"managed customization” in the garment industry - 10/2010

© Brandvis Ltd. 2010

“Managed Customiza1on” in the Garment Industry

4th Interna*onal Conference on Mass Customiza*on and Personaliza*on

in Central Europe (MCP -‐ CE 2010)

Oct 2010

[email protected] CTO

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Financial Crisis … and Mass-‐Customiza4on

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© Brandvis Ltd. 2010 3

The Brandvis Solu4on

−  SoHware •  Template-‐based Garment Customiza*on Engine

•  Patented mechanism provides immediate cer*fica*on against safety standards

•  Fastest, most accurate way to customize technical workwear

−  Garment Manufacturing (if required) •  Brandvis owned facility in Suzhou, China •  Samples in one week •  Focuses on low batch, custom orders

•  Short lead *mes


Key Finding(s): The garment industry is changing

−  Pressure to innovate – Introduce customiza*on •  “Get out of the race to the buUom”

−  Pressure to save money – In small batches •  Reduce “money” in stock, Reduce requirement for large upfront

investment/commitment

•  “60% of the business will be framework tenders”

−  Pressure to save *me – With short lead*mes •  Legisla*on was introduced in 2003 to cer*fy technical workwear

against EU/EN and/or ANSI standards

•  Cer*fica*on can take up to 3 month

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Key Finding(s): The current state

−  Designer/”Market”/”Customer” driven •  The Design/Marke*ng departments own/rule Product Mgmt

•  Products get created on the fly, based on (perceived) customer feedback and/or based on “the looks”

−  Catalogs have become unmanageable •  900+ Products, 10000 Parts/Fabrics, 20% reuse

−  Costs are exploding, Prices are under pressure

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Key Finding(s): The way out

−  Introduce the concept of “Managed Customiza*on” •  Not “new”. Other industries (e.g. Automo*ve) already use it.

•  What is missing is a clear understanding what a/the equivalent to a/the VW PQ35 “plahorm” is and how to maximize the reuse of parts between the configurable cars (e.g. Audi A3, VW Touran, …)

−  Introduce the concept of a Garment “Template” •  Makes the customiza*on manageable

•  Makes the journey manageable

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Managed Customiza4on

Template Builder Configurator

Everything that the BOM can build

Everything that a template can build



Template Builder Configurator

What Manufacturing can build in batches of 50 with a lead-time of 4 weeks!



• Optimizing production for maximum efficiency

• The relative cost of change/cost of setup is marginal

• Optimizing production for sufficient efficiency

• Minimize cost of change/cost of setup since it is substancial

Chg Production

C P C P C P C P


Reverse Engineering of Catalogs

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% of Garments as Templates

# of Templates % of Parts overlap between Templates

Brandvis 100% 18 80%

Catalog 1 40% 5 30%

Catalog 2 80% 2 50%

Catalog 3 100% 1 100%

Catalog 4 50% 12 50%

Catalog 5 60% 6 80%


Sales Breakdown

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<=50 <=250 <=500 >=501

2009 60% 37% 0% 3%

2008 63% 36% 1% 1%

2007 49% 46% 3% 1%


Summary

−  The financial crisis did had an impact in the Garment Industry/Technical Workwear Market •  Smaller contracts (but more deals), … at best stable revenue

−  But companies who embrace these changed condi*ons (e.g. by introducing mass-‐customiza*on concepts to deliver innova*ve value-‐add) do con*nue to grow (at the expense of the dinosaurs)

−  “Managed Customiza*on” is a/the concept to manage the journey

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Backup Slides

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What will we talk about? And why?

−  Adop*ng mass-‐customiza*on strategies and concepts is s*ll challenging. I think/believe for all industries, but especially for the garment industry. Reasons are … •  Cost-‐oriented thinking (race to the buUom)

•  Lack of pressure to innovate •  Confusing personaliza*on with customiza*on

− E.g. Nike.ID, blue-‐cuUon, …

−  Going for one of two extremes: Un-‐managed customiza*on vs. pseudo customiza*on •  Un-‐managed customiza*on is expensive, slow and has therefore

limited value for a/the customers

•  Pseudo customiza*on is less expensive, but delivers very limited customiza*on choices/op*ons

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What will we talk about? And why?

−  Anecdotal and sien*fic effidence show that this is beoming a big problem •  Lets take for instance the workwear market. In Europe alone this is

a EUR 3000M market (USD 16000M in the US) . By now large workwear brands need to customize 30-‐50% of their orders and one very big fabric manufacturer did a study that showed that 35% of its customers orders are (by now) framework tenders, means tenders which will cover a big volume (e.g. 50.000 Jackets for a Police Force), but will be manufactured in customized, small batches (e.g. 500 Jackets for a given region/sta*on).

•  Vendors/Suppliers/Manufacturers which will learn how to deliver on these projects will create a compen*tve advantage their companies

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Who am I and what does Brandvis do?

−  CTO; 20 years industry experience; Manufacturing; IT

−  “Mass-‐customiza*on delivered”; 5 pillars −  Today I want to talk about the relevance and importance of

plahorms and templates to make customiza*on manageable and the experience we have gained so far

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My view on mass-‐customiza4on

−  “Deliver customized goods at (near) mass-‐produc*on cost”

−  It is more an aim, an ambi*on, a journey, a vision than something that you will achieve (ever reach). It is not a goal/target that you can declare to have conquered

−  But on the journey you can materialize good value for customers and enterprises •  Yes, the customized goods might not get delivered at (near) mass-‐

produc*on cost. There might be an upliH of 50%, but this is s*ll beUer than 100% upliH that you see if you are not going on the journey

•  “Know your customer” – beUer insight into what customers want

•  Get out of the race to the boUom – create a differen*ator/an innova*on

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Customiza4on of Workwear

− Not as simple as it looks like

−  Simple solu*on/approach •  Take a mass-‐produced garment and s*ck a logo on it

−  That’s not (really) working, because … •  The customiza*on can hurt the fabric

− S*tching through will make the garment leak (EN 343)

•  The customiza*on can hurt a standard − Changing the amount of visible reflec*ve material (EN 471)

− Means the only approach that really works in BTO

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Placebo Customiza4on

− Not REALLY customiza*on •  E.g. 10 colors on a T-‐Shirt

− Normally implemented using BTS −  (Very) Limited customer value

•  Avoids the problem of managing customiza*on at the expense of a bad customer value

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“Un-‐managed” customiza4on

−  Everything is allowed −  “Full” customiza*on

•  Not ETO, but close to it because in general you offer to build whatever your parts database can produce

−  Good for the customer in terms of flexibility; bad for the company in terms of complexity that needs to be managed •  As a result the value to the customer is limited, because the price of

these goods can be high (more than 3 *mes the cost of a/the mass-‐produced good) and the delivery/lead-‐*me can be very long (3-‐6 months)

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The concept of plaPorms and templates

− Not new •  E.g. Automo*ve industry

− Obvious value •  One plahorm can produce mul*ple templates

− E.g. the VW plahorm PQ35

–  Audi A3/Q3/TT, VW Touran/Caddy/Golf, SEAT Altea/Toledo/León, Škoda Octavia/Ye*/Superb

•  One template can produce a lot of configura*ons

•  While minimizing the number of parts you need to produce the end-‐product (deprolifera*on)

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− Non-‐obvious value •  Allows the company/en*ty to communicate internally (between

departments – e.g. engineering, manufacturing, sales, marke*ng) and externally (e.g. customers/markets, legal/cer*fica*on)

•  Makes the journey possible – allows you to start with a non-‐perfect level of ability to customize and get beUer at it over *me − Makes adop*on possible

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−  Currently limited acceptability in the garment industry •  Mainly product-‐ and catalog-‐oriented

•  Product thinking prevails; driven by customer requirements − No product-‐line/-‐management thinking

− No “lets build more with less” ambi*on

−  Experience from reverse engineering catalogs •  80% of a catalog can be expressed in terms of templates

•  Every template can express 10 catalog products •  Some catalogs are beUer than others

− Plahorm thinking vs. Product thinking

− Our own templates share more than 80% of fabrics and components/parts •  The differen*ator is in the design/style

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Different levels of (mass-‐) customiza4on

−  Engineer-‐to-‐Order (ETO) •  The product will be designed to fit the order

−  Built-‐to-‐Order/Make-‐to-‐Order (BTO/MTO) •  The product will be built to fit the order •  The opposite to Built-‐to-‐Stock (BTS) •  Suitable for highly-‐customized/low-‐volume goods

−  Assemble-‐to-‐Order (ATO) •  The product will be assembled to fit the order

−  Configure-‐to-‐Order (CTO) •  The product will be configured to fit the order

−  Built-‐to-‐Stock/Make-‐to-‐Stock (BTS/MTS) •  The order needs to fit to what is in stock

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Comparing *TO

Engineer’g Manufac’g Manufac’g Manufac’g Logis1cs

Design Parts Comp./Assemblies

Product Shipping Usage

ETO

BTO/MTO

ATO

CTO

BTS/MTS

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On-‐Order Prod. Pre-‐Order Produc*on

Pre-‐Order Produc*on On-‐Order Produc*on

P/O Produc*on On-‐Order Produc*on

On-‐Order Produc*on P/O Pr.

On-‐Order Produc*on

"managed customization” in the garment industry - 10/2010

Documents

pressure brandvis

templates brandvis

mes brandvis

cto brandvis

issubstancial brandvis

month brandvis

masscustomiza4on brandvis

journey manageable brandvis