The future role of technology in textile and apparel manufacturing (continued series on changes in manufacturing)
According to the most recent findings of McKinsey & Company (international consultancy) – authors Anshuk Gandhi, Consultant in McKinsey’s Southern California (USA) office, Carmen Magar, consultant in the New York office, and Roger Roberts, a principal in the Silicon Valley (USA) office – there are seven technologies imperatives to tailor (textile) products and services to the needs and wants of individual customers, and this still on a profitable basis
Let us first have a look into the world of consumers: Since Henry Ford’s first car Model T, buyers could pick any colour – as long it was black! After Ford’s single product became standard specifications for different consumer segments, conclude the McKinsey authors, for example, clothes in different sizes and colours. Over the last decade, there are features that allow each shopper to customise his or her product or service with a range of components, for instance, when ordering a car, computer, or smart phone. Such configured mass customisation will reach ever greater levels of sophistication by means of advanced and more sustainable technology. Actually individualised customisation appears ante porta. This next wave will allow the building of a unique product for each customer, such as custom suits and shirts made to fit your body’s shape. However it proves hard to achieve profitability at scale. Success report start-ups or from niche plays by established corporations, but there are many examples of costly failures. How to reach profitability Profitable mass customisation of products and services, whether these are unique for each customer or the ones that consumers can configure extensively to their needs, requires success in two broad areas, according to the McKinsey authors. Firstly, an identification of opportunities for customisation is needed, supported by smooth, swift, and inexpensive transactions for both consumers and manufacturers. TextileFuture adds that various textile machinery manufacturers have accomplished such levels, offering a standardised product, retrofitting tools and specific individual machinery meeting exactly the requirement of each customer. They meet also the second aim, that is achieving a manageable cost structure and cost level for the manufacturer even as manufacturing complexity increases. A good example is Swiss Rieter SpunYarn Systems that has invested successfully over the past two years and is about to consume the fruit of these efforts even under the aspect that the complexity in manufacturing increased.
Generally, the described goals are also the result of emerging or improved technologies, helping to address economic barriers to respond to consumers’ exact needs in a more precise way. In other areas, online configuration technology can easily, cost effective assemble customers’ preferences. 3D digital modelling lets shoppers envision the final product. This is already widely used by apparel makers and online shopping, and increasingly affordable and scalable. In manufacturing, dynamically programmable robotic systems can switch between models and variants, with little loss of efficiency.
There are also other trends. In recent years, hundreds of start-ups have created successful business models for providing customised goods, although barely at scale. Moreover, the generation that has grown up with the Internet and its personalised delivery of information and recommendations is likely to demand tech-enabled personalised products. The benefits for successful companies are compelling, not least for global brands struggling with a decrease in loyalty after the economic and financial crises, and eager to avoid a painful race to the bottom of the cost curve in globalised and standardised product arenas.
Mass customisation has the potential to help companies increase revenue and gain competitive advantage, improve cash flow, and reducing waste trough on demand production. Mass customisation can also generate valuable data that may be used in development of standard products and in online marketing and image campaigns.
The authors have divided such technologies into two groups that correspond with the success factors identified before, those that make it easier to create customisation value for the consumer and those that control costs for the manufacturer, despite the challenges of manufacturing complexity.
How to create customisation value
To create a sustainable, scaled offering, the value of customisation must go beyond the novelty effect and have a functional or aesthetic purpose, usually based on preference dictated by biology (for instance body shape, DNA, and dietary requirements) or taste (in design or taste, or functionality). Mass customisation has configured and individualised applications across industries, including apparel and health care, as can be had from
Table 1 Customisation is possible in many industries
Before launching customised products, one must understand what customers want to individualise and what components they want to configure (for textile products, such as type of fabric, shape of a collar, or the thread attaching buttons, accessories, etc.), consequently, which options should be offered and how they should be priced. What used to entail a costly conjoint analysis to define the solution space, can now be done much more easily with the help of new technologies, many of these also make the transactions required for creating customisation value smoother, swifter, and less expensive.
Social technologies competence
Social media and crowd sourcing are not new, but they pave the way for better customisation options, by allowing companies to analyse the value that consumers attach to existing or proposed components of current or hypothetical “virtual” products (for instance Starbucks with frappuccino.com).
By allowing customers to create real and virtual products, companies can in effect use customers as marketers and co-creators. Social technologies empower customers to broadcast their creations to a large network, which is essentially free marketing for the company whose products they are promoting. This is uniquely suited to customise products, as many consumers are proud of their creations.
Interactive online product configurators
Online configurators are at the heart of the mass customisation trend, because they provide a user-friendly and speedy way to gather a consumer’s customisation preference. Of course, online configurators have been around for years, user interaction in the past was limited to selecting a few configuration options in a form. Any advanced configuration was cumbersome and expensive, often requiring a salesperson to discuss options and selections with the customer. Today, advances in product visualisation and the increased speed and adaptiveness of configuration software have made product configuration engaging, and many consumers describe this procedure as a fun experience.
One example is Shoes of Prey, a website that lets its users configure custom shoes. Users choose from 12 general shoe types, from flat to ankle boot. After selecting a type, different designs for the toe, back, heel, and decorations are offered, with each click automatically updating a preview in the centre of the screen. The most engaging part is when users click on the different elements of the shoe to select colours and fabric types. The shoe spins around after every selection, as if to celebrate the choice. A “trending now” page shows a seemingly endless list of shoes that are designed by site users, with several updates every minute, attesting to the fact that users of the site are having fun. Shoes of Prey found that more sophisticated models of the customised product increased conversion rates online by 50 %!
3D scanning and modelling
The shape of real world objects can be analysed by 3D scanners, which collect data that can be used to construct 3D digital models. These scanners make it much easier to measure, for example, a human body for individualised products that are tailored to fit (e.g. clothes, jeans). Several companies have created scanning software that gathers exact body measurements in seconds or minutes, which can then be rendered into an online personalised 3D model. Traditionally, these technologies have been expensive, hard to install, and difficult to roll out at scale. Companies like Styku that perform these scans are now using off-the-shelf technology to achieve total hardware costs under USD 3000. It has to be added that the accuracy of the resulting measurements is often better than those of hand measuring. Styku has sold a large number of the resulting 3D measurement terminals to retailers all over the USA.
Another company, the start-up Coinstrvct, invites consumers to enter their measurements into a form on its website and then generates an online 3D model showing what a certain dress would look lie on their body shape. This reduces some uncertainty on the part of the consumer as to whether a garment would fit well with the customisation options selected. In the future, 3D scanning and modelling might move directly into the home, giving consumers the ability to scan themselves, upload the 3D model, and start ordering clothing “tailor made” just for them.
E-commerce software has for years been able to recommend product choices based upon previous selections. Recommendation engines are now moving into the customisation space by helping customers configure products. For instance Chocri operates a site called createmychocolate.com that customises and ships chocolate bars, helping consumers configure their own bars from four base chocolate and 100 different toppings. Chocri estimates that its recommendation engine has increased the rate of conversion on actual online order by more than 30 %.
Smart algorithms for dynamic pricing
On demand custom orders can often challenge companies with unpredictable spikes in demand, resulting in long wait times, which in turn are a potential deal breaker for consumers. Some companies are managing on demand capacity by using smart algo0rithms and better data-processing capacity to enable dynamic pricing, thereby reducing the time consumers have to wait.
Controlling manufacturing cost
Technology has driven and will continue to drive dramatic productivity and flexibility improvements in manufacturing. Modularisation of product designs, advanced back office software, and flexible production technology already have the power to reduce the cost of mass customisation.
Traditional technology for enterprise resource planning and supply chain management (SCM) was designed to enable sales and manage production of a limited variety of products with clearly defined input components. Translating an individualised order from a single customer into a custom picking list and assembly instructions for warehouse and production workers was a big challenge. Now companies like Just in Time Business Consulting and Configure One have developed packed software that enables tracking of individualised design features in customer orders and their translation into sourcing and production instructions. These tools connect the configurators at the front end with the production and SCM systems. This does not only mean that the production staff knows what to assemble, it also means that customers are promised realistic lead times and progress updates. They are not served up any options for which the components are not in stock. These back office software changes can thus effectively enable smooth production of vast variety.
Flexible production systems
However flexible manufacturing systems are essential to making small batch production of mass customisation profitable. The automotives, Ford and General Motors have invested in dynamically programmable robotics with interchangeable tooling that can switch agilely between models and variants, with no loss of efficiency. Companies from other industries adapting these technologies, for instance Caterpillar’s production system, it cuts out shoe parts according to customers’ measurements with an automated, computer guided cutter.
Furthermore, 3D printing is truly changing the way we think of manufacturing (see also the issue of TextileFuture’s Newsletter from February 18, 2014
There is more to come: manufacturing, supply chain, and logistics functions will benefit from the broad penetration of digital sensors and smart tags that will offer greater potential for visibility, flexibility, and control of product flows, as well as for automation of tasks that enhance product value. It is broad trend toward what is known as the Internet of Things, which blends sensors, standards based networks, and smart analytics to enable new information architectures for optimising production. Imagine for example products that adapt to their users’ habits and usage, or the use of predictive analytics to ensure parts or modules are automatically replenished when they are approaching end of life or failure.
The falling capabilities of connected sensor driven systems can make these techniques, applied to expensive equipment such as larges turbines today, applicable for consumer goods. Modular design, coupled with new manufacturing and logistics’ chains, will allow business to break the traditional compromise made between variety and production cost.
True scale in mass customisation can only be achieved with an integrated approach, where technologies complement one another across a company’s various functions to add customisation value for the consumer, bring down transaction costs and lead times, and control of the cost of customised production. The prerogatives can be had from
Table 2 The fundamental, coordinated changes across six major business functions
The McKinsey authors conclude: The technology platforms that come together to enable mass customisation could rejuvenate stagnant markets and help companies pioneer new opportunities that deliver attractive growth and margins. However, to shape this next wave of mass customisation, leaders must work closely with business unit, IT, and other functional managers to create a new integrated business model that can harness the power of new technologies to cost efficiently serve consumers and customers on the exact needs they have. While many will start with pilots to prove the potential, this shift will require a true commitment to break many established orthodoxies. However, the rewards will be great for those that lead the change!”
TextileFuture wishes to add that again textiles, clothing and textile machinery are at the forefront in integrating these capabilities in their own manufacturing and company organisation. It makes these industrial sectors important forerunners by giving impetus for other industries.