Mass Customization & Open Innovation News

Mass Customization at HannoverMesse - Project KUMAC Featured in #HM13 Science Hall

From 8th to 12th of April 2013, famous trade show  HannoverMesse will take place in Hannover, Germany. Are you going to be there? Great! So will I.

The German Federal Ministry of Education and Research (BMBF) will have a large exhibition stand in a prominent spot (hall 2, stand C24) and has invited my research group at RWTH Aachen University to join them. We will present the latest findings from our research project KUMAC which is being funded by the BMBF.

I will be there on Monday, 8th, during the afternoon. Of course, members of our project team will be present throughout the week. So if you are going to visit any the largest industry tradeshow of the world, make sure to stop by! 

The objective of the KUMAC project is to develop new methods for mass customization providers in the German retail market. These methods support an increase in productivity and value creation potential of these retailers.

At HannoverMesse we will simulate the prototype of an interactive value-creation process in mass customization, using KUMAC technology to demonstrate its potential to increase both effectiveness and efficiency. In detail we will show and expain:

• The Live-Help-System connecting online-offline configuration,
  
• The Tablet Configuation Software,
• 3D-Scanner and Softwaretools as well as
  
• RFID-Technology for mass customization.

 

[Book Review] Custom Nation: Why Customization Is the Future of Business and How to Profit From It

"Customization of products is one of the most important business trends of this decade!" We hear this a lot when asking business folks about their opinon on the mass customization market. And we wholeheartedly agree.

"Offering customized goods is mainly a technical question, your product is either suited or not, and if it is suited, there is not too much more to it than having the right production processes!" We hear that a lot, too. And, probably not much to your surprise, we have a really hard time agreeing here.

Starting a successful customization business or expanding an existing business onto the customization market is nothing to take lightly (unless you want to join the 20+% of mass customization businesses that vanished from the market relatively fast, as we found in our MC500 study). Having the right product is only one of several important aspects, amongst which some are really suited to ruin your business plan if you do not consider them beforehand. 

Thank god there are some good books about customization to help you get up to speed and avoid all the little (or big) obstacles on the path between your ideas and a successful MC venture. And another pretty good one has just joined their ranks!

Custom Nation: Why Customization Is the Future of Business and How to Profit From It

Anthony Flynn, Emily Flynn Vencat

Availible via Amazon Paperback or Amazon Kindle

 Coming from Youbars founder Anthony Flynn and business journalist Emily Flynn Vencat, "Custom Nation: Why Customization Is the Future of Business and How to Profit From It" brings some high quality information and expert insights in the form of a well-written, convenient to read book. 

Split into two parts the authors go in depth on the history and quirks of the customization market, their prediction for its future development and a lot of practical advise about how to start a successful customization venture, or roll out an expansion onto the customization market with your existing company. 

In my opinion this book is really worth reading if you are (planning to go) in the customization market. It is full of interesting insight with actual relevance and is easy and fun to read even for non-experts. My conclusion: Finally a kind of field-book and "how to do" approach that perfectly supplements the existing conceptual and academic texts.

Anthony Flynn and Emily Flynn Vencat also kindly agreed to participate in our series of MC&OI entrepreneurs! Please find the whole interview here!

A lot more information about the authors, their book and research can be found on their official website.

Interview: Glubal: A configurator for university-level education to solve the complexity of choice of study programs

Whether that be as a regular student, starting to dive into a chosen field of knowledge, or as a professional, taking the next career step by gaining additional skills, creating a matching a student`s very own situation of life  is very important.

However, there always have been a dis-connect: too many offers, and too much confusion. Since more than ten years, I am talking about the idea of an "education configurator".

Now this configurator finally came true.

Glubal wants to make flexible, individual university-level learning happen . The venture is just about to go live with their online configuration system and represents an educational network, connected to an online configurator.

Very simply put, learning interests (to-be students, professionals seeking promotion etc) will be enabled to configure a list of academic programs by the means of the configurator frontend. The programs offered are provided by the universities and other education facilities connected to the glubal network. The opportunity to filter avilible offers to match one`s own life situation best sounds like a compelling idea in theory.

 

Glubal Configurator: Beta version. Click to enlarge

 

Professor Marc Drüner, glubal CEO and partner at trommsdorff & drüner consultants, kindly agreed to engage in an online interview and explain the concept in more detail.

FTP: Professor Drüner, first. Congratulations to this great idea and realization! You have created glubal as an intermediary to support a new kind of individual studying. Can you tell our readers a bit more about the concept behind glubal and what makes it unique?

MD: Our brand glubal stands for global university network. We provide an online platform (www.glubal.com ) making accredited study and training opportunities available online to students and business in collaboration with international universities.

The idea of glubal derives from the background of the Bologna Reform ten years ago. The establishment of the common credit point system (ECTS) and the three-cycle-degree (Bachelor, Master & Doctor) in Europe makes a more flexible and more international study possible.

As professor at the Steinbeis Hochschule Berlin for ten years and director of an international management consultancy, I have gained insights into economic as well as academic life. There is a problem on both sides: Even though the employment market demands increasing flexibility from employees and employers in terms of education and training, the current mainstream educational system is just too rigid for many people and does not support life-long learning. With glubal, we want to tailor study programs to people’s individual, unique lifestyles. This is the way to ensure a smooth entry into the jobs market and to guarantee chances of promotion by combining working with studying for a qualification.

glubal’s USPs are individuality, flexibility and internationality. The unique feature of our concept is the glubal study configurator (https://www.glubal.com/en/glubal-configurator ) . Dependent on a student’s personal requirements, fields of interest, personal budget and chosen method of study, every course component of our global university network can be combined flexibly and individually with other components from elsewhere to create a study program lasting as long as personal circumstances dictate. We ensure that the module combination selected by a student will lead to a recognized degree.

FTP: Do you consider glubal’s target group to be more the regular student, trying to go a more flexible way of studying or the “lifelong learner”, the professional aiming to get additional qualifications?

MD: There is no conflict between students and professionals for glubal in terms of the target group. Our service is aimed, above all, at graduates and employees interested in promotion. We also offer an attractive alternative for current students who need more flexibility and individuality in their study.

Besides potential students, companies and colleges can also benefit from our service. For companies, glubal offers not only a whole new way to access the talents of tomorrow, but also the connection to the university sector. For colleges and universities, we make it possible to take on a growing number of students, to fill more places on existing modules, to increase international brand recognition and improve access to business.

FTP: Establishing a network that allows to (more or less) freely combine courses from different universities and nations with each other sounds like a really challenging task, especially given the fact that the awarding of academic degrees is regulated by national law. How do you ensure compatibility between all these different modules?

MD: The given background of Bologna Reform I mentioned before is the corner stone of mutual recognition of credit points and academic degrees between colleges and universities in different countries. People have been working on a more transparent and compatible education system in the international context since more than ten years.

I think we have reasons to believe that this trend will carry on and evolve further in the future and that glubal will be able to promote this process. However, glubal will not interfere with the given administrative and approval processes for academic modules at our glubal partner universities. The degree-granting universities stay in the driver-seat and stay completely free to define, which modules of other universities they do accept under their given examination regulation.

FTP: The Bologna Process intended to do what could become a reality with glubal: Allow to study internationally, not just in your country, and in a way that works best for your interests. Yet, many politicians, academics and students say that the ideas of Bologna have not been implemented well enough to really work. What makes the glubal approach more promissing to achieve better results in comparison?

MD: Of course there are still dozens of problems to solve even after ten years reform, especially in terms of the compatibility between the qualities of modules in different universities. But you cannot deny that the mobility of students inside Europe has greatly increased at the Erasmus program for instance. We believe in the vision of a more tolerant education system in the future in the scope of Bologna Reform. With glubal as an educational initiative we would like to contribute to the process of harmonization between universities and help shaping a more flexible education system in the future.

FTP: The idea of highly customized academic learning is not new. Until today one of the great bottlenecks has been the lack of a well-designed configurator, allowing (future) students to select the right modules for their individual life situation and learning goal. Can you tell a bit about the process in which your clients will select their individual courses? Are they being guided or just presented with a configurator?

MD: We have been working the whole time on the more simplified and clearer configuration process. Basically, a student only needs to visit our online platform, choose his preferred subjects and other options in our configurator and he will get the suggested study combination from the system. Of course we also offer personal study consultancy through free hotline with our professional study advisor, who will accompany the applicants along the whole way of application.

Our first course begins this autumn and the application has already started. Our glubal team will do the best to cover the individual needs of our applicants. With the further expansion of our global university network, we will be able to offer even more flexible configurations in the future.

FTP: Developing a system that, if it works, could do a lot to make flexible life long learning a reality is certainly no easy process. Can you tell a bit about how you worked on designing the system? Did you work closely with students and lecturers to get an idea of what they really desire in a sort of customer co-creation?

MD: I am director of an international management consultancy and professor at the Steinbeis Hochschule Berlin for ten years. This kind of career combination enables the possibility to exchange opinions with students, lecturers and companies for me. I have realized that there are huge demands from both economy and academy in increasing flexibility of the education system. The idea of glubal derives exactly from these demands.

FTP: Studying for a master's degree takes about five years, often more. glubal is a private profit venture and as such is subject to the laws of the market. How can you guarantee that students will be able to complete their studies as planned in case of, say, glubal (or HighEd Solutions) becoming insolvent?

MD: glubal is an aggregator of studies and does not grand degrees. glubal students will enroll in and enter study contracts with the chosen universities, and earning real credit points as every other normal student. In this sense, they don’t carry any market risks in terms of the possible fluctuation of glubal’s profitability.

FTP: Can you tell about your network of educational institutions (universities, online course academies,...)? Which and how many partners does glubal have so far and where are they from, geographically?

MD: glubal stands for global university network. We have been in contact with universities from the USA, Great Britain, Australia, Turkey, France, Iceland, Spain, Italy, Chile and of course the so-called DACH countries (Germany, Austria and Switzerland). Many of them are already official members and many other have given very positive feedback. We are optimistic that our network will successfully expand to these regions. We have also planned the market entry in BRIC countries in the future, starting with Asia in 2013.

FTP: glubal offers scholarships as well. Can you tell a bit more about these?

MD: We have already announced the first three scholarship students for a bachelor’s, a master’s and a doctoral degree at one of our first partner universities, the Steinbeis School of Management in Berlin. With the growing membership of our university network, applicants can expect more attractive scholarships at glubal in the future.

FTP: What are your plans for the future? Where do you see glubal heading in the next 10 years and what do you think can (and should) still be improved about the system/process as it is right now? Can we expect more integrated services in glubal in the future?

MD: Like I mentioned before, we are now already active in many countries. The intention of internationalization will increase in the future. We have already planned the market entry in the BRIC countries (Brasil, Russia, India and China) in 2013. Of course there are still a lot to improve in every aspect, for example a bigger university network, more personalized configuration, more optimized platform usability and so on. The driving force in our team is to provide high quality education with unprecedented flexibility to all students of the world.

FTP: Professor Drüner, thank you very much for the insights into the concept on glubal. Much success!!

Interview: Edward Witlox of RHIEM Services: Logistics for Mass Customization ... for Build-A-Bear Europe and others

Mass customization companies are different from "normal" ones in a number of ways, like their need for a very well working webshop/ configurator that lets the consumer configure his dream-product in an easy yet powerful way. Or the special logistics setup required to produce/ assemble a customized product right after the customer submitted his order and to ensure timely delivery to his doorstep.

From my experiences with MC companies, especially small and medium sized ones, these logistical matters can be a serious barrier when ventures reach a critical number of sales and need to scale up their fulfillment and/ or webshop system.

At the MC2012 conference in June I had the pleasure of meeting Edward Witlox, Director of Business Development & Sales at RHIEM Services, a German company originally founded as a printing service provider which has since then successfully evolved into an alround e-logistics expert. As part of their efforts to positon themselves as a partner for MC companies they are, amongst others, responsible for a lot of steps in the logistics chain of Build-A-Bear, famous seller of individualized plush bears.

Edward was so kind to agree on giving us an interview about his views on the logistics aspect of MC, barriers faced and ways to overcome them, and why it can be mission critical for expanding companies to get a strong (e-)logistics partner in time.

FTP: Edward, you told me that RHIEM Services sees itself as a B2B service provider for all logistical needs of mass customization companies. This is an interesting value proposition. So what is it in more detail?

EW: RHIEM is a so called 3PL+ or Value Added Logistics Service Provider, offering, directly and indirectly, a complete of set of logistic services, e.g. (bonded) central warehousing incl. B2B & B2C fulfilment (pick, pack & ship), handling of returns, and of course all shipping. But we also developed into offering customized assembly and production of products for each individual consumer of our clients. And we can manage the complete e-commerce platform or a shopping cart plugin for existing web shops.

FTP: This sounds impressive, but how scalable are your customization services?

EW: Based on a very robust logistic process design (in terms of structure, systems, skills, staff, strategy, style and shared values) RHIEM offers services, scalable to the changing needs of its customers, allowing organizations with no warehouse capacity or without a large enough staff or expertise to manage inventory and orders, saving them costs, while offering a degree of flexibility. As a result, companies of all types are serviced with unlimited scalability.

Several of our current customers which started working with RHIEM while they were a start-up considerably grew during the years, also due to a very good cooperation between parties.

FTP: Pretend I was an entrepreneur on the MC market. How do I profit from contracting with a large company like yours?

EW: Entrepreneurs acting on the MC market will face a momentum to consider whether they remain doing the logistics themselves or decide to outsource. In the later case they will need a partner with a robust logistic process being capable of seamlessly aligning to the processes of the customer company. Being scalable in every facet, without any minimum restrictions to organizational size, turnover or storing volumes to start the cooperation, RHIEM guarantees entrepreneurs an enduring long term logistic solution. RHIEM is such a Service Provider.

As an ecommerce company, MC companies are still acting as a niche player, because their customer base will be mainly exist out of early adaptors of their products. These companies might extend their market, by going cross border. In those cases there are very few LSP’s, offering a scalable ecommerce platform with payment methods for every European country with features like multi-languages, multicurrency and VAT handling; completely integrated with a warehouse management system.

FTP: In your company you are especially responsible for MC clients. From your professional experience in the last years, what separates a mass customization company from a "traditional" one in terms of logistics needs?

EW: From out of a logistic perspective MC companies have a more demanding, intensive and complex logistic process, which also changes over time more rapidly. In general, offering a broad variety of product attributes or combinations to realize a customized product, results in a more complex manufacturing and assembling process, demanding more resources, with a bigger risk on mistakes, resulting in higher costs.

By provisioning flexible, but robust logistic processes, RHIEM is capable of matching complex customization demands, eliminating the risks, against slightly higher logistic costs.

FTP: One of your larger clients is Build-A-Bear Germany. What exactly do you do for them?

EW: RHIEM operates the complete B2C e-logistics for BAB, hosting and managing the web shop in terms of e-fulfillment. Actually we host the complete product catalogue and shopping cart. In practice this means that we handle the orders and take care of the financial receipt. After the payment is received, we do the picking of the chosen bear and its attributes, followed by the assemblage. Before packing the product in an eye-catching shipping carton, a fully personalized birth certificate of the bear is printed and added to the bear. Finally, we take care of the distribution of the parcels in Germany, Austria, Switzerland as well as in the Netherlands, Belgium and Luxembourg.

Besides this, we also take care of the B2B fulfilment, by replenishing the BAB stores.

Both logistic flows are being preceded by the main logistic product flow from the manufacturer towards our central warehousing, with RHIEM taking care of these flow as well as the customs clearance for entering Europe.

FTP: Can you give any other interesting examples of MC clients you are working for and what was/is special about your cooperation?

EW: RHIEM services several clients with our Full Color Digital Print-On-Demand techniques, producing high quality individualized marketing materials.

FTP: Do you see logistics as a barrier for growing MC companies which did or are about to make the jump from a few dozen to several thousand sold articles each month? What can be done to overcome this barrier?

EW: All companies jumping from a few to numerous sold articles per month will face a momentum that logistics will become a big hurdle. Especially for MC companies, offering a large variety of product attributes, this hurdle is becoming an even larger barrier. To overcome such a barrier, MC companies do have to make a strategic decision, to ‘make or buy’. Because for many MC companies logistics are not their core competence, seriously hampering their organizational growth, it is wise to consider outsourcing in an early stage or invest heavily in resources and gaining logistic knowledge to do themselves.

FTP: MC is definitively a trend. What does it mean for logistics companies like RHIEM?

EW: With its ambition to become a Mass Customization Logistics Expert, RHIEM will have to extend their e-manufacturing and e-assembly capabilities, like embroidering and engraving to align with several kinds of modularity methods.

FTP: Which changes are you awaiting in the coming years and how do you adapt to best position yourself?

EW: While Europe is still experiencing a delay in cross border ecommerce (on avg. 4-6% of total sales) this situation is changing due to the reduction or even elimination of cross border barriers. RHIEM already has a major competitive advantage in handling cross border fulfilment. Now also optimizing its reverse logistics capabilities it will cover the complete forward & reverse logistics internationally.

Specifically on the MC trend we will face more and more companies adapting any type of mass customization, emerging from segmented standardization into tailored or even pure customization. RHIEM will align with these developments by anticipating and proactively investing in the resources, essential for deploying its manufacturing and assembling activities efficiently and effectively, resulting in the fact that RHIEM continuously will be able to stay tuned with changing customer demands.

FTP: Did you (have to) adapt a lot to satisfy the needs and wishes of your MC clients?

EW: Adapting to satisfy the needs and wishes of our clients is one of our core competences. Historically RHIEM transformed from originally a printing company into a Value Added LSP by adapting to changing customer demands. Nowadays this is one of RHIEM’s values, actively investing based on customer demand or trends to ‘Stay One Step Ahead’.

FTP: From your observations and experiences with MC companies so far, which tips and advises would you like to give in regards to the logistic challenges they are/ will be facing?

EW: The success of MC is in the execution [not only in the concept]. The logistic process is essential in this stage and crucial for satisfying the customer. Due to the fact that technologies follow each other even faster and customer demands are changing more rapidly in the future, it will be mandatory for a MC company to adapt to these developments. Logistics will thereby become more and more one of the key differentiators between success and failure of a MC initiative.

By focusing on marketing, sales and customer service, MC companies will have a daytime job to deploy these activities well. In those cases, they need to rely on a proactive flexible, but robust logistic partner. RHIEM is ready for it, to fill in this role successfully on behalf of the customer!

FTP: Edward, thank you very much for these interesting insights and outlooks! Im definitively looking forward to follow your work in the coming years and see which ways you come up with to improve e-logistics for MC companies.

More information about RHIEM Services at their company website and also on twitter.

Personal Mobility by Daimler: New moovel platform wants to make travel more efficient

During his presentation at the MC2012 conference, Wolfgang Gruel from NBD at Daimler already indicated a major new offering that shall move Daimler into the nexat area of automotive transportation. Last week, this service was finally announced: MOOVEL 

It shal provide a more comnpelling answer on teh question: Why is it necessary that privately owned cars are often used in a really inefficient way, by either standing around most of the time or being driven by only one person where four or more passengers could be transported. 

One solution to this could be more car pooling. The idea is not new at all and i being offered in most (if not all) major cities over here in Germany. However, it is kind of revolutionary that a major car company like Daimler starts a project aiming at getting people to do what is, by traditional means, not in a car manufacturer's interest in the slightest: Buy less "useless" automobiles by using an improved, automated car pooling model. 

Daimler, though, aware of their social and ecological responsibility, has just launched a platform that does exactly that: moovel. 

The concept is really simple. Moovel is availible either as a (free) iPhone app or via their website. Users can easily offer unused seat capacity availible during a car ride they are going to take, at a certain time and from one destination to another.

Likewise, travelers in need of transportation can enter the time and places they want to go to and are instantly shown information about not only availible seats in privately offered car pool vehicles but also details on commercial rides by buy or tram offered by local companies. 

The best about it (especailly if you are used to the often tiresome information-websites of railway companies) is its ease of use. You literally do not have to invest more effort than it takes to alter one short sentense to your needs, by specifying when and where you want to go. The software does the rest, and beutifully so.

Since this is a pilot project by Daimler, the service is in German language and limited to the city of Stuttgart, Germany, for now. If it proves to be successful, though, it might be adopted and coming to a place near you sooner than you think.

So if you understand any German at all, I really recommend taking a quick look, its a concept that will be really interesting to watch evolve. More about moovel on their website.

Conference Report MC2012: The German Mass Customization Community Meeting

Unless you started following my blog just now, there is no way you could potentially have missed the announcements, special editions and features about the MC2012. This year's edition of the largest MC conference in German language, hosted by Dominik Walcher, Paul Blazek and myself, took place on 29th of June.

Despite the early time of day, the air already started to flicker from the upcoming heat of what promissed to be a really nice summer day at the marvellously desgined building of the University of Applied Sciences near edge of the Alp mountains in Salzburg, Austria.

About 150 professionals, researchers, entrepreneurs and enthusiasts from all parts of the mass customization landscape in the German experienced a tightly packed day dedicated to the opportunities of customer co-design.

Panoramic audience shot. Click to enlarge!

And what a day it was! A buzzing audience followed the presentations of no less than 24 speakers, ranging from young entrepreneurs, telling the tale of their entrance into the MC market, global players and market leaders, giving insight into proven ways and tactics to profit from customer participation, to leading scholars, showing how latest research proves the concept of the integrated customer to be more than a trend.

To not only preach customer integration but actually live up to our words and integrate our conference participants beyond questions and one-on-one networking, we had a special feature in place. Werner Haring, founder and CEO of wallero.us, had contributed to the event's multi media experience by "installing" a social media wall right next to the stage.

Social Media Wall, Courtesy of wallero.us. Click to enlarge!

This application was a real eye-catcher and various running gags were born during the course of the event - and you still can follow the #MCSalzburg hashtag for a report of the conference.

 The day headed off with the introductory panel. After a hearty welcome by co-host Dominik Walcher, my research group's members Dr. Christoph Ihl and Thorsten Harzer outlined results from our research projects and demonstrated some of the numerical "magic" behind Mass Customization and Open Innovation and how it can be utilized to take the right decisions about mission-critical aspects that many companies do not even realize to be of great importance.

As an example: asked about the ideal number of customization options to offer in your configurator (solution space), would your answer have been: "As many as possible, since more choice equals happier customers!"? If your answer to this is "yes" then our latest resarch findings might offer some ways to improve your customer satisfaction.

Following Dominik Walcher's insight into the development and outcome of the MC500, our great study of the most important MC companies from around the world, I had the chance to present on the importance of customer integration and how companies of all sizes can profit from proper employment of the concept, as well as some new MC trends of the future.

Next on the agenda was the market panel in which Franz Blach (IDEO), Franz Hölzl (Kaindl) and Wolfgang Gruel (Daimler) gave really interesting and well-received insight how Open Innovation, individualization and co-creation have changed the way they are conducting their business and the ways they found to profit from it:

• An interesting attempt at improvement of working culture were IDEO's working ethics, as Franz Blach outlined them. They are meant to be pretty much contrary to what we are used to in most larger companies these days. Instead of perfectionism and pressure, IDEO deems a culture in which close teamwork, prototypical work (things do not have to be perfect in their first iteration, can evolve and develop), error tolerancy and more fun are the key principles. While there is certainly more to a successful innovation company, this is certainly an approach favorable by many employees.

• Franz Hölzl demonstrated how Kaindl was able to offer a totally new way to produce wooden flooring, printed with individual patterns and colors, in great looking quality. Because of their production technology and business model, they can deliver a much more customized product at a significantly lower price.

• Wolfgang Gruel finally brought up the question if/why it is necessary that privately owned cars are often used in a really inefficient way, standing in the driveway most of the time and usually being too large for most of the time they are used. Daimler has been working on models to counter this development by employing car sharing, car pooling and affordable renting models. Nothing revolutionary new, you will say, but this time it is being done large-scale, by an international company, and not your small start-up next door. It will be interesting to observe whether Daimler can actually change something about the status quo or if the highly valued status symbol "car" will remain untouched by the means of sheer efficiency.

 

Some captures of our speakers. Click to enlarge!

Next: the social media panel, moderated by Paul Blazek: For all those planning to integrate social media into their PR strategy as well, talks by Martina Partl and Clarissa Streichsbier of cyLEDGE were as insightful as Catharina van Delden's summary of her company innosabi's (unserAller, anybody?) work. Renate Gruber gave the finishing presentation about how her venture CupCakes made its way from a traditional food company onto the MC market:

• Partl and Streichsbier pointed out that, while social media in regards to mass customization was nothing new anymore, the combination of social media and open innovation are a perfect match. This is certainly true in so far as open innovation per definition relies on participation and hence any media that is suited to increase awareness is potentially supportive for any OI initiative.
  
  Interestingly they chose Facebook as an example for a customizable information source. The important role of facebook as a customer relationship tool was stressed by all speakers in this panel. Certainly will be interesting to see if/how companies think of now ways to even better employ the platform for their needs. 

During the lunch break, there was time to check the 20+ exhibitors. Some had even set up live demonstrations of their product offers, like Pasterie, supporting us with freshly made pasta or CowCrowd, demoing their lovely wooden pendants, individualized on-location with your own image and/or custom text.

Next: The start-up panel, hosted by MC-blogging colleague Heiko Vogelgesang (egoo.de). Here, Sabine Beck gave an amazing presentation about how her jewlery business Amoonic manages to mix pre-configured and individually customized rings and more in a great portfolio that every manager dreams about: produced entirely on demand, without any significant need for storage space or the risk of wasting materials.

Interestingly, their configurator is not even visible if you enter their website. At first (and actually second) glance you will not notice anything hinting at the possibility to customize a ring. The configuration options do become visible, however, once you have decided upon one of the preconfigured designs. These can then be individualized using a wide variety of options. Possible combinations of gold, silver and gems of all kinds range from 150 to 2.5 million Euro. Certainly something in this for everybody.

However, from my own testing I found it hard to even find out that you can individualize the rings. You have to actually select one before a respective button appears and that could be a serious usability drawback in my opinion as many potential customers might not even recognize the potential of the store. It does, however, explain why about 40% of their sales are actually preconfigured, non-customized rings. Anyways though, with the average customer leaving between 400-500 Euro in their shop, the concept will certainly be profitable - especially since there are very low fix costs.

Next up was Stickvogel, a promissing start-up which specialized in embroiding and etching all kinds of motives into all kinds of goods. Lately they teamed up with major retailer Butlers, offering custom stitching to customers in Butlers' shops. This B2B customization service concept will certainly be exciting to follow over the (hopefully) next years.

Closing presentation of this panel was helt by Carina Schichl and Tanja Sieder, representing their business for unique custom travel guides, Nectar&Pulse, based on insider tips by what they call "soulmates" rather than generalized all-round information. Locals give their best tips for tourists which are then, upon checking, transformed into nicely layouted guides. While this is certainly an interesting idea per se, the issue I see with it is that the product might not be easy to market. As Schichl and Sieder pointed out, their target group originally were younger people. Instead, most of their customers are 30+. While their choice of age clustering is certainly debatable (and lead to one of the mentioned running gags of this conference), this raises the question: do they actually have the right product for the right market? If their average customer's age is above what they expected, they would likely be well advised to adapt to a different kind of information and layout which fits the needs of this target group better.

Next up was the retail panel. Moderator Jochen Krisch (excitingcommerce) did an outstanding job leading through an exciting lineup of big names: Former Bundesliga-athlete Sven Renz showed how his product line of completely customized ski/sports shoes has blessed his company with a yearly growth of 20-50%. However, I expect there to be an even larger potential in this market, seeing how ErtlRenz still "only" sold 2400 pairs of shoe at their peak last year.

Some captures of the exhibition. Click to enlarge!

Claudia Kieserling, winner of this year's much-noticed Million-Dollar-Challenge by Zazzle, gave a short overview of individual shoe manufacturer selve, showing off some of the models availible to women around the world and giving some interesting insight upon questions from the audience. She especially stressed the importance of the customer's shopping experience, which should be more than just pushing a button and receiving a cardboard box.

A great final presenation in this block came from Max Kickinger. His soundbranding company is known for its work with some major companies like Porsche, Swarovski and many more. Commenting on a truly excellent video he explained how companies use clever sound branding to gain the consumers attention - often without him realizing to be guided towards the "right" shelve - and the checkout counter!

Following another networking break, the final panel of the day: The configurator panel, presented and moderated by Alexander Felfering of Graz University, had the technical side of customer integration covered.

Coffee-Break is over, back to the conference room, Alp-Style!

Andreas Falkner (SIEMENS) spoke about the challenges of complex product configuration, especially where multiple dependencies between customizable factors are to be respected (a good example why companies should reffer to an expert instead of just trying to headjump into the MC market).

Marc Herling of Lumo Graphics demonstrated how the use of 3D-configurators can be a blessing for the consumer who can imagine the to-buy product way better than it would be the case with just some images. With more advanced configurators, he says, the concept of WYSIWYG (What You See Is What You Get) will more and more be replaced by YGWYW - You [actually] Get What You Want.

On the other hand, developing a really well working, appealing 3D-configurator takes a lot more than the amount of work it costs to "just" shoot said product images. Hence, as with so many cases of exploiting new technological opportunities, its a balancing act and might often not be profitable for small companies.

HYVE's Volker Bilgram was up next. In his "Toolkits for Gamification" speech he explained how and why the aspect of playing - adding features that make the process of configuring/buying a product more fun than just an annoying act of shopping - can contribute to a retailer's sales figures. Again: If done correctly!

To complete this panel, Klaus Pilsl of IndiValue spoke about web based configurators and their part in the customer's shopping experience. His company is about to launch a major new "configurator as a (web) service" -- something that has been tried for many years, but now finally may become true.

My personal conclusions of this year's MC2012:

 (1) MC has great potential to significantly improve a company's sales figures and customer brand loyalty. However, to make it work successfully, more is needed than just to put up a fancy-looking configurator and then wait for clients.

Especially the dialog with the (potential) client is and will be even more important in the future, as more and more companies employ easily accessable social platforms like Facebook to communicate with their crowd. And a lot of both promissing start-ups and established companies could profit immensely from experienced coaching since, as Christoph Ihl had pointed out at the very beginning, even the right choice of customization options (not to be confused with as many options as possible!) can make or break your MC business. 

(2) Mass Customization needs to be less outcome-driven and to be looked upon from a higher, more meta-perspective to develop it further. I believe we know a lot about nice and perhaps even profitable BtoC consumer products. But what about MC services that tackle some of our true global challenges?

(3) Finally, the German MC community really is a nice crowd of great individuals, very eager to collaborate, to share ideas and experiences, and to network!

Looking back on a fantastic conference I truly want to thank everybody who made this possible, may it be as a speaker or a guest, an exhibitor or supportive staff member. Special thanks do go to my dear co-hosts Paul Blazek and of course Dominik Walcher, who did an outstanding job organizing this large event with his team at Salzburg University!

(Most of) our speakers! Click to enlarge!

Open Service Innovation: BOSCH Launches OI Community Dedicated to Auto Mechanic Services

Bosch, one of the world's leading suppliers for (professional and personal) electronics and tools, has taken another interesting step in opening their innovation process. 

Bosch is not a new player in this field, already providing a general idea plattform where you can both submit solutions to specific problems and get the chance to send in and present your very own revolutionary idea for the next big product (enhancement). 

Now Bosch has taken things one step further. Seeing how automotive componentes and electronics are a major branch of their business they decided to go where problem-knowledge and improvement-ideas are most likely to be found: with the professional employer of Bosch's tool, the mechanic. 

In light of this realization, Bosch has recently launched the Bosch Open Innovation Plattform, specifically dedicated to professional garages and their employees. 

The concept of this community (which is so far in German language only) is twofold: The core-piece is a forum where professionals can discuss problems they may encounter during their work with Bosch's tools as well as exchange tips and tricks with colleagues from all over the nation (and the world, provided they understand German). Dedicated Bosch staff is also present on these forums so a direct interaction with company representatives is possible.

Next to this the plattform features an "Idea" section in which users (upon free registration) can submit their ideas about product enhancements and new solutions that they deem helpful/ necessary to better employ the company's products in "real life". Browsing through already submitted ideas is possible without registration. And of course you can submit ideas on how to improve the plattform itself (there even is an own section for this topic). 

A complementary "News" section is used by the company to transmit additional information deemed valuable for their target group. 

So far Bosch's concept seems to be rather successful with 400+ registered users and already 72 submitted ideas as of today, ranging from improved knowledge databases to concrete improvements of software provided by Bosch. It will be very interesting to observe where this communty of experts will go and which concrete outcomes it will produce. In any case a very good example of open innovation employment beyond "just" putting another idea website out there and wait. 

The Market for Mass Customization Today: Results from the Customization500. Part I: Company & Industry Structure

In his recent report about mass customization, Forrester's J.P. Gownder concluded that "mass customization is finally the future of products".  But how does the future of products look today?

In a joint project, Dominik Walcher and I looked together with our colleagues Thorsten Harzer, Christoph Ihl and Fabrizio Salvador into the practice of mass customization. Our multi-stage study, "The Customization 500", is the first global benchmarking study on mass customization and personalization in consumer e-commerce.

In a series of postings, I want to introduce some of the results from this research. You find all about the Customization 500 (short: MC500) study in a special section in my blog, www.mc-500.com

Sample construction for the Customization500 benchmark study

 

Given the scope of the mass customization market, we focused our analysis in the Customization500 on companies that sell directly to end consumers (B2C), using an online toolkit for user co-design that is applied to change the physical characteristics of the product in a dedicated manufacturing step (hence excluding products where customization is embedded in the product like a smartphone). In addition, we pragmatically focused on companies which we were able to analyze as they had a website in either English or German language.

In total, we found almost 1000 firms meeting these criteria (refer to www.configurator-database.com, a continuously updated list of mass customization companies). Following an extensive evaluation activity, we identified 500 companies that lead this field from a customer perspective (see here the full list). For each company, we gathered more than 100 data points. Data was collected by a group of trained expert evaluators who spent hours on each website.

 

 Figure 1: Selecting the data for the Customization 500

Also, each website was at least evaluated independently by three evaluators, and we took care to investigate all cases where the inter-rater reliability was not sufficient. The result of this exercise was a ranking of all companies, and allowed us to identify some of the leading offerings in the field. Figure 2 shows a summary picture of one of the companies included in the study.

 

Figure 2: A typical illustration of the overall score sheet of a company included in the Customization 500 (to get access to  all 500 profiles included in the Customization500, you have to purchase the full market study).

 

Which are the dominating industries with mass customization offerings

 

Table 1 provides an overview of the categories where mass customization in BtoC online today is employed. We find some very crowded categories that dominate the market. As expected, the option to personalize items by applying a user design on a basic product by different forms of digital printing is leading the field (categories 1, 2 and 4). There also always seems to be room for another custom shirt business or personalized sticker / foil to decorate your smart phone. Interestingly, however, there also is a very large (and still growing) field of applications in the food and nutrition industry where mass customization is applied to customize taste and nutrition of food.

 

Table 1: Categories of mass customization application in the Customization500

Using customized products for the gift market is a growing, but still not over-crowded opportunity. Most vendors still see mass customization as a one-to-one business, providing a custom product for the buyer (hence, also the dominance of me, my, mein etc. brand names).

However, some of the most successful mass customizers have realized that mass customization offers a perfect cure of a common problem: „Oh my good, [Name here]‘s birthday is coming up in a few days -- I need to rush to get an „original“ present now – but what?“ Take customized chocolate. Chocri and MyM&Ms, for example, are competing with gift cards and gift books, not with other candy items. They are not to be eaten - even if they taste very good - but to express that I have thought of you and really have spent some effort in getting this present done. For this, I am willing to pay a premium of 1,000 percent or more. As a provider, however, this means that a delivery time of 24 hours is a must, plus advice for easy gifting, wrapping, additional greeting cards etc. Here, we still see many untapped opportunities.

When looking further in the domains of mass customization application, we interestingly only found very few good configuration toolkits (for functional customization) in the field of consumer electronics and computers. Here, apparently the improvements of hardware apparently make it less useful to customize a product via toolkits before purchase, but allow users to customize the product during the usage stage with an embedded toolkit. It may be a sign of the shift in mass customization that the early pioneer, Dell, today almost offers no customization at all at its website. Well, there still is a configurator, but the choice options are very limited.

 

A closer look into company structures

 

For 120 of the 500 companies, we also could obtain extensive data by means of a company survey. Figure 3 shows our two-step data gathering approach.

Figure 3: The expert evaluation of the Customization 500 was followed by an extensive company survey of 120 companies

Descriptive statistics for the responding firms are given in Table 2, providing an enhanced insight into the company structures of the players in the mass customization market today.

• About 83% of the firms were founded exclusively with the purpose of mass customization, while 17% run their mass customization business in addition to their standard business. In general, most firms are rather young.
• Only 16% of the mass customization offerings are older than five years, indicating the long time lag from the description of the idea to the broader application of toolkits for co-design.
• 54% of the firms have less than five employees.
• Annual sales of the responding firms range from less than $100,000 to over $5 million in the last fiscal year, with the majority having sales of less than $1 million (83.5%).

These observations are consistent with our observation that the current dynamism in mass customization is driven primarily by innovative startups that have built their business models from the ground up and focus entirely on the promises of mass customization.

Table 2: Descriptive data from the company survey of responding firms

Clones dominate mass customization entrepreneurship

If you have a good idea for a custom product, it will be copied fast. This is one of the major conclusions we can draw from our observations of the market. The barrier to entry for many products is rather low, and once an interesting idea comes on the market, copycats follow quickly. This in general has not to be a bad thing, as also clones help to build the market, generate attention, and signal to press that this is a new category.

However, for the pioneers this means that they have to focus as much attention on branding and differentiating their business as upon building the processes and systems. Patents or other forms of IP do not provide much help here, thus, we conclude: As a pioneer, be fast, smart, and differentiate your business beyond the brand name and your core products.

Despite the many "me-too" offerings, surprisingly often the late followers are doing very well in their segments. We see three reasons here:

(1) Strong growth opportunities in every market: The late comers even in the most crowded categories (like custom men's shirts) enter into a market that still is not matured at all. Overall, there is not one category in consumer B2C where custom products have more than a few percent of the overall category (in most cases, they have a few tenth of a percent!). So there is still enough space for everyone.

(2) Market education: Pioneers in a category often have to spend a lot of attention to educate the market and just let consumers (and journalists) know that this kind of custom product is available. Latecomers can build on this generated market education.

(3) "Best of Breed" solutions: Latecomers often perform as best of class of established players, combining the design elements of pioneers, but also of mass customization sites in other categories.  A recent good example if getwear.com, which came late with another custom jeans offering, but has the best online configurator in its industry.

Mass customization platforms make the third wave of mass customization

But despite many clones, we also found a lot of innovative business models. Some of the best performing companies in the Customization500 are not stand-alone businesses that deal directly with consumers, but are mass customization platforms. These platforms can be regarded as the third stage of mass customization development.

The first wave of mass customization was driven by the early pioneers in the field in the early 1990s, motivated by the opportunities of new flexible manufacturing technology. Levi Strauss is a typical example from this time. Most of these offerings worked offline in a traditional retail environment. Also, first internet offerings coming of in 1995 and 1996, like CyberChocy or Creo Interactive, came up at this time. But in most markets, consumers were not ready yet.

The second wave came with the internet economy, around 1998-2002. Often, startups at that time just opened, as everybody could do it, not as customers needed it. But some great examples of mass customization survived, like NikeID (opening only because former Nike CEO Phil Knight wanted to have „something in the internet“, and so they selected mass customization as this promised to cause little channel conflicts with established retailers). In the following years, the internet-based mass customization offerings matured, and many more followed. It was the broader development of online configurators that made mass customization happening in a larger scale.

But a third wave of mass customization is happening now: It is driven by companies like Ponoko, Zazzle, Spreadshirt, Cafepress, Lulu, Gemvara, and many others, which offer design, manufacturing, and retail capacity to everyone. These platforms allow entrepreneurs to open a dedicated mass customization business at very low investment cost. On these platforms, people are not just customizing to fulfill their own needs, but to create (micro) niche markets for their peers. The platform providers have successfully combined the eBay idea of very easily selling things over the internet with the customization model of robust fulfillment processes. Here, we are just at the beginning and will see many more applications soon.

In an upcoming posting, we look more closer into the state of the practice of choice navigation (configuration) toolkits.

Context information

 

www.mc-500.com: More information on the Customization500 study and a list of the 500 companies included in the evaluation. 

 

http://bit.ly/mcpc-proceedings: The Proceedings of the last MCPC conference cover many dozens of case studies, latest research, 2500+ slides, and 15+ hours of video of the plenary presentations. As part of the proceedings, you also find three detailed PPT presentations using the Customization500 data in larger detail.

www.mc2012.org: Speaking German? Then participate at the next meeting of the German-speaking mass customization community (Salzburg, 29 June 2012) – and learn from some of the German champions of the Customization500 

Public Proceedings of the last MCPC Conference Published -- Access all Conference Presentations, Papers, Videos

Did you miss the MCPC 2011 conference? It was a terrific event, and we really got great feedback and comments on the conference.  Check here for some conference pictures!

Richard Henderson at UC Berkeley has been very helpful in creating the best conference documentation we ever had! On a special conference website, the full conference program  is  now available with links to the slides of the presentations, full papers (when available), and many full videos of the plenary and keynote presentations (for Day 1 and 2).

To access this rich source of information (I estimate that this are 2500+ slides, 1000+ pages of papers, and 15+ hours of video), either use the access code you got as a conference participant, or purchase* the full text proceedings:

Bridging Mass Customization & Open Innovation. Proceedings of the MCPC 2011 Conference -- including an access code to all presentations, papers, and videos. Edited by Henry Chesbrough and Frank Piller. Published by Lulu, Inc. (Raleigh, NC), 2012.

=>  Paperback version: ISBN: 978-1-4716-3023-1 (ca. 5 day delivery time)

=>  eBook version: ISBN: 978-1-4716-3086-6 (instant download)

For detailed information about presentations and speakers please also refer to the conference proceedings flyer!

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*Note: Why do we sell these proceedings and do not provide open access? First, this would have been unfair to all people participating at the conference and paying the full fee there. Second, organizing such a conference is a big effort and investment, and we still need the proceeds from this publication to cover our cost. Third, many authors and presenters do not want to have their papers and presentations openly on the web, but agreed to a controlled publication only.

The $1 Million Zazzle Innovation Challenge: What is your great idea for the next in mass customization?

Here is your perfect thing to do over the Christmas holidays:

Zazzle, a leading platform for quality custom products, is hosting their first "One Million-Dollar Innovation Challenge" to launch the development of the next, most innovative customization product or company.

This can be an idea for a new consumer product, but also one for an innovative service, health, business to business or whatever offering ... Feel free to bring mass customization to a new level!

The contest had been announced during the MCPC 2011 conference dinner. It is hosted in association with MIT's Smart Customization Group and UC Berkeley's Center for Corporate Innovation,

The Million-Dollar Innovation Challenge and prize is open to any person or company with an idea for a customizable product. Applicants must create a one-minute video, describing their product and explaining why their innovative concept is special and will contribute to the growing movement of mass customization. Applicants will be judged on innovation and economic viability.

The winner will gain access to Zazzle's world-class engineering team, which will support the winning project with software development, exclusive proprietary design tools and 3-D product visualization technologies. Additionally, Zazzle will fund the project with resources to develop a global product-marketing plan and launch the product to a worldwide audience of tens of millions of potential consumers. The winner will also receive mentorship from a veteran panel of potential investors and industry leaders, in addition to introductions to Zazzle's many brands and partners.

Zazzle will announce five semi-finalists on February 24, 2012. Academic experts, industry executives and active investors will help refine the concepts and plans for final evaluation and judge the presentations.

For more information, including objectives, application, rules and prize details, visit www.Zazzle.com/challenge.

#MCPC2011 Business Seminar: The Future of Mass Customization: The New Open Manufacturing System at #Materialise, #Ponoko and #ILT

On November 16th, the MCPC 2011 conference kicks off at the Marriot SFO Airport, San Francisco. In this series of postings, we introduce our speakers at the business seminars of the conference.

Additive Manufacturing and the opportunity for every consumer to turn any idea into a tangible product will change not just mass customization, but our dominant perspective of design and manufacturing. Learn the key facts from visionaries and business leaders in this field.

Wim Michiels, Executive Vice President, Materialise
The Industrial Revolution 2.0: Personalization through Additive Manufacturing

Every year, consumers’ interest in customization increases and market demand for personalization is creating new opportunities for entrepreneurs as well as entrepreneurs who have an existing offering that they now wish to tailor. With the technological advancements in Additive Manufacturing (AM), commonly known as 3D Printing, individuals have the ability to add a personal touch to the things they use and love most from cell phone cases, to shoes, to accessories for their cars and more.

David ten Have, CEO, Ponoko
Building the World's Easiest Making System

The future of products - using software to connect consumers, designers and making devices. Ponoko Inc is the creator of Personal Factory — the world’s most advanced platform for the mass creation of custom goods. Creative consumers can turn their design ideas into custom goods on demand using Ponoko's global network of making devices. This local production reduces the environmental impact of manufacturing. So far, more than 100,000 customer designed products have been made in 15 locations throughout the USA, Europe and Australasia - everything from 3D printed jewelry to laser-cut clocks to CNC routed furniture. Just as the Internet revolutionized the exchange of digital photos, music and movies, Ponoko pioneered the exchange of digital designs, reinventing the way consumer goods are designed, made and distributed. In a future when there is a making device in every home, school and business, Personal Factory is the software that makes it easy for everyone to create custom goods.

 Reinhard Poprawe, Director of Fraunhofer ILT, RWTH Aachen University
Laser Additive Manufacturing - The Key to the Next Generation of Economic Custom Production

 

 

 

 

Please find the complete program at the official MCPC 2011 website.

#MCPC2011 Business Seminar: How to Implement an MC Business at #Fluid, #JELD-WEN and #cyLEDGE

On November 16th, the MCPC 2011 conference kicks off at the Marriot SFO Airport, San Francisco. In this series of postings, we introduce our speakers at the business seminars of the conference.

Three rapid panel presentations will provide a lot of inspiration and food for thought for small group discussions with your peers.

Andrew Guldman, VP of Engineering, Fluid
Rob Jellesed, Director of Internet Sales, JELD-WEN Windows
Implementing Mass Customization in an Established Company

Fluid Inc. and JELD-WEN Doors & Windows have collaborated to create a compelling and richly interactive window and door customization experience online utilizing the latest in mass customization technology. During this presentation, you’ll hear how JELD-WEN leverages technologies to inform consumer purchase decisions and provide pass through lead generation to the sales funnel. With the use of immersive customization capabilities, potential customers can now interact with photo-realistic products, zoom, multiple views, and color changes. Further, you will learn how mass customization has gone social, with JELD-WEN’s unique implementation of social shopping tools that allow consumers to customize complex products with friends online and share their designs with others. And, last you’ll understand how mass customization has proven to augment JELD-WEN’s in-store door and window displays and offered the company a non-traditional return on investment.

Paul Blazek, CEO, cyLEDGE
Crucial Design Elements for Successful MC Configuration and Interaction

Successful mass customization of products and services requires interaction interfaces and tools that are shaped according to the customers' heterogeneous needs. The interface design of these configuration systems becomes a decisive criterion for customer satisfaction. Besides offering a good approach to the specific customization possibilities it should help to reduce customer doubts encountered during the design process, support emotional mechanisms and persuade to make a purchase. But how are relevant customer requirements identified? What are crucial design elements that trigger an efficient interaction between the customer and the manufacturer. Paul will answer these questions in form of some guidelines resulting from his analysis of customer structures and configurator approaches in various industries.

Please find the complete program at the official MCPC 2011 website.

#MCPC2011 Business Seminar: Setting Up a Mass Customization System at #Skyou, #Bene AG and #Selve

On November 16th, the MCPC 2011 conference kicks off at the Marriot SFO Airport, San Francisco. In this series of postings, we introduce our speakers at the business seminars of the conference.

This session will focus on the different business models that are behind the mass customization trend.

Brennan Mulligan, Founder & CEO, Skyou
What I Learned from Setting Up Five Successful MC Companies

While mass customization can be seen as an established business model we still see often little scale in its execution. At the same time, many new ventures and established businesses alike face the challenge to establish a supply chain fitted for mass customization – and everyone seems to go through the same learning cycle again. In his talk, Brennan Mulligan will propose a solution, reflecting on his experiences in leading many successful mass customization businesses since 1993.

Karl Berger, Vice President Engineering, Bene AG
Developing Solution Spaces for Mass Customization

Solution Space Development is one of the core activities of a successful mass customizer, clearly defining what it is going to offer and what it is not. The presentation will explain how Bene, a leading European office furniture provider, has developed a special approach to understand and serve the idiosyncratic needs of its customers, to develop the solution space. Karl Berger will show how different constraints work with each other, and how a of organizational layers helps to execute different solution spaces in the organization.

Claudia Kisserling, CEO, Selve
Illissa Howard, Founder, Milk and Honey Shoes
Establishing a Mass Customization Factory in China

This joint presentation is delivered by two experienced entrepreneurs in mass customization footwear, representing selve, the Germany-based category leader in the field, and Milk&Honey, a recent Hong Kong based startup. Claudia and Ilissa will first share insights into the market for customization in this field, discussing the Women’s fashion footwear market size and growth areas, global reach via online configurator, and the challenges and opportunities associated with that. Then, Claudia will share here experiences in setting up an own manufacturing plant in china, after seven years of manufacturing of high quality custom women's shoes in Italy. She will discuss the pros and cons, the do's and don'ts and her experiences of setting up and running a custom shoe factory in China.

Please find the complete program at the official MCPC 2011 website.

#MCPC2011 Business Seminar: Building & Growing a Mass Customization Business at #Rickshaw Bagworks and #You Bar

On November 16th, the MCPC 2011 conference kicks off at the Marriot SFO Airport, San Francisco. In this series of postings, we introduce our speakers at the business seminars of the conference.

In this panel, three experienced entrepreneurs in mass customization will share their best practices on what did work and what not.

Mark Dwight, Founder & CEO, Rickshaw Bagworks
Design for Mass Customization: Real World Approaches for Design and Manufacturing

Mass customization comes in many shapes and sizes. Mark Dwight employs mass customization techniques in his small messenger bag manufacturing company, Rickshaw Bagworks, based in San Francisco. Dwight founded Rickshaw specifically to pursue a strict build-to-order operational model, as opposed to the traditional build-to-stock practice common in the fashion industry. At Rickshaw, mass customization is the foundation of the product design and development process. All product platforms are based upon four key design principles: (1) Decouple function and fashion; (2) Isolate complex core functional elements in a common, mass-producible "chassis"; (3) Save product "personality" for the final assembly step; (4) Add optional functional upgrades and fashion elements from a collection of "bolt-on" accessories. Based upon this design methodology, Rickshaw produces a family of full-featured, customizable computer carrying briefcases and backpacks at very competitive prices in its San Francisco headquarters. The benefits of this strategy include: zero finished goods inventory, zero inventory risk, minimum SKU count, vastly reduced forecasting complexity, ability to outsource most of the labor intensive work while insourcing all of the customization, price/performance flexibility, and fast turnaround of highly custom orders.

Anthony Flynn, Founder & CEO, You Bar
You Bars: Profiting from the Mega-Trend of Food Customization

Detailing You Bar's journey from my mother's kitchen to an 8,200 square foot commercial warehouse, this presentation focuses on how the customer and company have become less polarized. Customization obliges the customer to become co-creator and innovator, necessitating a dialogue between customer and company which allows each to better satisfy the evolving needs of the other.

Speaker T.B.A., Please Check Conference Website for Details
Investing in the Customization Trend

Mass customization start-ups have become subject to some major interest of Venture Capital firms. In this presentation, a member of the VC communities share some insights on the market for mass customization from this perspective and why mass customization and co-creation are important drivers of successful future business models.

Please find the complete program at the official MCPC 2011 website.

#MCPC2011 Keynote Session: Setting an Agenda for Research & Innovation

On November 16th, the MCPC 2011 conference kicks off at the Marriot SFO Airport, San Francisco. In this series of postings, we introduce our speakers at the business seminars of the conference.

Discuss with your fellow participants your insights from the MCPC 2011 and close the conference with three forward-looking keynotes and a review by the conference chairs that will set the agenda until the next MCPC.

Vishal Gupta, Director Developer Network, Elsevier
Wither Scientific Publishing? Collaborative Innovation, Open Platforms and Personalized Workflow Solutions Has an Answer

With an exponential growth of scientific information and wider distribution of services and data sources; integrated and intelligent search and discovery become crucial to the success of researchers. This is not possible without partnering on a platform that provides the ability to integrate workflow solutions in a seamless way, allowing a more meaningful use of the content. At Elsevier we are trying to bring a paradigm shift in partnering with researcher and developer communities on open platforms to jointly develop innovative workflow tools that are embedded deeply in user’s workflow, personalized to suit the individual needs, and geared towards driving research outcomes.

Kent Larson, MIT Media Lab
Urbanization from a Perspective of Mass Customization and Open Innovation

This talk will provide a thought-provoking outlook by looking on urbanization from a mass customization perspective. It will propose a systems approach to creating new cities at four scales:

1. New Urban Strategies - parametric tools to create urban blocks with the optimal mix of housing, commercial, retail, and services and their related infrastructure.
2. Mobility-on-Demand - modular approach to assembling an ecosystem of mobility modes and new vehicles (like the CityCar)
3. Personalized Places of Living and Work - mass-customization strategies for high-performance urban housing
4. Proactive Technology - sensors, algorithms, and interfaces to proactively encourage energy conservation, healthy behaviors, and mobility choices.

Mitchell Tseng, Hong Kong University of Science and Technology
Embodying Innovation for Customer Value - Building Bridges Between Mass Customization and Open Innovation

In our knowledge economy, value comes from generating creative ideas and then embodying them in products for transactions. Mass Customization starts from finding out the customer value and then try to create the best combination of components that shape the physical products for customers to buy. On the hand, Open innovation invites creative idea from everyone, from partners, suppliers, customers and others to contribute for a defined purpose that is valuable. Either approach involves a critical step of transforming abstract idea to tangible products, connecting concept to physical world in order to achieve customer value. Although there are products that can be valuable in abstract forms or software, majority of products still relies physical embodiment. This presentation will like to address the interface between electronically moveable and immoveable. Some of the techniques that can be adapted to amplify the synergy between these two essential components will also be reviewed and discussed.

Please find the complete program at the official MCPC 2011 website.

#MCPC2011 Keynote Session: Finding the Next Opportunities in Mass Customization

On November 16th, the MCPC 2011 conference kicks off at the Marriot SFO Airport, San Francisco. In this series of postings, we introduce our speakers at the business seminars of the conference.

Learn from B. Joseph Pine's latest thoughts on the Virtual Multiverse and how it creates the next generation of experiences and customization, followed by a talk by an entrepreneur who puts Joe's thoughts into real life.

B. Joseph Pine II, Strategic Horizons
The Multiverse: Finding the Next Opportunities in Mass Customization

The physical world, bounded as it is by matter, space, and time, offers limited opportunities for value creation. With digital technology, however, the opportunities are limitless, for people can create anything they want with immaterial bits, in virtual places, without the constraints of linear time. As consumers increasingly experience the world through their digital gadgets, companies still only scratch the surface of technology-infused experiences. Joseph Pine will show you how to create new value for your customers with personalized offerings that fuse the real and the virtual. Digital technology offers limitless opportunities — you really can create anything you want — but real-world experiences have a richness that virtual ones do not. So how can you use the best of both? How do you make sense of such infinite possibility? What kinds of experiences can you create? Which ones should you offer?

André Wolper, Founder & CEO, embodee
Visualization as an Enabler of Mass Customization: An Apparel Story

Apparel shoppers, especially those customizing a garment, expect to vividly and accurately “see” and even experience what a garment looks like on them. Accurate, lifelike, 360degree visualizations can provide the means, delivering inspiration and confidence for an online purchase. embodee, a start-up, adapting technologies from movie visual effects, has built the first scalable, easy-to-use platform that delivers such visualization capabilities. Two leading global brands have launched interactive systems built on the embodee platform. Hurley customers have been able to see themselves in a range of denim styles and sizes optimized for them since 2010. And now, the world's leading sports apparel and equipment brand enables athletes and coaches to see their team uniforms evolve in compellingly realistic 3D as they tweak style elements, text, fonts, stitch patterns and colors. Customer feedback, sales volumes and a steep drop in return rates are proof points that compelling visualization can propel customization and online apparel commerce forward.

Please find the complete program at the official MCPC 2011 website.

#MCPC2011 Keynote Session: What is the State of the Art of Research & Practice in Mass Customization & Open Innovation?

On November 16th, the MCPC 2011 conference kicks off at the Marriot SFO Airport, San Francisco. In this series of postings, we introduce our speakers at the business seminars of the conference.

Two talks providing a review of these fields to create a common understanding of the latest research and insights for practice. 

Joel West, Keck Graduate Institute of Applied Life Sciences
Open Innovation - State of the Art of Research and Practice

 

 

 

 

 

Frank T. Piller, RWTH Aachen & MIT Smart Customization Group
Fabrizio Salvador, IE Business School
A Matter of Balance - Building the Successful Mass Customization Enterprise

What makes a successful mass customization enterprise? Previous research has identified three core capabilities that allow companies to profit from mass customization: robust process design, choice navigation and solution space definition. So far, however, we did not have large-sample evidence of the impact of these capabilities on market, operational and financial performance of a company. This presentation will report the latest results of an international study of 130 mass customization consumer companies operating both in Europe and in the U.S. as part of the ongoing MC500 research initiative. We find that these capabilities indeed are important for the performance of the sampled companies. To our surprise, however, focusing on one capability alone does not necessarily lead to superior market, operational and financial performance. Instead, performance differentials are explained in terms of the simultaneous presence of the three capabilities. This means that managers building a mass customization venture have to get a balanced view of investing in the three capabilities. Using empirical data and case studies, our presentation will identify implications of our study for entrepreneurs, managers in established companies, investors and VCs, and for future research.

Please find the complete program at the official MCPC 2011 website.

#MCPC2011 Business Seminar: Profiting from open Innovation and Co-Creation at #Nine Sigma

On November 16th, the MCPC 2011 conference kicks off at the Marriot SFO Airport, San Francisco. In this series of postings, we introduce our speakers at the business seminars of the conference.

A final opportunity to discuss with your peers how to put the ideas from this day into practice, kicked-off by a presentation of a key enabler of open innovation.

Andy Zynga, CEO, Nine Sigma
Making Open Innovation Work 

In his presentation, Andy Zynga will share his experiences from more than 2000 projects in open innovation at Nine Sigma. He will comment on the obstacles, tools & opportunities of open innovation, presenting recent results from a comprehensive survey on open innovation practices in global firms. He will then discuss some of the measures executives can take to tackle the challenges of profiting from open innovation. His presentation will close with a few observations to stimulate the discussion at the following round table presentation with your peers.

Followed by a round table discussion.

Please find the complete program at the official MCPC 2011 website.

#MCPC2011 Business Seminar: The Tools for Open Innovation at #TechShop, #Idea Couture and #Ford

On November 16th, the MCPC 2011 conference kicks off at the Marriot SFO Airport, San Francisco. In this series of postings, we introduce our speakers at the business seminars of the conference.

Implementing open innovation is not always easy. This session will provide a focused few on approaches and tools to utilize the benefits of open innovation.

Mark Hatch, CEO, TechShop
BOOM! An innovation Explosion: How to Change the World Through Open Access to the Tools of Invention 

The presentation will share how TechShop changed the world through open access to the tools of invention… and provide a guide on practical ways to leverage this platform for your organization. Open source, the cloud, ubiquitous connectivity, search and find efficiencies, and powerful cheap processing have been driving the rapid acceleration of innovation in any field touched by computers and communication media. Now, with the advance of inexpensive access to extremely cheap, powerful and easy to use tools, the invention of physical products has never been easier, cheaper, or speedier… particularly if you have a $100 a month membership to TechShop. Mark presents five technologies prototyped and built at TechShop that have already started to change our world. He reviews the drivers of this new capability and then explores how you can leverage this new service.

Leah Hunter, Global Head of Insights and Innovation, Idea Couture
Making Co-Creation Strategic

The concepts of open innovation, mass customization and co-creation are often used interchangeably and raise new questions and challenges that highlight the need to understand the variables in their design of mechanisms, business processes and the economic implications for organizations. Leah Hunter will introduce the consumer co-creation value chain, a model that is used to analyze and understand the mechanics of co-creation. She will further illustrate its value by sharing Idea Couture's experiences in designing co-creation strategies. What are the differences between crowd wisdom versus collective intelligence; crowdsourcing ecosystems and market co-creation; motivations and creative incentive design; task characteristics and task design? Leah's presentation will align the strategic intent of the business to a co-creation strategy.

TJ Giuli, Technical Expert Ford Research and Advanced Engineering, Ford Motor Company
Leveraging Open Innovation to Create a Customized Driving Experience

Ford Motor Company, a global automotive industry leader based in Dearborn,Mich., manufactures or distributes automobiles across six continents. With
about 176,000 employees and about 80 plants worldwide, the company's automotive brands include Ford, Lincoln, and Mercury. Recently, Ford opens its research doors to external contributors, tapping into minds at universities and other organizations outside the automotive industry for the next best idea for, e.g., in-vehicle connectivity and infotronics. One of Dr. Giuli's latest open innovation projects is American Journey 2.0, which paired up Ford and University of Michigan students who were challenged to build a new class of social networking apps for the vehicle during a 12-week course. The winning app made its way into a Ford Fiesta for the ultimate test drive to California for the 2010 Maker Faire, the largest do-it-yourself event of its kind. In his presentaton, Dr. Giuli will share this and other experiences in open innovation at Ford.

Please find the complete program at the official MCPC 2011 website.

#MCPC2011 Business Seminar: Using Social Media for Customer Co-Creation at #Quirky and #IndieGoGo

On November 16th, the MCPC 2011 conference kicks off at the Marriot SFO Airport, San Francisco. In this series of postings, we introduce our speakers at the business seminars of the conference.

Social media is becoming a core platform for new product & new service development. Learn from the pioneers in this field and discuss how these approaches could work in your company.

John Jacobsen, Head of Engineering, Quirky
 Social Product Development - Launching a Great New Product Every Few Days

Quirky is a social product development company that brings two brand new consumer products to market each week through its online collaborative platform. Quirky’s community of almost 90,000 members weigh in on every aspect of product development from research to industrial design to branding; quirky shares its revenue with the influencers who help bring each product to life. Since its launch in 2009, Quirky has collaboratively developed more than 120 new products. Top influencers are making tens of thousands of dollars. National retail partnerships include Bed, Bath & Beyond and HSN, with its own show on the HSN Channel each month. Quirky will also have its own show premiering on The Sundance Channel on August 30th. The show, called Quirky, is about the powerful process of making invention accessible. Each one-hour episode will demonstrate how Quirky has successfully re-engineered and democratized the business of innovation.

Erica Labovitz, Director of Marketing, IndieGoGo
Experiences with Crowdfunding in the Movie Industry

 

 

 

 

 

 

Please find the complete program at the official MCPC 2011 website.

#MCPC2011 Business Seminar: Winning with Open Innovation at #Procter&Gamble, #Eyeka and #Clorox

On November 16th, the MCPC 2011 conference kicks off at the Marriot SFO Airport, San Francisco. In this series of postings, we introduce our speakers at the business seminars of the conference.

The business seminar today will focus on open innovation. We will start the day by two inspirational keynotes on companies that really "got it" in open innovation and co-creation.

Ashish Chatterjee, Director Connect+Develop, Procter & Gamble
Celebrating a Decade of Open Innovation at P&G - Key Lessons

With every celebration comes reflection. What’s worked, what hasn’t? What can be better moving forward? Such is the case for Procter & Gamble, now marking 10 years of Connect+Develop℠, the Company’s branded approach to open innovation. In the true spirit of collaboration, P&G shares both the good and the bad they’ve experienced along the way. From the first deal, to some of the biggest, to some that simply never were, or never should have been, P&G also will discuss new open innovation frontiers and challenges on the road ahead.

Suzan Briganti, US Rep., Eyeka S.A. & CEO, Totem Brand Strategy
Edward Rinker, Research Fellow, Clorox
Co-Creation Among the Fortune 500

In many ways, co-creation has been more of a European phenomenon. The (according to Forrester Research) top three co-creation platforms (Eyeka, Jovoto and Hyve) are based in Europe and until fairly recently, many US companies have hesitated to adopt the methodology. In this presentation, Eyeka’s US Representative and their first Bay Area client, Clorox, will discuss their views on the state of co-creation among the US Fortune 500. They will reveal why companies are turning to co-creation, the internal resistance they sometimes face, and how they overcome it to use this unconventional new methodology. Their remarks will touch on some ways in which co-creation differs from traditional market research and customer insights.

Please find the complete program at the official MCPC 2011 website.

#MCPC2011 Opening Presentations: Advanced Mass Customization Thinking at #Deloitte and #Gemvara

On November 16th, the MCPC 2011 conference kicks off at the Marriot SFO Airport, San Francisco. In this series of postings, we introduce our speakers at the business seminars of the conference.

The MCPC 2011 Business Seminar kicks-off with an introduction by the conference chairs and two corporate leaders that have pushed mass customization to a new level.

Frank T. Piller (RWTH Aachen) & Henry Chesbrough (UC Berkeley)
Bridging Mass Customization & Open Innovation: A Framework

The MCPC 2011 event is an experiment: Can we advance our knowledge of innovation effectively by linking mass customization and personalization with open innovation? While developed separately and build on different theoretical and conceptual backgrounds, we believe that mass customization and open innovation are closely linked and can benefit from a broader exchange between both schools of thought. In this brief opening comment, the two conference co-chairs will provide an overview and introduction into the themes of the conference.

Cathy Benko, Vice Chairman, Deloitte U.S. Firms
Mass Career Customization: From Corporate Ladder to Corporate Lattice

Centered on the insight that today's career is no longer a straight climb up the corporate ladder, but rather a combination journey of climbs, lateral moves, and planned descents, Mass Career Customization (MCC) provides a new model for how careers are built and talent is developed. Borrowing from consumer products trend away from one-size-fits-all to mass product customization, this new approach builds employee loyalty and provides for dynamic alignment between individual and corporate needs. The MCC framework has four dimensions: (1) Pace; (2) Workload; (3) Location/Schedule; and (4) Role. Employees and their managers collaborate to find the right fit across those dimensions at any point in time and over time, as long as the choices work for both the individual and the business.

Matt Lauzon, Founder & CEO, Gemvara
Establishing Mass Customization in a High-End Luxury Market

Realizing a niche in the jewelry industry at the intersection of e-commerce and mass customization, Matt Lauzon, co-founder of online custom jewelry site Gemvara.com, and one of the youngest execs under age 30 to raise multi-millions in funding (over $25M), will discuss his “me-Commerce” vision for the future of online shopping and share insight as to why over 40% of his customers have never bought a piece of jewelry online before buying on Gemvara.com. Taking notes from how Dell transformed PC customization, Zappos revolutionized online customer service and Netflix used targeted data to meet customer needs, Matt will explain the key findings when it comes to launching an online shopping experience, discuss how virtual inventory could benefit all e-tailers and share his thoughts on achieving success within the “emotional web.”

Please find the complete program at the official MCPC 2011 website.

#MCPC2011 Program Highlights: MC Manufacturing and Supply Chain Management

In a series of postings, we present some of the program highligths of the MCPC 2011 conference. The following is just one of more than 50 sessions we will host on Nov 16-19 in San Francisco, CA.

Successful Mass Customization not only depends on the design and proper employment of the consumer backend (configurator). Of equal importance is the organizational structure "behind the scenes" that allows a company to actually keep the promiss of individual production while still remaining profitable. In this session we will hear expert advices about the key aspects of successful MC Manufacturing and Supply Chain Management.

 

Sessions 7.4 (Nov 19): MC Manufacturing and Supply Chain Management

Modeling & Simulation of MP-MC Apparel Manufacturing

Apparel companies that initiate Mass-Customization (MC) must identify a suitable manufacturing (assembly) strategy, which is vital for their success. Most companies that produce apparel using Mass Production (MP) systems, are interested in investigating if the existing systems can be used to implement a MC strategy.

In this part Muditha Senanayake (Cal Poly Pomona) and Trevor Little (North Carolina State University) will explore the opportunity to mix MP and MC using computer modeling and simulation. Based on varying sizes of bundles and varying frequencies of products tested on simulated production lines they will present their observations of the production system performance. As a result they will present possible implementations of mix manufacturing strategy and its limitations.

Using a Simulation-Based Framework to Design Supply Chain Offering Mass Customization in the UAE

Mass Customization has emerged as a successful business model that can address the contemporary challenges of global markets. Although companies have adopted various levels of MC, a major challenge for firms is to efficiently design their supply chain in function of their MC offers, which also needs to support the involvement of customers in the innovation process. Marc Poulin will present a work in progress of a simulation framework that enables UAE firms to design supply chains that offer MC products and services. Using the leading edge simulation software SIMIO he will model and simulate supply chain models in the UAE.

Methodology for Implementing the Right Supply Chain for Mass Customization

In this presentation Luigi Battezzati (University of Milan) will focus on the definition of preliminary implementation guidelines in order to define the proper supply chain for different products (emotional, functional), manufactured by different companies (mass or handcraft producer), in compliance with different winning criteria impacting on critical areas for Mass Customization

Listen to the full content of these talks at the MCPC 2011, Marriot SFO Airport, San Francisco, Nov 16-19, 2011:

- Conference Website and Registration

- All info here in one compact MCPC flyer

- Conference hotel and travel (rooms fill quickly, book now!)

- All posts about the conference in my blog

Full program of #MCPC2011 published: More than 150 Presentations on Mass Customization, Customer Co-Creation & Open Innovation

  

 Finally, the full conference program of the MCPC has been released. There still are a few things to update and exchange, but 95% of the program are fixed!

In addition to hundreds of CEOs, Founders, Directors, and Practice Leaders of the companies that apply and support mass customization, customer co-creation and open innovation successfully, many of the world's leading researchers in these areas will present latest findings in an accessible way.

The interactive conference format of the MCPC 2011, supported by the proximity to the Silicon Valley / Bay Area entrepreneurship and investment community, allows for deep interaction and networking between the participants. There are more than 150 presentations, panels, or workgroups on the program!

Join us in a lively exchange on best practices, case studies, success factors and open business models that focus on the top management and leadership issues and / or provide deep insights into specific design parameters of the tools and technologies behind open co-creation and mass customization.

Some selected topics of presentations and panels at the MCPC include:

- Setting up a mass customization business model;
- The market for mass customization;
- Defining a customer co-creation initiative that works;
- Managing customer-centric supply chains and fulfillment:
- Design elements of successful configuration toolkits;
- Metrics for open innovation;
- Implementing open innovation in an R&D organization;
- Learning from failures of the early pioneers;
- Getting VC investments for business models for MCP;
- Optimal incentives for internal and external participants;
- Getting corporate buy-in for customer co-design and OI;
- And much more!!

Before the main conference (Nov 18-19), a special business seminar provides executable frameworks for the management of mass customization and open innovation and a focused view on future topics.

Please register as soon as possible, as seats are limited and many are already taken! The conference hotel is conveniently located between San Francisco Airport (SFO) and Silicon Valley and allows for very efficient travel.

We hope to meet you in San Francisco in late Nov !

Frank Piller and Henry Chesbrough

MCPC 2011 Co-Chairs 

http://www.mcpc2011.com | MCPC2011 Full Program

 

#MCPC2011 Program Highlight: Open Innovation Capabilities

 

In a series of postings, we present some of the program highligths of the MCPC 2011 conference. The following is just one of more than 50 sessions we will host on Nov 16-19 in San Francisco, CA.

Open Innovation has developed far beyond the state of a niche-method practiced only by a selective few entrepreneurs. With the evolution of the internet to "Web 2.0" the chances offered by employing this global meeting place to integrate consumers into the innovation process has been understood long since by large and small companies alike. Still the capabilities of Open Innovation are not been used to their fullest by many who could profit from its broader use. In sessions 6.4 and 7.4 we will take a look at what is possible and how it can be achieved.

Sessions 6.4 & 7.4 (Nov 19): Open Innovation Capabilities

Paradigm Shift of Innovation Processes

The phenomena MC, OI and OSI do not only stand for interactive business models but also represent the radical opening of the value creation chain on an unprecedented scale.
Doris Blutner (RWTH Aachen University) will explain how a generalized inclusion for people to participate in the designing process develops into a new paradigm of the genesis of innovations, which equals a discovery procedure, which – through its collective action – stirs up the economic competition, and whose products cannot be attributed to national origin any longer.

Management of Uncertainty: The Key for Open Innovation

Transformation in modern society is typified as a changeover from uncomplicated/simple/first modernity to reflexive/automatic/late modernity. Reflexive modernization is based on the idea of a risk society, forced individualization and multidimensional globalization which deeply manipulates the context for open innovation. Since managing uncertainty can be regarded as a core practice of successful innovation management, Robert Freund and Zoran Anisic will discuss open innovation from the second modernity point of view and shows new ways of dealing with uncertainty.

Emerging Capabilities of Open Innovation in Networks

In this presentation Astrid Lassen, Alexia Jacobsen, Sören Poulsen, Sören Wandahl and Henrik Sörensen (Aalborg University) will particularly focus on determining how to engage a willing but largely inexperienced network of companies in user-driven innovation. They will identify essential antecedent of user driven innovation and provide insights into how to stimulate and develop emerging capabilities of open innovation, especially in an industrial context.

Implementing Open Innovation: Groundwork on a Strategic Transformation Model for Multinational Companies

In this part Norman Mueller (Anglia Ruskin University) will aim to extend the understanding about the interface of organizational behavior/development and Open Innovation, specifically about how OI is implemented and adopted within multinational companies (MNCs). He will especially focus on human interactions in connection with change processes, taking an aggregated view on inter-dependencies between departments within MNCs.

On Becoming a User-Driven Firm: Slow-Cooked for Extra Goodness?

Mika Westerlund (Aalto University) and Seppo Leminen (Laurea University of Applied Sciences) will reveal what it takes for established firms to shift from traditional provider-driven innovators into modern-day user-driven co-creators. Based on firms’ experiences they identified four distinct phases of becoming a user-driven firm which they will describe and analyze. Their presentation will be completed by a discussion on organizational challenges that a firm faces on the sometimes long way towards an open organization.

Trust is Good, Control is Better: An Open Innovation-Controlling for SME

Due to a lack of respective research Small and Medium Enterprises currently have no instrument helping them to decide whether they should adopt Open Innovation.
Jessica Koch, Eckart Hauck and Ingrid Isenhardt (RWTH Aachen University) will present their research on the topic of the efficiency of OI for SMEs and talk about the development of an instrument that can help SMEs to decided whether employing OI is worthwhile or not.

Listen to the full content of these talks at the MCPC 2011, Marriot SFO Airport, San Francisco, Nov 16-19, 2011:

- Conference Website and Registration

- All info here in one compact MCPC flyer

- Conference hotel and travel (rooms fill quickly, book now!)

- All posts about the conference in my blog

#MCPC2011 Program Highlights: Rapid Innovation and Manufacturing in an International Production Enviroment

 

In a series of postings, we present some of the program highligths of the MCPC 2011 conference. The following is just one of more than 50 sessions we will host on Nov 16-19 in San Francisco, CA.

In a world of global markets and constant technical innovation one has to live up to the challenge of not only surviving on the individual markets but to out-innovate any competition at the highest pace possible. It goes without saying that for producing companies, production speed is a key competency. In sessions 6.3 & 7.3 we will take a look at expert techniques to accomplish this tough yet vital mission. 

Sessions 6.3 & 7.3 (Nov 19): Rapid Innovation and Manufacturing in an International Production Enviroment

Rapid Response Manufacturing in RIO South Texas Region

Opening Session 6.3, Miguel Gonzalez, Jianzhi Li and Douglas Timmer (University of Texas-Pan American) will speak about their experiences with rapid response manufacturing techniques in their home region of South Texas.

Experiences in Disburse Engineering Design Education Targeted on Rapid Innovation & Manufacturing

In this part Jianzhi Li, John Lloyd, Miguel Gonzalez, Douglas Timmer (University of Texas-Pan American) will share some of their experiences on the topic of disburse engineering design education with a special focus on its application in rapid innovation and manufacturing.

Information Technology Suitability Index for Mass Customization

In their presentation, Douglas Timmer and Miguel Gonzalez ( University of Texas-Pan American) will discuss the suitability of information technology in regards of mass customization.

Case Studies of Rapid Response Manufacturing in an International Production System

As a response to intensified competition, changing customer needs and greatly shortened product life cycles, ALPS as a global parts supplier to major automakers has been implementing rapid response manufacturing and mass customization technologies in order to capture and satisfy customer requirements in a timely and efficient manner.

In their presentation, Edi Sanjoto (ALPS Automotive) and Miguel Gonzalez (University of Texas-Pan American) will introduce best practices and strategies which allowed ALPS to connect with customers effectively and to quickly identify product variations. Furthermore they will compare different configurations of manufacturing lines with mass customization in mind, based on which they will give their recommendations for rapid response manufacturing strategies.

Reconfigurable Strategies to Hammer Open Innovation Concepts into the Mass Customized Automobile Manufacturing

The manufacturing industry in general and the automotive industry in particular is distinguished by rapid globalization, high mass customization, regionalization, value chain restructuring and reduced product as well as innovation life cycles. This in turn has compelled the automotive manufacturers to open up their innovation process to better address the customer needs readily by exploiting efficient outsourcing strategies.

Sarfraz Minhas, Ulrich Berger and Christiane Hipp (Brandenburgische Technische Universität Cottbus) will discuss the need for reconfigurable approaches in planning as well as in control to address mass- customization-induced complexities under the umbrella of open innovation. A reconfigurable production control will be proposed in the body-in-white production, encompassing the configuration of specific setups to enable co-development in a distributed production environment, exploiting ICT technologies to produce mass customized products.

Innovations in Mechatronic Products and Mass Customization

Mass Customization has been recognized as a successful strategy in the design and development of products tailored to customer needs. Global competition demands new products with added functionalities, as in the case of mechatronic products.  These products are becoming more and more important as a product type and new inventions have resulted in drastic changes in design and development of mechatronic products, both standalone and enhancing conventional mechanical systems.

In this part, Tufail Habib, Kaj Jörgensen and Kjeld Nielsen (Aalborg University) will present the particular structure and properties of mechatronic products compared to conventional mechanical systems.Following that they will give an overview of typical changes regarding functionalities from mechanical products towards mechatronic products.

Utilising Mass Customisation Methods for Modular ManufacturingSystem Design

In order to operate under and take advantage of the specific dynamics of today's markets, manufacturing processes have to be robust to product changes – a contradiction to traditional manufacturing systems developed as dedicated engineer-to-order solutions, tailored to production of a specific product or a limited product assortment. In response, modular manufacturing concepts are evolving, designed with the needed responsiveness in mind, being the manufacturing paradigm of Mass Customisation.

Research focus has been on the basic principles and enabling technologies, while modular architectures and system design have received less attention. A potential to fill these gaps by applying selected design theories and methods of MC has been identified. Based on a communality analysis between these theories/methods and the modular manufacturing approach, Steffen Joergensen, Alexia Jacobsen, Kjeld Nielsen, Ole Madsen and Kaj Jörgensen (Aalborg University) will discuss and evaluate the potentials and show possible obstacles of application.

Listen to the full content of these talks at the MCPC 2011, Marriot SFO Airport, San Francisco, Nov 16-19, 2011:

- Conference Website and Registration

- All info here in one compact MCPC flyer

- Conference hotel and travel (rooms fill quickly, book now!)

- All posts about the conference in my blog

#MCPC2011 program highlights - Customer Co-Creation for Ideation

In a series of postings, we present some of the program highligths of the MCPC 2011 conference. The following is just one of more than 50 sessions we will host on Nov 16-19 in San Francisco, CA.

One of the main topics of the MCPC 2011 will be co-creation with customes and users. We are glad that we could win a number of high profile researchers to present their latest studies on customer co-creation. This session focuses on co-creation for idea generation.  

Session 1.3 (Nov 18): Customer Co-Creation for Ideation

The Future of Crowdsourcing - From Idea Contests to MASSive Ideation

Johann Füller(CEO of HYVE), Katja Hutter and Julia Hautz (Insbruck University) provide an overview of crowd sourcing practices for the future and introduces the “MASSive Ideation” approach which supports generating and evaluating numerous ideas and allows for the further elaboration of top-ranked ideas into a handful of the most promising concepts. This is done in collaboration with a large and geographically scattered crowd. The software-based approach captures the advantages of both real-life innovation workshops and virtual online interaction to facilitate the generation of elaborated product or service concepts.

Coopetition in Virtual Communities: An Interdisciplinary Approach

Virtual communities provide an essential outlet for customer co-creation. Vera Blaszevic, Alexandra Gatzweiler and Evalotte Lindgens (RWTH Aachen University) and Sophie Einwächter (Bochum University) talk about how to use the concept of coopetition to study cooperative and competitive mechanisms in virtual customer communities and their effect on individual and community productivity. Learn how coopetition increases productivity and why it is important for the long-term survival of the community.

Value in Co-Created Content Production in Magazine Publishing: Case Study of Co-Creation in Three Scandinavian Magazine Brands

This talk taps into the evolving phenomenon of co-creation in publishing industry. Tanja Aitamurto (Stanford University) and Saara Könkkölä (Aalto University) identify the value emerging from content co-creation in three Scandinavian magazines in a shared content production process in which customers and editorial teams co-create a magazine. The study shares results of the business value of co-creation and its impact on reader-brand relationship,  increased revenue, more personalized products and other benefits.

The Relevance of Customer Co-Creation of Value for Service Companies: Does Co-Creation enhance Revenues and Satisfaction?

Ursula Grissemann and Nicola Stokburger-Sauer (Insbruck University) assess the effects of co-creation on customer satisfaction and service expenditures, highlight the effects of company support for the customer to co-create and analyze the consequences of customers’ satisfaction with their co-creation performance. They found that service expenditures increase the more customers are integrated into the service development process. Likewise, co-creation was found to positively affect customer satisfaction with the service company.

Listen to the full content of these talks at the MCPC 2011, Marriot SFO Airport, San Francisco, Nov 16-19, 2011:

- Conference Website and Registration (reducted rates until Sept 30)

- All info here in one compact MCPC flyer

- Conference hotel and travel (rooms fill quickly, book now!)

- All posts about the conference in my blog

Interview: Bruce Kasanoff of NowPossible.com on "Personal=Smarter"

Bruce Kasanoff is founder and editor of NowPossible.com, which "covers the leading edge of personalization". Bruce wrote the one of the first business books in our domain of mass customization & personalization, "Making It Personal" (2002). He was head of training, research and development for Peppers and Rogers Group, a leading personalization consultancy. The Chartered Institute of Marketing cited Bruce among their inaugural listing of the 50 most influential thinkers in marketing and business today. He works with innovative vendors and enterprises, helping them leverage personalization strategies to build lasting competitive advantage.

"Personal=Smarter," says Bruce, explaining that the more a company customizes, the smarter it becomes. The smarter it gets, the more formidable a competitor it becomes. He has delivered training programs, workshops and keynote speeches to a wide variety of organizations in 21 states and eight countries. His audiences have included technology executives, physicians, managers, customer service representatives and entrepreneurs.

And as he shares in the following interview, Bruce is writing a second book on the topic! So stay tuned for much more brilliant ideas from this great mind in personalization!

FTP: Bruce, there has been a long discussion about terms and concepts in our field. So, what is personalization in your understanding?

BK: Personalization is using technology to accommodate the differences between people. Done right, it's a win/win strategy for providing a better outcome for both the service provider and the individuals involved. For example, if a doctor gives you a test to determine which treatment will work best for you before she starts your treatment, that's personalization. Likewise, if a company gives you the option to tell them when and how to contact you, that's also personalization.

FTP: How is this different to mass customization, where are differences and complements between personalization and mass customization?

BK: Mass customization is a process for implementing personalization. In some respects, personalization is a goal and mass customization is one way to accomplish that goal. But we need to be careful about defining or debating semantics. Both personalization and mass customization push a company towards being more responsive to the marketplace and thus being more nimble. Both result in a firm that can react faster and more effectively to volatility. Both enable a company to build defendable competitive advantages, because both require a firm to track, understand and accommodate the needs of its customers.

FTP: You are one of the earliest voices and thinkers in the field. What originally drew your interest to the concept of personalization?

BK: I was very lucky. One day I read "The One to One Future" by Don Peppers and Martha Rogers, and thought it was brilliant. At the time, I was working for Ogilvy & Mather, and I wrote a strategy brief for a client that used some of the personalization ideas from that book. Shortly thereafter, I saw a little story in our local paper announcing that Don and Martha were starting their company in my town! I sent them an email asking if they wanted a partner, and included a version of my brief. One week later, I was their partner. That was 1996, and it gave me the luxury of spending all my time thinking about personalization and working with many of the pioneers in the field.

FTP: What are recent trends you see with regard to personalization? Are there any industries or individual companies driving these trends?

BK: Personalization is everywhere, although it's not necessarily called that. I dare anyone to name an industry in which personalization is not playing an increasingly important role. It impacts how you search for information, share opinions, make decisions, place orders, use products, get service, and live your life. Google is a leading practitioner, and both IBM and HP are key enablers. For example, IBM's "smarter planet" approach is a wonderful embodiment of the "Personal=Smarter" logic I've been talking about for some time. I was thrilled to see one of the world's largest companies adopt this theme as a selling point for its clients.

The most important trend, just now emerging, is the opportunity to personalize the development and care of our bodies and minds. It sounds dramatic to say it, but personalized medicine and education will literally impact the future of the human race. At present, "personalized" approaches are being used to restore health and function to people who have a physical challenge, such as the loss of a limb or of control over their body (such as ALS.) But as these technologies get cheaper and more powerful, they will be made available to everyone. For example, a brain-computer interface that a "locked-in" individual uses to communicate (because he can't speak) will someday help students learn faster and more in tune with their personal learning styles.

FTP: What is the largest challenge still to be overcome in personalization?

BK: The way we think. Personalization is not a difficult concept to understand, but it is a difficult concept to apply. It's easier for managers to look at customers, projects and investments in isolation, but personalization requires a process – and a mindset - that pervades an organization. It requires a different culture, and near-constant care and feeding of that culture. Not many managers understand this, yet.

FTP: What would be your main advice for a manager who wants to lead a personalization or mass customization implementation?

BK: Spend 25% of your time and budget on training, and on changing your culture. When it comes to personalization, training is not a one-time thing. Your staff and your systems are used to a non-personalized approach; they will constantly try to shift back in that direction. Unless you anticipate this and work consistently to prevent such backsliding, it will prevent you from enjoying measurable success.

FTP: You recently started your new blog, nowpossible.com. The depth and width of content you have provided there just within the last two months is really astonishing! What was your motivation to start this effort, and who is your target audience?

BK: Thanks. I'm writing a second book on personalization called "You! and Improved!", and as you know, writing is a solitary process. The website gives me an opportunity to test ideas, get feedback, and enlist innovative people in my work. I have two target audiences. The first includes innovators in organizations who are making personalization work better and better. The second comprises thoughtful individuals who would like to understand and benefit from this trend that can change their lives for the better.

FTP: To conclude: What is, in general and beyond your industry, the greatest personalization (and/or mass customization) offering ever – either one that is already existing or that you would like to get in the future?

BK: That's simple. I want to gain control over my fate, to anticipate and thus prevent the afflictions that would otherwise shorten my life or reduce my quality of life; to stay strong and mentally sharp longer than previous generations; and to be able to find and connect with the people and ideas that personally interest me.

Contact Bruce Kasanoff at (203) 341-9448 or bruce (at) nowpossible.com

Customization of Music: SongMap helps you to create custom songs

Church music may be one of the most standardized products in the world. Since hundreds of years, church goers use the same songs and rhythms which often become part of the cultural tradition of a society.

Not any more. Last week, LifeWayWorship unveiled the latest innovation in digital music: SongMap, a web-based application that allows users to create custom arrangements of songs and produce corresponding audio files and sheet music.

Lifeway is a service company supporting the Southern Baptist Convention and one of the world’s largest providers of Christian products and services. But despite its religious mission, it uses latest technology and has invented really a world's first-of-a-kind product with its customizable music offering

Well, old-time readers of my blog my remember a similar offering of cutomizable music, but not in this scale and scope.

SongMap is the first web-based technology that allows users to choose specific sections of songs: verses, choruses, transitions, and more ... and then download sheet music and audio files that correspond to the custom arrangement. The technology was developed specifically to meet the needs of worship leaders who want more flexibility arranging songs for church services. At the same time, SongMap has broader implications throughout the mainstream music world.

“SongMap is the first technology that gives users the ability to change songs on the Internet to meet their own tastes,” said Mike Harland, director of LifeWay Worship.

“Some churches need sheet music for a full rock band each week, while others rely solely on accompaniment tracks. We set out to find a way to help these churches create music that suits their congregations. In doing so, we created a new music technology that does what none other has done before.”

Very similar applications could be used by schools, theaters, local choirs, and so on ... however, I don't know whether the creators of this technology would love to see their product used for some raunchy song by 50Cent.

Three years in development, SongMap was created by a team of software engineers and music industry professionals. It involved the largest known recording project in Nashville history. Nearly 1,000 songs and 8,000 mixes were recorded in just 10 months by over 150 professional musicians, vocalists and engineers. The production team then divided the arrangements into more than 500,000 individual segments. From these segments, the SongMap technology allows users to “map” custom mixes of individual songs.

The cost to map a song ranges from $ 1.49 to $1.99 per part. Once a song is purchased, the user has immediate access to the corresponding MP3 file and sheet music. I am curious to learn how this technology is accepted and how it will develop in the next years. I could imagine a Zazzle or Spreadshirt-kind of business model: Some creative people create new songs to address, e.g., a recent trends, and then share their creation with others in their own online song store. 

Context Information:

• SongMap Website
• Springwise on SongMap
• Earlier Posting on similar offering
• More on customized music
• Mass customization seems to be the concept of the year at US Christian enterprises, as also this news article reports

Open Innovation in the Financial Services: New Book by Daniel Fasnacht Covers Change in Banking Industry

Can open innovation save the financial industry? A new book suggests that this concept may have an important contribution to the change required in setting up more sustainable business models.

 The idea of open innovation is still getting more and more attention of managers responsible for innovation. Most of the publications and reports on the topic, however, are focusing on tangible products. But how about open innovation for services? Like financial services? Daniel Fasnacht says yes. In an upcoming book, he regards open innovation as a key concept for change. Daniel Fasnacht is an executive director at Bank "Julius Baer" in Switzerland and the author of the recently published book, Open Innovation in the Financial Services, published by Springer in January 2009.

The book identifies the shift from a closed to an open innovation paradigm in many financial institutions to react on recent financial and political challenges. Open innovation according to Fasnacht's definition is a mindset characterized by openness, flexibility, and customer integration. The book presents open innovation as a broad framework, including also concepts like developing ambidextrous thinking, creating an intrapreneurial attitude, and getting a systemic and holistic view on the firm. The term "open innovation" thus is used as a metaphor to address a wider array of options for strategic change in a conservative industry (Fasnacht uses the term much broader than I do it usually).

I invited Daniel Fasnacht to summarize his thoughts presented in his book. Find his short guest article to this blog in the following. FTP.

---

Open Innovation in the Financial Services

By Daniel Fasnacht

Banking has traditionally been a conservative industry and resistant to change. The stable industry structure, defined boundaries, clear business models, and identifiable players made change linear and predictable. But the recent global financial crisis have led to an industry with ambiguous structure, blurred boundaries, new business models, intermediaries and market entrants.

Banking and in particular banks have come under great pressure since September 2008 when Lehman Brothers, an institution which traces its roots back to 1850, filed for bankruptcy. Today, change in banking is unpredictable. Speed, efficiency, flexibility, and reliance have all become equally important factors not only for success, but to survive.

These new business rules and the hypercompetitive global environment have wide implications for management. Visionary leaders realized the need for extensive adaptations with innovation as a source of competitive advantage. Beneath the surface of banking, the overall phenomenon that will drive change in years to come is anticipated to be the shift from a closed to an open innovation paradigm.
Within the new paradigm, focus lies on openness, flexibility, and customer integration with the cooperation as the dominant organizational model. Firms in the financial services increasingly adopt open innovation concepts from manufacturing.

One application of open innovation has been adopted by almost all banks in recent years. They embraced open architecture as a model, which offers clients a full range of products, regardless of their suppliers. Openness is an essential prerequisite for the ability of modern financial firms to achieve differentiation, expertise, and specialization on the supply side, while providing superior service to highly satisfied customers on the demand side. To offer such a wide assortment, banks must balance the internal and external offerings. Thus, banks must restructure their client advisory processes as a complementary service to their product portfolio, with the aim of increasing customer value.

But with flexibility I would also like to refer to collaborative innovation. In other words, in a partnership flexibility is needed to control risk, commit limited resources, adapt to changing conditions, and exit easily. Listening to the voice of the customer and differentiating customer needs suitably are vital activities and impact customer satisfaction. Understanding client needs is key for developing new segments and value propositions. Many wealth managers hence today move from client segmentation based on assets to qualitative and psychographic criteria such as behavior type, source of wealth, and the life-cycle phase of the client. These are concepts for the future that help to tighten the relationship between the customer and the bank. Offering open architecture and focusing on servicing rather than pushing products is what clients want.

I am convinced that such approaches additionally increase trust. But managing multiple product offerings, serving, and advising clients across the globe is a huge challenge. By adopting a new open model of innovation, executives are able to cope with strategic change and simultaneously increase efficiency, flexibility and customer service. The capability for open, flexible, and aligned interactions is required for all business practices, but is not only important for expansion strategies in general, but especially during turbulent times.

In my book, I developed an integrative open innovation model (see the figure for an overview). The model illustrates the environmental changes, coming from the market, policy & regulation, customer, technology, and economy. These developments, together with recent incidents such as the financial crisis, have led to the phenomenon – the transition from a closed approach to open innovation. To master the transition, I elucidate the transition strategies observed in a number of firms. Implementing those strategies requires a set of new dynamic management practices and an open organizational culture that fosters the transition and releases organizational energy required to do business in the open innovation paradigm.

About the author: Dr. Daniel Fasnacht, born 1969, is an Executive Director at Bank Julius Baer. As chief of staff for Latin America, he is in charge for strategy, market development, and management support. Daniel has previously worked for Credit Suisse, Accenture and SAP. He has more than a decade’s experience in the financial services industry. He holds a degree in information management, an MBA from the University of St. Gallen, Switzerland, and a PhD in Strategic Management from the University of Nottingham, England. He has published several articles about open innovation and strategy. He may be contacted at [email protected]

Download the table of contents and a sample chapter of the book.

MVM Visual Search - Free Webinar on new shopping personalization technology

In September last year, My Virtual Model (MVM) unveiled a first-of-its-kind personalization technology in a partnership with Sears and IBM (Note: I am using the term personalization according to my own definition, i.e. it refers to a customized shopping experience – I will work on an update on this definition soon).

Struggling retailer Sears is investing heavily in its web-site to counterbalance decreasing sales in stores by a great web experience, probably the right way to do! As part of this effort, Sears.com was the first company in the world to integrate MVM's new 3D visual search and e-commerce capability on its site. Now, after the x-mas shopping rush, Sears confirmed that the technology significantly improved and enhanced a consumer’s online shopping experience. Sears was the first retailer to apply both a visual search and virtual model to an entire catalog online.

The Sears site allows consumers to recreate their in-store shopping experience online by enabling them to search for merchandise using images versus words, and to virtually “try on” selected items using a personalized model of themselves to ensure that the style, color, pattern and fit are right before purchasing.

It is a great advancement in personalization and online experience (Disclaimer: I served on MVM's board of directors, so I may be a bit biased in my positive evaluation :-)

Next week, Louise Guay, President and Founder of My Virtual Model, is offering a free series of Webinars where the visual search application will be demonstrated, and where Louise also will comment on the achievements and challenges of this technology.

Louise will make a 30 minute presentation on:
- January 21, 12PM (ET)
- January 21,  4PM (ET)
- January 22,  4PM (ET)
- January 23, 12PM (ET)

To register for a Webinar, go here.

Topics of the Webinar:

• 3D Visual Search: use Key-Images to find what you are looking for sooner.
• How to create a scalable solution that covers 100% of your product assortment.
• Outfitting: create inspirational fashion looks.
• Targeted recommendations based on shopper’s profile and behavioral patterns.
• How to uses MVM to drive qualified traffic to your site.
• News from the Virtual Model community.

Update (Jan 20, 2008): Today, MVM announced its new Jeans Finder in cooperation with IndiDemin:

For more information, go their site. More information about indiDemin is in this previous posting.

Invitation: Conference on Customizing & Personalizing Media

This is an invitation to a very interesting event in Cologne on Jan 15. Customizing media is one of the topics that has been discussed most in the last years. But while there is plenty of talk, practical applications are rather scare (beyond customizable music streams with Last-fm or Pandorra). So here is the opportunity to discuss the topic in depth -- with the people offering media in Germany. The conference is, however, in German language, and so is this posting.

Das Institut für Rundfunkökonomie an der Universität zu Köln lädt ein zu einer Vortragsveranstaltung anlässlich seines zwanzigjährigen Bestehens:

Die Individualisierung der Medien. Herausforderungen und Chancen
Donnerstag, 15. Januar 2009

Kammermusiksaal des Deutschlandradios, Raderberggürtel 40, 50968 Köln

10.00 h Grußwort: Prof. Ernst Elitz, Intendant des Deutschlandradios

10.10 h – 10.35 h: Prof. Dr. Detlef Schoder, Institut für Rundfunkökonomie: Die Individualisierung der Medien als betriebswirtschaftliche Aufgabe

10.35 h – 11.00 h Helmut Heinen, Vorsitzender des BDZV (angefragt): Die Individualisierung der Medien als Herausforderung und Chance der Zeitung

11.30 h – 11.55 h: Prof. Dr. Heiner Meulemann, Institut für Rundfunkökonomie: Nutzerpräferenzen und die Individualisierung des Rundfunks

11.55 h – 12.20 h: Dieter K. Müller, ARD-Werbung Sales & Services GmbH: Daten und Methoden zur empirischen Ermittlung der Zuschauer-/Zuhörerpräferenzen in Deutschland

13.50 h – 14.15 h: Prof. Dr. Horst M. Schellhaaß, Institut für Rundfunkökonomie: Individualisierung der Medien –  wettbewerbsstrategische Implikationen für die Sicherung der Meinungsvielfalt

14.15 h – 14.40 h: Eva-Maria Michel, Westdeutscher Rundfunk (angefragt): Individualisierung der Medien –  Herausforderungen und Chancen für den öffentlich-rechtlichen Rundfunk

15.30 h – 15.55 h: Dr. Manfred Kops, Institut für Rundfunkökonomie: Individualisierung der Medien – Selbstregulierung als medienökonomische Konsequenz?

15.55 h  – 16.20 h Ernst Elitz, Deutschlandradio: Individualisierung der Medien –  Herausforderungen und Chancen für den professionellen Journalismus

16.50 h – 17.00 h: Prof. Dr. Günter Sieben, Institut für Rundfunkökonomie: Schlusswort

Das Funkhaus des Deutschlandradios liegt im südlichen Kölner Stadtteil Raderberg. Ab Dom/Hbf fährt die Buslinie 132 bis Haltestelle Bonner Str./Gürtel und die Linie 133 bis Brühler Straße/Raderberggürtel. Von dort aus erreichen Sie in wenigen Gehminuten das Funkhaus. Mit dem Auto fahren Sie über den Kölner Autobahnring bis zum AB-Kreuz Köln-Süd. Von dort fahren Sie über die Bonner Straße ca. 2 km stadteinwärts bis zum Raderberggürtel. Am Funkhaus steht den Tagungsteilnehmern eine beschränkte Anzahl von Parkplätzen zur Verfügung. Vom Flughafen Köln-Bonn erreichen Sie das Funkhaus mit dem Taxi in ca. 20 Minuten.

Veranstalter und Anmeldung: Institut für Rundfunkökonomie an der Universität zu Köln, Hohenstaufenring 57a, 50674 Köln, Tel. +49221-233536, [email protected]
www.rundfunk-institut.uni-koeln.de

Weitere Information zum Thema auch bei Prof. Detlef Schoder [schoder at wim.uni-koeln.de]

User Innovation in the Catholic Church: Dioceses of Cologne launches idea competition platform

This is the last sign that there is something behind user & open innovation: The Catholic Church has started an online open innovation idea competition (well, one could say that the entire church IS a lead user invention anyway).

KJG, the Catholic youth organization of Cologne, one of Germany’s largest dioceses, just launched a web site where young people are encouraged to submit ideas what they want to change at the Catholic Church.

The website aenderwas.de (German for „Make a change“) broadly asks for ideas and suggestions. You can either submit a short idea or comment, or upload a long suggestion (perhaps for a real innovative interior design of a Church that you would like to see; or the tunes of a song you would like to sing …). Interestingly, they also ask one of the easiest but often neglected questions: If you don’t go to church, why?

People who submit the best and most innovative ideas will be invited to a kind of lead user workshop to build on these ideas and to transfer them into more concrete offerings. But the people behind the initiative also know about the limits of this approach and acknowledge in a disclaimer that not all change requests can be incorporated immediately.

It all started, by the way, when one of the organizers was in an Executive MBA class I taught on open innovation a while ago. She immediately saw the opportunities of improving the offerings directed towards younger people by the Church, and later transferred her learning into this project.

I am very curious to see what comes out of this initiative and what will be the experiences of this project. Will such a broad call for input generate real innovative ideas? I will keep you posted – and if you have an idea what to change with the Catholic Church (from the perspective of you, the user), the opportunity is there: www.aenderwas.de (note: While God speaks all languages, you need German language skills for this).

Pill Boxes 2.0: Vuru personalizes nutrition packaging

Sometimes it's all about the (re)packaging. As Springwise, a new Miami-based company called VURU sells nutritional supplements in personalized daily packs. Vuru is the brainchild of Grant Kornman, who says that his (heavy pill using) father inspired him to open this service, as Grant was fed up with selecting pills from many bottles to assemble the daily intake.

At Vuru, customers choose from over 2,000 name brand supplements and vitamins, select how many weeks worth they want to purchase and then have their personalized packs shipped to them. Each pack contains the daily dose into a slick little pack that fits 2-15 pills.

The idea: To spare customers the hassle of collecting pills from several bulky bottles into daily dosages. Vuru packs can be tossed into a handbag or pocket, and are perfect for travel. Each order comes with an information sheet, which has a picture of each pill, the supplement facts label, directions, warnings and any other information pertinent to that supplement or vitamin.

This is how the process works:

1 Name your pack: customers are asked to enter a name they would like to appear on their pack. This is an old personalization trick, that always works: Give something your own name, and you build commitment and involvement with this (standard) thing.

2 Fill your pack: From a long, long list, users now have to select their individual pills. In case you know exactly what you want, this is easy. In case you don't the site lacks a really important feature here: recommendation and advise. How should I know which nutrition supplement is best for me, what is the difference between the 15 kinds of vitamin C they offer, etc.

However: Besides creating their own unique blends, customers can pick one of Vuru's pre-selected mixes, varying from 'Woman's Yoga Pack' to 'The UrbanDaddy Pack'.

3 Choose the nubmer of packs to pick how many weeks supply you want and if you would like auto refills.

4 Checkout. Leave your credit card and money. Prices totally depend on the pills you choose.

Springwise comments on this idea:

"Several elements make this concept quite appealing. First of all, customers will love the ability to pick and mix their own, ultra-personalized blend from a wide variety of supplements. Secondly, there's the convenience angle: time-saving and life-hacking, Vuru is what our sister-site trendwatching.com would call a daily lubricant. One of those products that make people's lives just a little bit easier. Last but not least, the packaging is simple, shiny and chic. Which all combines to create a luxury 'health hack' that many consumers are willing to pay a premium for. The same concept could no doubt be applied to other industries. How about skin care products? Just be sure to think green and keep packaging to a minimum."

My comment: Nice idea and a good example how you can offer customization with standard products. This is just a nice packaging service, but one that may create customer value for heavy users of these products.

But: Sovital and other companies already go one important step further: They really customize the pill! and just produce a customized batch of nutritions just for you So that there is no need to take several pills (even if they come out of one nice bag) but just one that contains all the stuff your body needs.

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

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

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

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

His conclusions:

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

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

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

Read his entire thesis here.

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

Custom Credit Cards: Mass Customization in the Banking Industry

Springwise today featured a nice new custom-banking product: Custom credit cards. Mass customization in the banking sector is one of the hottest trends in the area. Surprisingly, above much talk, not much has happened yet.

Credit cards seem to lead the industry. The idea of custom credit cards is pretty old. But in most cases, it is just an extension of the custom personal cheque, featuring your pet, grad-daughter or president (for example at www.uniquechecks.com).

Turkey-based Garanti Bank however has extended this idea. With its Flexi Cards does not only allow customers to personalize the look of their bank cards, but also to develop the entire own banking product.

"Flexi Cards are Visa cards that let the cardholder make a few key decisions, allowing them to set over ten parameters. When applying for a card, customers can manipulate variables like reward rates and types, interest rate and card fee. The rewards system is especially flexible, not only letting customers determine reward ratio and type (cash or points), but also enabling them to choose which payments will earn them extra rewards: whether it are broad categories like restaurants, or specific stores like Zara.

Interest rate, bonus rate and card fees are selected by sliding bars that render various combinations of rates and fees. Card fees, for example, can be pushed back to zero by committing to a monthly spending minimum. A lower interest rate leads to a lower bonus rate, etc. Lastly, after making serious decisions about financial terms, customers can design their own card, choosing from different colors and a gallery of images, or uploading their own image. There's even the option of picking a vertical card, which is a world's first for Visa."

A very similar idea (based on a Mastercard) was introduced already in 2002 by the UK company Royal and Sun Alliance. Their MORE THAN credit card also provided their customers the opportunity to create their ideal credit card. Customers could choose their own APR, cashback, servicing options and annual fee to suit their needs as they change over time. I have featured this example since years in my presentations, but just had to learn that the company stopped this offering. Reasons unknown.

But the concept itself promises many opportunities:

"While customers appreciate being in control and creating a tailor-made card, inside and out, the bank is able to test various value propositions, gaining valuable insights into which customer segments choose which options. Self-segmentation through ultra-personalization. ;-)"

I couldn't say it better than the guys at Springwise! If you know interesting other concepts of mass customization in banking, let me know!

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

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

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

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

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

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

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

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

See here for authors and abstracts of all cases.

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

Related posts on this topic:

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

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

Personalization and Music: Beyond shuffling on your Ipod -- an overview of new services to customize your music experience

What we can learn from the BBC, Pandora, and Musiclens for mass customization

The traditional compilation CD is deader then ever. Instead of listening to all songs of an entire CD, most consumers today prefer just to listen to what they want on their MP3 players (a typical long tail phenomenon). But selecting, filling and arranging the playlists of these players have stayed more or less a craft business. While some persons feel joy and achievement once they have generated their very own, individual playlist, this is, none the less, plenty of work. Also, listeners are restricted to the music they known (and, more or less, own).

Sure, with satellite radio, there are now highly focused radio stations which substitute general radio broadcasts. But often, even these stations are still a bit too broad and contain songs that you don't really like too much – and too few of your real favorites.

Here, three new services provide help. Using different approaches, they allow users to customize their music experience beyond the restrictions of ownership, information about favorite songs, and the demand to manually craft a custom playlist. These services provide tools to find new music matching an individual's preferences, but also enable custom broadcasting services of a new level.

Note: I am not talking here about the option of customizing the particular song. While there are some new promising offers (e.g., at http://www.dabreakupsong.com you can create a custom rap song to break up with your partner :-), this is a minor field of application (see my posting on this subject). Most people don't want to customize their music on the level of the single song, but they want to personalize the stream of songs they listen.

BBC to Develop Personalized Radio Service

Madeforone recently reported about a new personalized radio service that the BBC is developing. The UK state broadcaster wants to allow audiences to create personal radio stations from its content, its director general has said. The service, provisionally called MyBBCRadio, aims to give audiences more control by combining existing services such as podcasts and the BBC Radio Player. It will be part of the BBC’s iPlayer, a new interface device that shall transport custom content (music, video, reportings) to each user.

With its earlier Backstage offering, the BBC has been a forerunner of user-generated content. It changed its policy from protecting its content to giving most of it away to listeners for free, allowing users to create new works by mixing their own stuff with BBC programming (more information here). NNC Backstage, however, was more an offering for leading-edge users or music lovers. But the new MyBBC Radio Service wants to bring this capability to the mainstream.

Radio 2.0: Pandora and the Music Genome Project

But personalized radio stations do already exist. Once of the best services is Pandora, a music discovery service designed to help users find and enjoy music that they like. Based on a huge database that has categorized songs of over 10,000 different artists based on unique attributes, it helps users to find music that has the same characteristics of a song or artist they like. Just type in a name of a favorite song or artist, and let the magic begin. I was highly fascinated by the quality and scope of the resulting personalized music stream (you need an US ZIP code to use this service, if you live abroad, just use 02138, my postal code).

Pandora has a totally different approach to configuration compared to the majority of other configuration toolkits. It is a good example of a need-based system, i.e. an expert system that does not demand that users can describe exactly what they want, but that just analyses what they like and provides suggestions based on this analysis.

The service is powered by the Music Genome Project. In this project, founded by Tim Westergren in January 2000, a group of musicians and music-loving technologists came together with the idea of creating a comprehensive analysis of music. They assembled hundreds of musical attributes or "genes" into a very large "music genome". Taken together these genes capture the unique and musical identity of a song -- everything from melody, harmony and rhythm, to instrumentation, orchestration, arrangement, lyrics, singing, and vocal harmony.

This kind of expert analysis of all songs provides the main difference of Pandora to other music recommendation systems based on collaborative filtering (as, e.g., at Amazon.com). Collaborative filtering works without any idea of the nature of the articles it is recommending, as it is solely based on comparing the usage (shopping) behavior of one user with the behavior of other users. Pandora, on the other hand, is not based on such a analysis, but solely on the nature of the products (songs) it recommends.

Pandora is offered for free in an advertising supported version (and of course the company hopes to get a provision when you buy a song you discovered though its service). There is also a subscription based service without advertising. All music is streamed, this means it is not possible to download or safe the stream (legally). With a special device, you can also listen to your very personal music channel without your computer.

More information and analysis: http://blog.pandora.com/press/

MusicLens: Configure Your Music

Now compare Pandora to MusicLens.de, a German project that aims to test four different technologies to analyze music like it has been done in the Music Genome Project. However, this service opens the Pandora box and allows you to really configure the music you like. Using more than 10 sliders, you can describe exactly the music you want to hear, like its tempo or subjective volume. You can also define the purpose of the music on a scale from listening over driving and sex to dance. And set the mood of the song (on a scale from smile to angry).

As a result, you get a play list with songs matching your desires. Sounds too complicated? You also can just provide a favorite song for the start, see its characteristics, modify them just a bit, and get new music. As this is a test project, however, the music available does not match the scale and scope of Pandora's repertoire. But the web site provides already a good indication of the service.

MusicLens uses a fuzzy search technology to find music - CDs, albums, song titles or artists - by characteristics. Searches can be carried out in large masses of data quickly and effectively. And, despite the terms of the enquiry being vague or indefinite, the results are clear. The idea is to provide users also good results when they do not know what they are looking for – a feature conventional search engines do not have. Users also do not need to use specific search vocabulary or any form of literal definitions. The search is conducted by way of various characteristics or categories, represented by the slider navigation system.

DDD-Systems, a Hamburg based IT services company that is behind MusicLens, hopes to position the system also as a business-to-business service. The search technology shall assist those involved in purchasing film, radio or television content to find the right content.

Beyond segments and clusters

Why do I write about all this? In my opinion, MyBBCRadio, Pandora, and MusicLens provide some great general insights for mass customization:

-- These services overcome the traditional categorizations (market segmentations) of music in genres. There are no clusters of "Independent", "Pop", or "Rock" music. All categorization is based on an individual user's preferences and desires.

-- Pandora and MusicLens apply modern search technologies which support a need-based configuration approach. Instead of today's dominating parameter-based configuration approach (users configure products based on concrete selections of components and modules), they help to define products based on a description of the user's needs and preferences.

-- They address the customization of services. Up to today (and also in this blog), mass customization is often solely discussed in relation to the individualization of physical products. MyBBCRadio, Pandora, and MusicLens are great examples of mass customization of service offerings.

But for now: Enough words, now go ahead and listen to your personal music.

Ning.com - Mass Customization of Business Models and More

Social Web is one of the hot topics of the Web 2.0 paradigm. The term Social Web refers to an open global distributed data sharing network similar to today's World Wide Web, except instead of linking documents, a social web link people, organizations, and concepts. It builds on user-generated and user-distributed content. A new venture, online for less than 6 months, is now making the creation of social web applications, mixing and matching existing data in new ways, more easily as ever.

The idea behind Ning.com is to create a free online service for cloning, customizing and sharing Social Web Apps. Think of a "Playground" for finding, creating, and sharing web applications that enable anyone to match, transact, and communicate with other people. Ning's online platform allows users to painlessly create these web applications without any hosting demands or server administration hurdles.

Applications are created by users or by Ning. The existing standard social apps offered today include listings, reviews, ratings, recommendations, bulletin boards, dating applications, photo sharing, social bookmarking, wishlists, events, and people matching, among others. Examples are Map Mash-Ups (like Restaurant Reviews, Photo Maps, Review systems, Trail desriptions etc.), media sharing applications (Photo, Video, Book sharing), Social Bookmarks, Marketplaces (like Craiglist), Social Networking, Dating application, and many more. Users can also easily add commerce functionalities of Flickr, Google Maps, eBay, Amazon, or Yahoo! Search.

So what can users create and customize? Say, you want to create a web site which helps food loves in your region to share their favorite restaurants, add cook books written by local chefs, a matching service to find dinner dates, and a navigation system optimizing the trail for a restaurant crawl. Within a couple of clicks and trials, you can build such a web serve with Ning. This sounds for me very much like mass customization of business models: Take some generic modules, adapt and customize these, mix and configure them according to your vision, and launch the business – to either profit from it or just have fun by connecting with other people.

The idea is to put the power of social web apps in the hands of everyone. "We think it should be as easy as a few clicks to turn any great idea into reality. On top of that, we just think it's more fun when people share their great ideas.", the founders describe their motivation. "We want to put something out onto the web that inspires creativity and where it's fun to make things."

Ning provides users with a
- Free hosted environment
- Standard PHP & HTML modules,
- Lots of freely available PHP code to get you started
- SFTP support for own IDE
- The opportunity to create own ads
- Data sharing between apps
- Automatic user authentication
- a built-in search engine and tagging system, and much more.

How does Ning make money? All user generated sites have a generic Ning Sidebar to provide shared services, but also text advertising and links. I believe that they will also get provisions for purchases made at, e.g., Amazon though one of their apps. And the user base of Ning will become an important asset for the company. We will see if this idea takes off. But I liked the concept very much, and it shows a new frontier of user co-creation and mass customization in an area not discussed before.

UK Pop Duo Erasure sells customizable MP3s -- Music configurator online

Sean McManus reports in his blog on a new technology that enables fans of the UK synth pop duo Erasure to mix their own single and then download the custom mix as an MP3 for UK£2.

This is the ultimate version of the "limited edition CD" trend". The web site erasuredownload.com offers a web interface, a kind of music configurator, representing different parts of the music like the bass line, synth lines, drum pattern, vocal delivery and backing vocals.

In his article, Sean reports how he purchased mix number 16835 (out of about 40,000 different possible mixes). But most important:

"The site won't sell two remixes the same, but there are 40,000 different possible combinations to choose from. "When someone tries to buy a version we check whether the version number is already bought or not," says Marc-Henri Wouters, CEO and founder of Trust Media, the company behind the customization technology. "If the desired version has not been previously bought, then we continue the buying process. Otherwise we ask the user to choose another version." Now that is what I call a limited edition."

Read the full story here: http://www.sean.co.uk

This is a nice idea, and from a marketing perspective, I like the artificial limitation of the tracks. The service offers also some devoted fans without large computer or composing skills the possibility to create a custom product which shows their personal bonding to the band.

However, on the long run, I think this kind of customization is not really sustaining. New music is created by mixing and matching existing tunes, sounds, ideas or motives -- and thus the idea of sharing a band's tunes freely under a Creative Commons License with all fans is much more sustainable and satisfying. And only this allows for real creativity. This is where open innovation is superior to good ol' mass customization. There are a huge number of bands which share their content more openly with their fans (have a look at http://creativecommons.org/audio/).

Mass Customization of Books: Amazon finally jumps on the unbundling trend

Amazon.com announced last week that it will finally offer readers the possibility to customize books from various publishers. Building on its "Search Inside the Book" technology, which allows customers to search the complete interior text of hundreds of thousands of books, the company is currently developing two new programs that will enable customers to purchase online access to any page, section, or chapter of a book, as well as the book in its entirety.

Amazon thus is finally offering on a retail level what innovative publishers like MetaText, Cinado.com, Symposion or Addison Wesley have done since years: Providing readers the opportunity to purchase just the pages they really need. What might be not a good idea for novels, is great for edited books or also many trade books, where often the first and last chapter are giving you 80% of the information you want to know.

Indeed, also my most recent book on mass customization and open innovation has been published in this manner (in German language: "Mass Customization und Kundenintegration: Neue Wege zum innovativen Produkt", co-authored by Frank Piller and Christof Stotko, 2003). This was the first customizable book on mass customization. The book's first part discusses the implementation of a mass customization strategy and extends the concept towards open innovation. Readers can order all chapters of this book separately (here, of course, the 80% rule mentioned before does not apply).

The second part of our book consists of more than 25 case studies and plenty of additional expert chapters on specific parts of the book. These chapters can be identified with an easy, but useful configurator, helping readers to decide which chapter is fitting best to their needs (more information on the book: http://www.mass-customization.de/ibook.htm, the configurator can be found here: http://www.symposion.de/msc/inhalt.htm).

So, while Amazon's announcement is nothing new, it will affect the market for customization in the book sector enormously as it will offer readers a one-stop-shopping and combine customization with Amazon's market power.

In one of the planned offerings, called "Amazon Pages", the physical-world experience of buying and reading a book will be "un-bundle" so that customers can simply and inexpensively purchase and read online just the pages they need. For example, an entrepreneur interested in marketing his or her business could purchase the relevant chapters from several best-selling business books.

A second program, "Amazon Upgrade," will allow customers to "upgrade" their purchase of a physical book on Amazon.com to include complete online access. For example, a software developer who buys a Java programming book will not only get the physical book delivered to his or her home, but will also get Web access to the complete text of the book. Buy a cookbook and you will not only have it on your shelf, but also be able to access it anywhere via the Web. However, many publishers still have to sign so that Amazon can offer these services. In the moment, only very few books are available in this mass customization program.

For customers, this is great news. It will make access to books faster and more accessable. And will finally also provide to customers the convenience that purchasing one chapter is cheaper and more convenient than copying this chapter from the library page by page.