customization but only small series (e.g., logo watches for promotion activities). But recently, there is a change, and more serious initiatives to customize watches on a real one to one base are approaching.

Microsoft SPOT watches

Bill Gates of Microsoft recently announced plans to use watches as a transponder for customized services. Teaming up with Fossil Inc., Suunto and Citizen Watch Co. Ltd., Gates presented in January 2003 a concept wristwatch based on Microsoft's Smart Personal Objects Technology (SPOT). With compelling features such as customizable watch faces, access to personal messages and appointments, and the ability to receive up-to-date news, traffic, weather and sports information, the watches are the first wave of smart objects that shall extend Microsoft's reach from personal computing to everyday objects. However, first models are expected to be available not before fall 2003. But it will be very interesting to see how these companies bundle hard and soft customization around the physical product and accompanying services.

Two other great examples of mass customization of watches are already available, both focusing on the (aesthetic) design level of customization:

Swiss based watch customizer Factory121 opened its Internet store some months before, and launched officially in April 2003. This is not only the best customization site in the watch industry, but also one of the best configuration systems in all categories. Why? See below.

But let's first have a look on the customization initiative of a big and established player in the industry: Swatch. This brand is sometimes quoted as an example of mass customization - but it is not. Swatch is a typical example of a variant manufacturer that has the capabilities to bring out a huge quantity of variants and collections in a short time. However, customers can only select between made-to-stock products out of a huge variety.

Swatch Via della Spiga

After two very successful decades, the brand lost some of its original power in the last couple of years. While in former times Swatch could handle forecasting and product planning pretty easily as demand was so strong that even not so popular models could be sold without problems, new competition (trends) and an too established brand name force the company to go new ways. One approach to redefine the brand is the introduction of new (standard) models breaking with the traditional product platforms. Another tactic is customization which was recently introduced quietly in one concept store and is now in a pilot phase.

"Experience the language of fashion - you become the artist and accessorize your own Swatch." This is the advertising claim of Swatch's Via della Spiga concept store in Milan, Europe's fashion and style metropolis #1. Placed in the trend setting arena of the city where all big international designers have their stores, Swatch tries to update its image by using the latest fashion details of the surrounding designers for a very special collection of watches. "Catwalk details, chic styling, fabric trimming, edgy appliqués, unexpected coupling of materials, textile variants, enhancers such as crystals, feathers, fun fur, chandelier strands, studs, stones, ribbons, snaps, buckles, and beads await you. It's a chance to indulge your personality. Define your fashion silhouette," says the catalogue.

I visited the store three weeks ago. It looks much more boutique than the standard swatch store, more like a fashionable jewelry store. First of all you recognize a really beautiful collection of ready-made watches which are only available in this store, however, pre-configured. In a second room, a workshops appears. Here, as demonstrated in a video, customers can design their own (women's) watches. Breaking with the traditional concept, clients choose from pre-assembled watch bodies and combine them with a made-to-measure jelly ribbon plastic band that is supposed to be turned around one's wrist, ankle, neck or waist several times. The band can be decorated with heart, flower and star crystal appliqués, and even filled with different objects like small pearls or stars. The results is a very special look (you can get an idea on http://www.swatch.com, go to the "Via della Spiga" section). All custom assembling is done by the client with the help of a sales clerk on the spot. Watches are priced between 37 and 100 Euro.

While the extent of customization is not going very far, and the total approach is rather simple, this is one of the most striking examples of a new customization trend that goes beyond the traditional differentiation advantages of mass customization:

* Swatch uses customization in this store as an expression of self, as a concept to redefine its brand. While in former times a single, often famous professional designer was featured creating a special watch, in this concept the individual customer and its creativity and personal style is in the center of the product design. This is a total change of thinking.

* However, the product family design and constraints of the product system stop "bad design". Even if users have plenty of choices, restrictions prevent that the Swatch brand image is spoiled by bad consumer co-design.

* The open store atmosphere and the public workshop invite a community driven co-design. While in most mass customization applications individuality means also a one-to-one configuration process, the Swatch store provides the platform for a community of users to create an individual piece jointly. Using virtual and real-life communities to support mass customization is a concept that got just recently growing attention.

I am curious to see how this system develops: is it only a short pilot or the starting point of a larger movement? I will keep you posted.

Factory 121

In the watch-making industry, high quality "Swiss made" brands have been out of the reach of the majority of watch buyers - if they didn't want to get a Swatch. The intention of mass customization pioneer Factory121 is to close this gap. Frédéric Polli, one of its founders states it very clearly: "Margins and cost structures in the classic watch distribution channels are a major obstacle to the positioning of 'Swiss made' watches for the majority of watch buyers. New information technologies, like the internet, give us the ability to offer the excellent quality of Swiss watches to ordinary buyers under different conditions."

But the firm does much more than just bypassing the traditional sales channel. On Factory121's Internet site, users can co-design their very own wristwatch. After several years of planning, product development, marketing tests, and technology development Factory121 opened its (virtual) doors at the beginning of this year. The visible center of Factory121 is its web site, developed over a two-year period under the lead of Pete Beck, CEO of Brighton based Electrostrata LTD (http://www. electrostrata.com).

I had the opportunity to follow the development of this company since a longer period of time, and even if I had an idea of what would come up, I was really expressed when the official site launched. What makes this mass customization site an foremost exemplar for its industry (and mass customization in general, make sure that you interact with the site at http://www.factory121.com):

* The customer co-design process begins with a watch model that is already partially assembled. By presenting this pre-configuration, complexity is reduced. However, the combinations offered are almost infinite.

* As in the case of Swatch, the product family design prevents "bad design". Restrictions of choice prevent that a specific style is spoiled by "bad" consumer co-design.

* The 3-D quality of the design tools delivers a great user experience. Speed and feedback of the site are excellent. Virtual images are created in real-time depending upon the uses' choices. The interaction and animation elements of the Internet site are based on Java, a mature, reliable and popular technology that does not demand any plug-in.

* Users get a game-like interactive experience in which they perceive themselves living a unique and fun buying process ("flow experience"). When designing and purchasing a watch from Factory121 the buying process becomes an important part of the product - and, thus, an important driver of customer satisfaction.

* Despite the nice design and experience, the site offers also plenty of explanations and product information. Just have a look at the customized product description once you finished the customization process.

* The site supports price customization. It enables customers to design a watch within the constraints of their personal budget. Therefore, just by choosing, e.g., a leather strap over a stainless steal one, clients can choose an option suiting their budget. As customers work through each category of components, colors and selections, they are always aware of how their design choices are impacting the watch's final price. Doing so, Factory121 is one of the few examples using modular pricing.

The site is supplemented by high customer service. The firm operates own repair centers in its most important international markets, free shipping, and a strong quality guaranty. As buyers cannot physically touch the watch they are ordering, Factory 121 guarantees that, in case of any problems, the product will be exchanged or taken back after repayment in ten days without any question.

The price paid by customers (between 120 and 200 Euro) represents very much a mass customization cost structure - and is much below the average price of a standard Swiss watch of this category. Costs and distribution margins which can easily reach two thirds of a watch's price in a traditional distribution system have disappeared in this model. This enables Factory121 to invest heavily in the maintenance and development of the firm's online platform - and to counterbalance the additional manufacturing and transaction (handling) costs of dealing with individual customers' orders.

As soon as an order is made, it is transferred to the manufacturing site of Rhodanus AG, located in the Swiss province of Valais. The sixty employees of this family owned watch-maker have been assembling prestigious Swiss brands for over thirty years. A made-to-order watch will be mailed to the customer within ten working days. Despite the already launched web site, the owners plan to offer their products also in affiliate stores and for corporate customers.

The web site has just launched, and it's too early to evaluate if Factory 121 will become the DELL of the Watch Industry. However, early user feedback is very promising ("Je suis impressionné en bien par la qualité de votre service client", says Marc Priolo, Head of DELL Customer Service Switzerland). I will follow this case closely and keep you informed what's happening at Factory 121. In the meantime, I am waiting for the real big innovation in this field: How could I customize my time and get that 25-hour-day?

Rapid Manufacturing Platform promotes information and discussion on main technology enabling mass customization

The term rapid manufacturing (RM) refers to the generation of production components either directly on an rapid production machine or as part of the process chain, using similar technologies as known for rapid prototyping. The idea is to produce finished manufactured parts, not prototypes. The benefits of RM over many conventional production processes are easy to appreciate -- it completely removes the expensive process of producing tooling. In principle, parts can be manufactured as soon as the design process has been completed and changed at the touch of a button. This makes RM the perfect manufacturing technology for mass customization in many areas.

But until we are at this state, there are still many steps to go. Most of today's applications involve relatively small quantities of (small) parts. In fact, Terry Wohlers, a leading rapid manufacturing expert, states that it is unlikely that RM will ever reach the production capacity of processes such as injection molding, die casting, or sheet metal stamping. For many mass customization companies this may not matter. Nevertheless, for most organizations RM is still seen as science fiction.

This is why two European research organizations, Fraunhofer-Gesellschaft from Germany and TNO from the Netherlands, have initiated the Rapid Manufacturing Platform, an open collaboration platform on the internet to foster exchange of information and knowledge on RM.

Companies and other organizations are invited to visit this virtual counter for all kind of information regarding RM. The website contains publications, case studies and scientific papers to show RM capabilities. There is also a forum to raise a question or start a discussion with experts in the field. The forum is coordinated by Anton Gerrits from TNO [Anton.Gerrits AT tno.nl]. He invites managers and scientist alike to use this forum and contribute with their own material.

Have a look at http://www.rm-platform.com

An overview of recent customization offerings in footwear and apparel (Updated)

Footwear and apparel are the most common products being customized today. I get many e-mails asking about some major examples in these areas. Thus, here a short collection of some more recent examples. This is not a comprehensive list !! If you know an important example missing here, just e-mail me and I will be glad to include it in the list. Or just add a comment below (this list has been updated on Oct 27).

The following list was initiated by the web blog 'World of Custom, An Overview of Current Custom Consumer Offerings', as compiled by Jason Davis/Merge Design.

FOOTWEAR -- SPORTSHOES
(more detailed descriptions here)

Adidas Mi (http://www.adidas.com): Six shoes (running, soccer, tennis, indoor, basketball) with three areas of customization; fit (length and width of each foot), performance (outsole and midsole options and seasonal upper materials) and design (choosing from over 100 color combinations and embroidered lettering). All of which has to be done in person at select Adidas store locations.

Reebok Custom (http://www.rbkcustom.com): NEW! One of the best configurators with many features. But even if this is a perfect example of how a configurator should look alike, I am afraid that RBK will just be seen as a late follower, copying what everyone else in their industry does as well. There are no innovative customization features from the perspective of the consumer.

Converse (http://www.converse.com/converseone/): Three shoes (Chuck Taylors high and low and Jack Purcells) with the One Star coming soon. Custom color and embroidered lettering online using the Nike iD engine.

Nike iD (http://www.nikeid.com/): Fifty-one shoes (thirty-one for men, seventeen for women and three for kids) six bags, five watches and three golf balls. Custom color and lettering on Nike’s third generation site.

Puma Mongolian BBQ (http://www.puma.com/mongolianbbq/): Single style served up at hands on kiosks open for limited times at select Puma locations. Very tactile with a DIY flavor. There is also an on-line version replicating the in-store experiment.

Vans (http://shop.vans.com): Two shoes. Custom color and patterns online with a solid and well thought out interface for color selection.

Timberland (http://www.timberland.com/customboots/): new website, now with state of the art configurator, many color options for men and women (more extensive review here).

JG Customs (http://booktown.com/jgcustoms/): hand painted, real actual personalization, small batch sizes, DIY approach.

O’Neill: (http://www.oneill-action.com/designyoursneaker.php) open innovation experiment, co-creation of new styles and design competition, but no custom manufacturing

FootJoy Golf Shoes (http://www.myjoys.com/): Popular golf shoe. Custom color and individual length and widths for both right and left shoes.

FOOTWEAR -- DRESS SHOES

Selve (http://www.selve.net): Munich based custom footwear company for women's shoes. Latest design and custom fit (based on foot scan). Stores in Munich and London. Manufacturing in Italy.

Steve Madden (http://www.SteveMadden.com):Newly-launched “Design Your Own” collection on SteveMadden.com offers options resulting in a total of 4,221 combinations. Consumers can make their choices among product features such as heel height, pattern, material, finishing and color. Special as formal women's dress shoes -- no sneakers!

Leftfoot (http://www.leftfootcompany.com): Leading European provider of custom footwear for men. Stores all over Europe, production in Finland. Custom fit and design.

Otabo (http://www.otabo.com): Upcoming US brand and manufacturer for mass customized men's shoes. Growing number of stores, manufactured in the US (Florida).

APPAREL

Adidas Team (http://www.adidas.com): new Japanese offering, create your own team outfit, nice and easy configurator

Land’s End (http://landsend.com): Nine apparel pieces (Jeans, Chinos, Shits and a Jacket for men and women). Color and custom sizing all offered up on the Archetype engine.

Target, JC Penny, Tommy Hilfiger: Similar offerings to Lands’ End (mostly jeans and pants with a shirt or two). All use same Archetype engine.

MeJeans (http://mejeans.com): A new custom jeans maker in the US, offers more than 89 trillion possibilities for truly custom jeans, self measurement, rather complex configurator, for people loving and knowing jeans very well. Very good pricing (about 100 USD per pair). [more background information]

UJeans (http://UJeans.com): Founded in Oct 2005, this Canadian jeans manufacturers offers custom jeans as well, self measurement, again only for people knowing jeans very well. Good pricing (less than 100 USD per pair) and a great "workbook" to educate the customers about eans customization (the configurator is still very basic, though).

Polo Ralph Lauren (http://www.polo.com): Fourteen apparel pieces (four shirts and one tie for men, four shirts and one bikini for women and four shirts for kids). Basic color and monogram choice via straightforward web page.

Nunatak Kobuk Mountain Jacket (www.nunatakusa.com):
Custom hiking jacket; rather simple design, style choices come down to pockets on the front or inside and a hood. choice of nylon; custom arm and chest measurements for perfect fit (review here). Alternative offerings from Beyond, ME: www.beyondfleece.com

NeighborHoodies (http://neighborhoodies.com/): Growing chain of personalization stores. Plethora of base products (sweatshirts, t-shirts, pants, shorts, hats, underwear, baby clothes, etc.). All customized with lettering and iron-ons.

Spread Shirt (http://www.spreadshirt.com/): Much more than customized t-shirts, but opportunity for every user to open custom t-shirt shop and sell their own creations to others. Great business model, and one of the largest recent success stories.

CustomInk (http://www.customink.com/): Special to this site is its community orientation: Most customers do not customize for themselves, but for an entire group. Kind of peer-segmentation.

Route One (http://www.routeone-design.com/): Custom corporate clothing.

Pixeltees (http://www.pixeltees.com): Easy and simple t-shirt customization site. Many similar sites like this on the web.

Lids baseball caps (http://www.lidscyo.com)

GEAR

Time121 (http://www.factory121.com): Swiss made custom watches, high quality, many customization options, VERY nice configurator.

Fossil (http://www.fossil.com): Very simple customization offering, but reinforcing the trend.

Blancier (http://www.blancier.com): Anotehr custom watch manufacturer, but much less choice and options compared to Factory121.

Ultimate Ears Earbuds (www.ultimateears.com): Pricey earbuds with superior sound quality and custom buds based on silicone casts of customers' auditory canals and outer ears taken by an audiologist.

Timbuk2 (http://www.timbuk2.com): One bag (classic messenger in four sizes). Custom color, options and accessories through well built online site. One of the first mass customizers in existence. Powers also NikeID custom bags.

Freitag (http://www.freitag.ch/f-cut/): One bag. Based on custom, utilizing used truck tarps for base material with online interface that lets you select the actual pieces made to build your bag.

L.L.Bean (http://www.llbean.com): Three bags (boat tote, classic backpack and messenger bag). Custom color and feature selection (extra pockets, strap lengths, etc.).

Open innovation and mass customization are among 2005 most popular and pertinent management tools

Since 1993, Bain & Company, a management consultancy, is investigating the use and performance of popular management tools. In this year’s edition, mass customization and open innovation are included for the first time as two of the 25 most popular and pertinent management tools.

The survey is based on a findings from 960 global executives surveyed during 2004, including 212 Chinese business leaders. Executives were asked questions about the use and satisfaction by their companies with the management tools and techniques.

Here are some summaries of the reports of mass customization and open innovation:

Mass Customization is defined by Bain as “the large-scale production of personalized goods and services. To succeed at it, companies must harness technologies that revamp their speed, flexibility and efficiency at minimum expense. Combined with organizational changes to focus firms on the unique needs of very small customer segments, these technologies help companies affordably deliver custom versions of their offerings to profitable niche markets.”

I was pleased to read that also Bain sees MC beyond being a pure manufacturing strategy: “Once considered a manufacturing and supply chain capability, Mass Customization now encompasses a company’s ability to differentiate a product or service in any way—from distinct branding to unique delivery.” [Read more: http://www.bain.com/management_tools/tools_mass_customization.asp].

Open Innovation (called open-market innovation in the study) is characterized as applying “the principles of free trade to the marketplace for new ideas, enabling the laws of comparative advantage to drive the efficient allocation of R&D resources. By collaborating with outsiders—including customers, vendors and even competitors—a company is able to import lower-cost, higher-quality ideas from the best sources in the world.”

According to the survey, companies need to focus on four areas to foster open innovation, including improving innovation circulation (“to build information systems to capture insights, minimize duplication of efforts, improve teamwork and increase the speed of innovation”), but also to increase innovation exports (“establish incentives and processes to objectively assess the fair market value of innovations, raise incremental cash and strengthen relationships with trading partners”).

A strong focus on customers and users as partners of the corporate innovation process is lacking in Bain’s interpretation of open innovation. But the notion of the idea anyway is already a big step forwards. [Read more http://www.bain.com/management_tools/tools_open-market_innovation.asp]

Conference Report MCPC 2005: Learnings and Observations from the 3rd MCP World Conference

The Third Interdisciplinary World Congress on Mass Customization and Personalization (MCPC 2005): Converging Mass Customization and Mass Production (Hong Kong, 18-21 Sept. 2005)

The MCPC conference series is the largest international event to address Mass Customization and Personalization (MCP) from a multidisciplinary perspective. Like the earlier events in Hong Kong (2001) and Munich (2003), the 2005 conference assembled again an international community of scholars and managers to discuss latest achievements in the field.

If you missed this event, you can download the full abstracts of all papers from the website (www.mcpc2005.com). There is also an order form to mail-order the full text proceedings (on CD Rom), containing more than 800 pages of research papers, case studies and reports (price: 95 USD, credit card orders at the conference administrators at Hong Kong Univ of Science and Technology).

Here some of my observations from the conference:

Participants: I was very pleased that this time we could increase the share of practitioners to more than 50 percent of participants. Among them, a number of large US consumer good companies had sent representatives to observe the conference and to get feedback for own upcoming initiatives. We will see a number of exciting new custom offerings in the next year.

Case study track: There was a very strong case study track this year. This provided great insight into the scope and diversity of mass customization. There is not one mass customization concept, but many forms and structures. As a result, we had several parallel conservations about the same term (see here for my recent revision of my mass customization definition).

The apparel people are already very advanced in their application and discussion of the concept. We had some very large Chinese apparel manufacturers and the main technology providers under the participants. For them, mass customization is already a commodity you just have to have to stay in business. But mass customization here is not only about serving individual consumers with custom clothes.

Just consider mass customization on a retail level. Powerful retailers nowadays demand that they get a different assortment of brand merchandise than their main competitors. They demand special editions or variants which can be only bought in their stores. One reason is to prevent direct price competition and to become less comparable. Another important reason is to get also an assortment that fits better to local preferences and trends. Leading brands and manufacturers react on this trend by offering mass customization programs on the retail level. Here, not an end-consumer customizes her custom garment, but a retailer’s representative. Products are produced on demand, and in a small lot size.

In other industries, mass customization is still on a much more abstract level. One small, but very interesting track of the MCPC 2005 focused for example on mass customization in architecture. While many buildings are custom designed per definition, owner or user participation in the design process is just starting. Also, manufacturing in this industry is characterized by rather small and decentralized suppliers. Terms like product platforms, commonality, or interaction toolkits are just being discovered in this industry.

The market for customization: The conference could still provide no answer on the question about the market size of mass customization. Once again, the conference showed that we can not apply traditional market research and forecasting to predict the market size for mass customized offerings. Most customers have no experience with this model, and so they have to experience real offerings of mass customization before they can decide about their acceptance of this model and their willingness-to-pay it. Mass customization remains trial-and-error.

Mass customization demands critical mass: There was a lot of talk about dedicated competences and capabilities for mass customization. Research is progressing in this field, and we discussed the results of several studies and research projects focusing on the unique set of capabilities mass customization requires. I will report in upcoming contributions for this newsletter in more details about the specific capabilities mass customization requires. But: Conference participants agreed that the required competence set is large, and that as a result mass customization demands critical mass – it is otherwise too demanding.

But is seems that customer integration competence is key. The ability to interact with customers efficiently in order to understand their preferences and transfer them into an individual offering is seen as the main cost driver of mass customization (as a result, the system also should be initiated by the actor with access to final customer).

The factor balancing a mass customization system is the selection of the degree of variability (customization options). This decision effects all following decisions. A mass customizing firm gets a main competitive advantage when it has a detailed mechanism how to set and maintain this optimal degree of customization.

Collaboration and interdisciplinary research: And a final conclusion by many participants: To make mass customization happen, we have to cooperate and build multi-disciplinary teams … this conference was all about this! It was a great pleasure to have some many disciplines and backgrounds at one place. Our community of practice is growing – and I am looking forward already to the next meeting.

More information:

The MCPC 2005 web site
Download the program and abstracts of all presentations
Order the conference proceedings here
Report about the China study tour which took part after the conference.
A picture album with conference photos

Mass Customization Web Links

A collection of interesting sources on mass customization I found recently the web. All links (and many more) are also added to my collection of mass customization links on del.icio.us, a social bookmarks manager. It allows to easily add sites to personal collection of links, categorize those sites with keywords, and to share the collection with others. CONTRIBUTE to this mass customization link collection by marking interesting links with the tag 'mass_customization'. Then everyone can find them. Here is the list of recent mass customization tags on del.icio.us. And here some new interesting links:

(1) Body scanning is a major enabler to shift the focus of apparel production from large quantities of cookie-cutter clothes to one-of-a-kind articles with individualized sizing and design features. A great web page at Cornell University has plenty of information on body scanning.

(2) WeMadeByMe.com is a sophisticated new website selling customized shirts to really good prices. It offers some nice Flash features (powered by Shirtsdotnet.com), even if the core configuration process could need a bit more support functionality. But it is a promising new start of a new player in the European mass customization scene.

(3) Personalization Stores are nothing new, we have called this store-based configuration since years, and it was the usual form of customer interaction for customized goods before the internet, but CSCOUT, a German/US trend research consultancy, has just called the movement from the web to offline stores a major trend. Great for all who are in this game!

(4) European Management Review: Co-designing modes of cooperation at the customer interface. Implementing and operating personalization stores, or offline configuration systems, is not always easy. This is the topic of an academic article in the latest issue of the European Management Review (Issue 1/2005). The paper explores new modes of cooperation among customers, retailers and manufacturers resulting from co-design.

Customization in the press: Reinforcing the customization trend

This is a review of three recent press publications which highlighted or reinforced interesting aspects of customization and personalization. Together, they provide a nice summary of upcoming trends around the theme of the creative consumer. The first article is an interview with Rob Walker on 'actual personalization', the second one reports promising news from new VC for MC, and the third is from The Economist and discusses the creative consumer and user innovation.

(1) Rob Walker and “actual customization”

Rob Walker is regarded as one of the most influential thinkers on consumption trends in the United States. He examines consumer behavior in his weekly column, "CONSUMED," for The New York Times Magazine. o the following part of an interview with Rob Walker by Holly Taylor, published by the online magazine Core77, stroke my attention. In this interview, Walker draws a fine line between “customization” and “actual customization”, the first offered by companies via configurators (selection from pre-defined options), the latter an activity of consumers who take an existing product and modify it in a unique way by their own.

“C77: What are the themes that come out in what consumers are responding to?

RW: I think that the most interesting phenomenon lately is the idea of customization.
I want to draw a line between the idea of customization and actual customization. They are two different things. I think that many businesses are catering to the idea of customization. Like with the Nike iD website or Puma's Mongolian Barbeque—where you can choose colors and materials for a sneaker—it's customization, but it's within parameters. You probably have enough choices there to come up with something that is extremely unlikely to be worn by someone else at a party.

But there is a huge difference between making a pair of shoes, and working through these sets of options provided by a giant company to produce something you want, so long as it has their logo on it. I think that that idea of customization is resonant with everyone. It's obvious that we all want two things in life: to stand out and be different and to fit in and be part of something. That's not my insight, but I think that it's true.”

Walker is then referring to artists like SBTG (google SBTG and sneakers to learn more) who is physically hand painting standard Nike shoes in editions of 25 or 40: “He's not sitting around doing project work for a company and speculating or wishing that someone would recognize what he's doing. He's doing stuff that is being treated as art objects.” Interestingly however, even this “real” customizer is working in the context of Nike and Adidas. They take existing branded standard products and transform them into a personalized piece. So also actual customization builds on “mass”.

(2) Personalization catches fire among VCs

While hand painting sneakers are a trend that might have not a huge following with the majority of consumers, firms are increasingly helping their customers to become creative on their own, as an article by Verne Kopytoff in the San Francisco Chronicle reports. Here are some quotes.

Kopytoff reports about companies which enable especially personalization or esthetic design, i.e. building on the trend described by Walker above that consumers want to transfer existing standard products into an object of self impression. And recently ventures capitalists are investing (again) in these companies:

“Customized T-shirts, posters and postage stamps have emerged as the Internet's latest darlings among venture capitalists. Zazzle, a Palo Alto company that allows users to buy personalized products, announced it had received $16 million in funding from two of Google's early backers, Kleiner Perkins' John Doerr and Ram Shriram of Sherpalo Ventures. Earlier this year, a similar company, CafePress.com, in San Leandro, received $14 million in a second round of funding led by Sequoia Capital.”

At Zazzle “… users create their own designs for products including T- shirts, posters and greeting cards. The websites then handle the printing and shipping. Many people simply use the web sites to make gifts for family members and friends. Others earn royalties by selling their products or designs to shoppers on the sites.”

“The idea is more evolutionary than revolutionary. Consumers have been able to get customized trinkets at flea markets and county fairs for years featuring their names or images. What sets the online version apart is its potential global reach. Shriram, the investor, said that is in part what attracted him to Zazzle. "This is an opportunity to do mass customization," he said. "The scaling of this has been an interesting challenge."

(3) The Economist: The rise of the creative consumer

The Economist (Mar 12, 2005, p. 75) discusses how and why smart companies are harnessing the creativity of their customers. The story builds on the new book of Eric von Hippel (see interview below). Here some quotes:

“ … Not only is the customer king: now he is market-research head, R&D chief and product-development manager, too. This is not all new. Researchers such as Nikolaus Franke at the University of Vienna and Christian Lüthje at the Technical University of Hamburg have demonstrated the importance of past user contributions to the evolution of everything from sporting equipment to construction materials and scientific instruments. But the rise of online communities, together with the development of powerful and easy-to-use design tools, seems to be boosting the phenomenon, as well as bringing it to the attention of a wider audience.

"User innovation has always been around," Eric von Hippel says. "The difference is that people can no longer deny that it is happening." Indeed, it is "very likely that the majority of innovation happens this way." … In the past firms have mostly resisted customer innovation or not known what to do with it. American farmers were lobbying manufacturers to make cars with detachable back seats as early as 1909. It took Detroit more than a decade to "invent" the pick-up truck. … Within three weeks of launching "Mindstorms", a build-it-yourself robot development system, in 1997, Lego was facing around 1,000 hackers who had downloaded its operating system, vastly improved it, and posted their work freely online. After a long stunned silence, Lego appears to have accepted the merits of this community's work: programs written in hacker language may now be uploaded to the Mindstorms website, for example. …”

The whole article is worthwhile to read, get it on The Economist website or search for it in your local library. Or just read on for an interview with Eric von Hippel about this topic.