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the cloud for “me” Mass Customization 2.0: meCommerce Cloud Platform

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Page 1: Customer Survey

the cloud for “me”Mass Customization 2.0: meCommerce Cloud Platform

Page 2: Customer Survey

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SelectEx Store Demo

http://directstore.logicmix.com/telenet/index.html

Page 3: Customer Survey

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Customer Survey Methodology

User of SurveysWe determined that due to the complex multi department nature of our product offering, a survey would not adequately address are information gathering needs.. Template based Mass Customisations solutions cross many departments (Sales, Design, Procurement, Manufacturing etc)

Face to face interviews (11 Interviews)It was decided focus on face to face interviews with demonstrations to senior executives and decision makers with the following companies.

Greater than €50M Less than €50M

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Large companies V’s Small Companies Findings

Large companies V’s Small Companies

• Large companies 50M <• Large legacy product issues – holding products that are obsolete but cater to a few

clients.• Huge portfolio of products

• Product innovation is slow and measured• Big department divide – Many small decision makers• Slow to move and evolve – Current systems are adequate for what they want and

change has not been forced on them• Customization seen as a necessary evil they must deal with

• Smaller companies 50M >• No legacy product issues• Tight well controlled products – links well with supply chain• One to two key decision makers• Open to product and market innovation• Customization seem as the means of differentiating themselves and providing

greater flexibility

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Software Requirements Findings

Software UI

• Wanted a virtual wardrobe/virtual dressing• Wanted their catalogues digitised

Software Backend

-Wanted integration with back office systemsSAP, Oracle etc

Software Store

• Multi-lingual, Multi-currency, • full shopping cart facilities including fixed product• Content Management

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FindingsBusiness Model Conclusions• Mass Customization business model is a desirable model in theory for our potential work wear clients.

But they are also constrained by their circumstances. To move to a mass customization model requires detailed revision of their supply chain and all the elements that touch it. We may be early with the template mass customization model for large companies in this marketplace. There is no compelling reason for these large companies to redefine their supply chain regardless of how beneficial the model may be.

• The model to be adapted quickly may require a transition model to adapt the UI aspect of our template mass customization model to meet current demand, while the supply chain (infrastructural aspects) of mass customization are modified over a longer period of time.

• The turnkey solution for some clients is a desired option (Software and manufacturing services for small batch ordering of apparel). This is an easier way to apply the business model where there is strong internal resistance to change. All the hard work is done outside the internal structures of the company.

• The ability to touch the customer (Sell directly too or influence) while not a defining requirement is seen as extremely important for our clients. This can get very complicated if the clients sells through 3rd party distributors. A mass customisation model passing through a 3rd party can get severely disrupted and elongated. It is not as effective a model as when dealing directly with the consumer.

• The value of the product is important for low price, high volume products, the benefits of mass customization are limited unless manufacturing methods allow for capital intensive solutions

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FindingsSales and Marketing Conclusions (Overcoming First Mover Distinction)

• Dealing with the decision makers and the decision makers. It has come clear from the face to face interviews that there in large companies there are many decision makers and even thought the primary decision maker may back you the process of implementation may last along time without support of departmental decision makers. We need to target our presentations to be broken up by department and address the concerns of every department. This will form the basis for getting consensus over implementation of the solution

• Dealing with supply chain lag to the software. There can be a big infrastructural lag between implementing the software and have the ability to scale the mass customized product production. This lag needs to be managed at the product design level and in combination with procurement. We need to map the stages of implementation better so that large companies can see a road map for implementation of software along side the product production model.

• Large companies v’s Small companies. Large companies like the solution and see this model as the future of their business, but are weary of the complexity of implementing it based on current infrastruture. They want a incremental step towards our model not total implementation. Also the decision making process is slow within these organisation and can take years.

• Mass Customisation Total Solution. For the smaller companies they require a turnkey solution, they have no manufacturing ability for small batch ordering even based on our Template Mass Customization model

• The target markets. We should look at a more open target market, as customization is a current trend, talking to venture capitalists and business accelerators may be an option.

• New entrants• VC’s

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FindingsSoftware Development Conclusions based on our face to face interviews there are a number of software modules that can be expanded on and developed.

• UI developments

• Virtual dresser for customized and fixed garments• Ability to sell both customized and fixed garments together• Logo management system to allow reuse of logo’s across many garments and to tag final

logo’s and logo formats for printing and/or embroidery.• BOM development – expansion of the current BOM module to allow for more complex

BOM scenarios• Technical files output development

• Backend Developments

• Stories on Integration with backend solutions, SAP, Oracle etc.• Stories on Integration with online CRM solutions, Salesforce etc.

• Developing with the customer UI focus and backend focus

• We need to work with a development client on all future module development, and develop a strategic plan for software development with these customer.

Page 9: Customer Survey

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Conclusions

Over all Conclusions• Our business proposition is a desirable model but the adaption speed may be slow with

large companies within our initial target sector. It is worth pursuing this project past the OAP stage and into the OEP stage

• Internal dynamics in companies play a big role in the decision making process of adaption of our solution. This can slow the process down considerably.

• We need to determine the balance of our effort between big target customers and small target customers. We should also explore more dynamic sectors such as the ones including retail.

• We felt that requirements are becoming more complicated but matching target customer size might be getting smaller. One of the possible solution is to make make SelectEX as a plugin to other eCommerce Platforms

• We need to think and adapt our solution to a more current model, the leap we are asking large companies to make with the current system is big, a transitional model incorporating some of there current key requirements is needed. We need to integrate fixed product more into our template model. This can be done over a period of time during a trial period with clients.

Page 10: Customer Survey

Content From Previous Introduction Slides

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Customization…growing global demand 10 Start-up trends that will be huge in 2012 Trend #3:

Customization • Entrepreneur Magazine - Dec 2011

70% of product strategists want to offer customized products.

• Source: Forrester Research October 2011.

Customers are willing to spend at least 25% more to get products built specifically to their needs.

• Source: The NPD Group Nov 2011

>35% of U.S. online consumers are interested in customizing product features or in purchasing build-to-order products that use their specs.

• Source: Mashable 2011

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MiTeam (Adidas) Launched June 2012

“We expect the market for personalized and customized footwear, apparel and hardware to grow strongly and evolve further in the coming years and will therefore continue to invest in the space”

Adidas Group – Strategic and Operational Opportunities Report 2012

Page 13: Customer Survey

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Movements in the Apparel Industry 2012 Industry

• Move to local production “Made in the USA, Made in France etc• Move to small batch production, maintaining uniqueness with smaller unit

batches• Move to faster turnarounds on product development and deployment• Move towards strong intellectual and copyright controls on apparel• Move towards reduction in sales costs and capital intensive stock holding • Move towards quality and value above volume in apparel production

Retail Customers• Move towards internet buying and global uniqueness• Move towards individual and unique customization, personalization

Page 14: Customer Survey

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Market Challenges Industry dominated by Mass Production

Factories in Far East set the rules:

• Min Order Qty 1000units+• Lead Times – 3-6 months +

Disconnect between Sales & Design in Europe & Nth America and Production in Far East. Flexibility and change are difficult to manage

Customization of technical workwear or performance wear is difficult to manage – changes can invalidate certification

Ability to Scale Customization historically has lead to expensive localised customization not globalised solutions

Net effect…

Pricing – factories charge significant premiums for small batch customized product or do not do it due to fabric and component MOQ’s

Inability to significantly scale small batch customization

Sales cycle are too long (6 months +)

Significant inventory issues

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Logicmix Software SolutionsLogicmix is a cloud computing company that develops mass customization e-commerce platforms for the apparel sector. The platforms link the user interface across the supply chain directly to the manufacturer a fully vertically integrated solution for mass customisation

Our software:

• Makes it easy for apparel brands to provide customized clothing to their customers (B2B and B2C), helping them to satisfy a growing market demand

• Helps our customers to significantly reduce their inventory holding, reduce their sales cycle and enhance their net margins

• Is built by people with a passion for innovation and delivered by people who have a deep understanding of apparel production and customization

Go To Market Strategy

• Build on traction in technical work wear sector but then also enter corporate wear, outerwear, sportswear markets and beyond…

• Targets are brands that currently have revenues from online sales of less than $180m per annum (larger companies will build their own (eg: Nike & Adidas))

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Vision

Transforming Products, Brands and Businesses with our meCommerce Cloud

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SolutionNext Gen. Software Platform built with the following key features:

Acts as a generic platform (i.e. Not a company’s proprietary system)

Supports Complex Customization Scenarios

In built patented certification engineAllows Designers to enhance/extend

design and product permutations using our builder module.

Supports a variety of product typesGreat Visualization Industrial Strength e-Commerce

featuresEnterprise System IntegrationManufacture Neutral – software

output (BOM, spec sheet) can be utilized by 3rd party manufacturer

Actual Screen Shots from S/ware

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Business Benefits Increase flexibility of sales model – enabling a high value customer experience

Faster cost effective product development and deployment times

Increase effective net margin

Reduce Lead times significantly

• Design• Quotation • Samples• Certification• Production

Reduce Inventory significantly

• For our customer• For their customers too

Improve Production Efficiency

• Consolidation/Planning on product, pre-production, component and production

Page 19: Customer Survey

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Primary Target Markets

Technical Workwear

Hi Vis/ Chemical/ Waterproof/ Anti Static

Market Size $5Bn

Non Technical Workwear /

Uniform Corporate Wear

Market Size $25Bn

SportswearOuterwearRainwear

MerchandiseFashion

Market Size $75Bn

2012 2013

Total Market Size $100 Bn

Customization Accounts for 9% of this market (20% of workwear / 5% of other)

$9 Bn

Wholesale Value of Customization market

$5.5Bn

Software Spend = 1.75% of wholesale value (1% of retail value)

$95m

Logicmix Target = 25% $24m

Addressable Market

Page 20: Customer Survey

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Solution Branding

Page 21: Customer Survey

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High Level Components Template Engine

Visual Product Configurator

• Which is embedded in SelectManager and SelectStore SelectManager

• A Desktop Application for • Sales• Customer Service Reps• Manager / C-Level

SelectStore

• Web Store for end-customers (who place order directly) SelectBuilder

• A Tool to help product engineer/Textile Engineer to create product templates

Page 22: Customer Survey

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Design Goals

Generic Platform

Visualization

Support Complex Customization

Product Variety

e-Commerce Features

Enterprise Integration Features

SelectEX

Competition

Page 23: Customer Survey

Template Engine

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The heart of Naboo

Initially with Textile/Garment Focus

Configurable BOM with very complex structures

• E.g. Selectable and customizable Detachable Items, Linings, Accessories• Almost every sub-component can be customized

Pluggable Certification Engine:

• EN471, EN343, ANSI107

Template Engine

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Template Engine Pricing Calculator

• Fixed• Cost Based Calculation based on configuration and material selection

Component Sharing Among different templates:

• Helps stream line and digitize companies’ entire catalog• Help customer to manage their product catalog by linking shared components

to different product/templates, parts (stocking items or CTO/BTO items), raw material

• Reduces Time to market for template

Page 26: Customer Survey

SelectManager

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Page 27: Customer Survey

SelectManager Desktop Metaphor

Yet still accessed via Web Browser

Option to package it as installable application (AIR maybe)

Geared toward more complex tasks

• Clerical Tasks like order processing• Managerial Tasks like BI, Complex Order Searches, Or Chart• Administrative Tasks like company, catalog, user, role, and system management

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SelectManager Login

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In this example, the user is browsing catalog by template, looking at configurations shared by others

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SelectManager Catalog Browsing

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The user is using advanced search to find orders that have been “approved”. The right pane is showing the search result details and its order history

SelectManager Search Order and Review

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The user is trying to push the order to the next “state”

SelectManager Order Processing

Page 32: Customer Survey

The Designer

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Page 33: Customer Survey

Visual Product Configurator/Designer For user to configure their end-product

Realistic Multi-View Visualization of product configurations

Skinnable

Real time Configuration Summary, Unit Price Calculation that are updated when a change is made to the configuration immediately

Save Designs

Email Design

Detail Design Summary

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User is configuring a panel color. On the right is a collapsible configuration summary and dynamic EN471 Class calculation. Its template engine to make sure all rules are enforced

Designer in SelectStore

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User is configuring a logo with Dynamic pricing based on logo types

Designer in SelectManager

Page 36: Customer Survey

SelectStore

Page 37: Customer Survey

SelectStore Purely target End User

One primary goal: Get the order

It is essentially a shopping cart but with configurable templates at its core rather than fixed products

• Design a piece of garment• Get a quotation• Confirming order• Check order status

Each store instance can have their own skin, URL, catalog, pricing, etc.

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Page 38: Customer Survey

Browse the store, pick a quick start design

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SelectStore

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Customize the details, step by step, change color, add logo, play around with options

SelectStore

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Add to shopping cart and check out with credit cards or paypal

SelectStore

Page 41: Customer Survey

SelectBuilder

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Page 42: Customer Survey

SelectBuilder

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This is a desktop application that targets Textile Engineers or Product Configuration Engineers to help them create advance templates more easily

Create Configurable BOM like structure for templates with ease

Manager Reusable Parts and Reusable Components

Rules definitions and management

Link to items from Part/Raw material database to use in templates

Import template design artifacts (pictures, drawings, vector graphics) to create the visualization of the product templates

Glue everything together and export deployable template to the platform

Page 43: Customer Survey

Assemblies also linked to visual resources

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SelectBuilder in Action

Page 44: Customer Survey

Add More Rules

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SelectBuilder in Action

Page 45: Customer Survey

When all the pieces are tied together, you get a highly visualized and highly configurable model

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SelectBuilder in Action

Page 46: Customer Survey

Customer Surveys

Page 47: Customer Survey

Demo/Concept Review• Top 10 Workwear Supplier in Europe• €180M Turnover• Product Champion – Gunter Messen (Alsico Managing Director)

Presented the demo to Gunter Messen on the 1st November 2012

Liked:• The template supply chain solution involved in our Mass Customisation platform• The Visualisation solution of our Platform• The end to end solution for Mass Customization

Concerns:• Cost of the platform• The effect the change to a template Mass Customized supply chain model may have

on his existing infrastructure.

Result: • Interested in a trial once we have finalised our software solution development.

Page 48: Customer Survey

Demo/Concept Review• Top 5 Workwear Supplier in France• €80M Turnover• Product Champion – Bruno Blanchard (Mulliez- Flory

Purchasing Director)

Presented the demo to Bruno Blanchard on the 3st November 2012

Liked:• The Visualisation solution of our Platform• The end to end solution for Mass Customization• Ability to consolidate small orders from templates

Concerns:• Cost of the platform• Could his own manufacturers get access to the system

Result: • Interested in a trial once we have finalised our software solution development, but

not necessarily pay for it.

Page 49: Customer Survey

Demo/Concept Review• Top 5 Workwear Laundry Supplier in Europe• €1.1Billion Turnover• Product Champion – Peter Taylor (CWS-Boco - COO)

Presented the demo to Peter Taylor

Liked:• The supply chain elements of our Mass Customization platform• Template model based design• The end to end solution for Mass Customization• Ability to consolidate small orders from templates

Concerns:• Internal resistance to changing existing design and product model• How to manage the transition from 9000 unique products to 50 Mass Customization

templates?

Result: • Interested in a trial once we have finalised our software solution development, added

us to possible tender list for upcoming project in this area.

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Summary Clear Strategic Direction;

Balanced risk/reward opportunity

Large and clear market opportunity

Logicmix enables:

• Focus on value added high margin returns• Expansion of customer profiles and sectors• Increased scalability

Logicmix well placed to execute due to:

• Low cost infrastructure• Management team in place• Support from existing customers

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AppendixAppendix 1 - Analyzing Failure in Mass Customization

Appendix 2 - Logicmix reduces risk of Mass Customization failures

Appendix 3 - Mass Customization Portals

Appendix 4 – More Product Info

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Analyzing Failure in Mass CustomizationBut on the other, there are two more specific reasons for failures of MC companies, according to our research:

First, difficulties encountered by the studied MC companies may be ascertained to possible inadequacies of their toolkits. Many of the toolkits that we studied do not follow the design principles suggested as success factors by previous research: Only 55% instantly visualize consumer input, less than 20% of vendors make use of peer input in the design process, 61% do not provide information on progress of purchasing process. Only 22% allow customers to share their creations with others, just to mention a few shortcomings. The reality of toolkits clearly falls behind the academic research on design parameters of successful toolkits, suggesting a large shortcoming in transferring research into practice. Secondly, problems in making mass customization work may also lay elsewhere. In an exploratory survey of 68 entrepreneurs and consultants active in the MC business (conducted in Oct. 2009), for instance, we discovered that detecting customer idiosyncratic needs and creating flexible fulfillment processes are considered as more serious concerns (average score=4.0/5 and 3.9/5) than creating toolkits that support the sales process (average score=3.5/5). This research, the preliminary results of the Customization500 study, and many interactions with managers during case-study based research show that profiting from mass customization is not an easy task!

The MC Graveyard: Ideas that did not make it: YouTailor & Shirts Ontheflyhttp://mass-customization.de/customization_trends/

For the full stories about YouTailor and SHIRTS ONTHEFLY , head over to egoo.com by blogging colleague Heiko Vogelgesang !

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Logicmix reduces risk of Mass Customization failures

“First, difficulties encountered by the studied MC companies may be ascertained to possible inadequacies of their toolkits.”

Logicmix Designer Module, Manager Module, Mobile Module and provide a comprehensive toolkit for nearly all mass customization scenarios'

“detecting customer idiosyncratic needs and creating flexible fulfillment processes are considered as more serious”

Logicmix Builder Module and manage module, manage the information and supply chain complexities of customization.

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Mass Customization Portalshttp://mass-customization.de

http://www.egoo-journal.com/

http://mass-customization.info/