Managed Customization” in the Garment Industry - 10/2010

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1. “Managed  Customiza1on”     in  the  Garment  Industry   4th  Interna*onal  Conference  on    Mass  Customiza*on  and  Personaliza*on     in…

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  • 1. “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   roland@brandvis.com   CTO  © Brandvis Ltd. 2010 1  
  • 2. Financial  Crisis  …  and  Mass-­‐Customiza4on   © Brandvis Ltd. 2010 2  
  • 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   © Brandvis Ltd. 2010 3  
  • 4. 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     © Brandvis Ltd. 2010 4  
  • 5. 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       © Brandvis Ltd. 2010 5  
  • 6. 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   © Brandvis Ltd. 2010 6  
  • 7. Managed  Customiza4on   Template Configurator Builder Everything that a template can buildEverything that the BOM can build © Brandvis Ltd. 2010
  • 8. Managed  Customiza4on   What Manufacturing can build in batches Template Configurator Builder with a lead-time of 4 weeks! of 50 © Brandvis Ltd. 2010
  • 9. Managed  Customiza4on   • Optimizing production for maximum efficiency Chg Production • The relative cost of change/cost of setup is marginal • Optimizing production for sufficient efficiency C P C P C P C P • Minimize cost of change/ cost of setup since it is substancial © Brandvis Ltd. 2010
  • 10. Reverse  Engineering  of  Catalogs   %  of  Garments     #  of  Templates   %  of  Parts  overlap   as  Templates   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%   © Brandvis Ltd. 2010 10  
  • 11. Sales  Breakdown   <=50   <=250   <=500   >=501   2009   60%   37%   0%   3%   2008   63%   36%   1%   1%   2007   49%   46%   3%   1%   © Brandvis Ltd. 2010 11  
  • 12. 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   © Brandvis Ltd. 2010 12  
  • 13. Backup  Slides  © Brandvis Ltd. 2010 13  
  • 14. 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   © Brandvis Ltd. 2010 14  
  • 15. 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   © Brandvis Ltd. 2010 15  
  • 16. 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   © Brandvis Ltd. 2010 16  
  • 17. 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   © Brandvis Ltd. 2010 17  
  • 18. 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     © Brandvis Ltd. 2010 18  
  • 19. 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   © Brandvis Ltd. 2010 19  
  • 20. “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)   © Brandvis Ltd. 2010 20  
  • 21. 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)   © Brandvis Ltd. 2010 21  
  • 22. The  concept  of  plaPorms  and  templates   −  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   © Brandvis Ltd. 2010 22  
  • 23. The  concept  of  plaPorms  and  templates   −  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     © Brandvis Ltd. 2010 23  
  • 24. 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   © Brandvis Ltd. 2010 24  
  • 25. Comparing  *TO   Engineer’g   Manufac’g   Manufac’g   Manufac’g   Logis1cs   Design   Parts   Comp./ Product   Shipping   Usage   Assemblies  ETO   On-­‐Order  Produc*on  BTO/MTO   P/O  Pr.   On-­‐Order  Produc*on  ATO   P/O  Produc*on   On-­‐Order  Produc*on  CTO   Pre-­‐Order  Produc*on   On-­‐Order  Produc*on  BTS/MTS   Pre-­‐Order  Produc*on   On-­‐Order  Prod.   © Brandvis Ltd. 2010 25  
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