7 11, 2013

New Book Co-Authored by Prof. Piller: Discontinuous Innovation – Learning to Manage the Unexpected

By | 2018-06-14T06:33:52+00:00 November 7th, 2013|Books|

P803.cover"Discontinuou Innovation", authored by Peter Augsdörfer (Technische Hochschule Ingolstadt, Germany), John Bessant (University of Exeter, UK), Kathrin Möslein (Universität Erlangen-Nürnberg, Germany), Bettina von Stamm (Innovation Leadership Forum, UK) and Frank Piller (RWTH Aachen University, Germany) is based on the findings, issues and questions related to an ongoing decade-old research project named the Innovation Lab. The research project focuses on discontinuous innovation in more than thirteen countries, most of which are European, and provides useful insights into its different challenges.

It also raises several questions related to the subject, some of which are: how do firms pick up weak signals on emerging — and possibly radically different — innovation? What should firms do when these weak signals hit their “mainstream” process? What are the criteria for allocating resources to a strategic innovation project? What actions should firms take to avoid being left out by the “corporate immune system”? How should firms organize projects that often break existing rules and require new rules to be created?

This book attempts to provide answers to the above mentioned questions by gathering information from the research project and also from firms that have tried exploring various ideas, models and insights to tackle discontinuous innovation. Written in a simple and accessible manner, this book will be of interest to both practitioners and academics alike.

You can find an extensive sample chapter on the official website!

Contents:

  • Learning in the Discontinuous Innovation Laboratory
  • Radical, Discontinuous and Disruptive Innovation — What's the Difference?
  • Part I:
    • Looking Beyond the Lamp-Post
    • Ambidexterity in the Search Phase of the Innovation Process
    • Unpacking Exploratory Innovation: Search Practices, Organizational Context and Performance
    • Organizing Discontinuous Innovation at Established SMEs
    • Discontinuous Innovation Search for SMEs and Large Organisations
    • The BMW Group Co-Creation Lab: From Co-Creation Projects to Programmes
    • Strengthening the Role of the Users
  • Part II:
    • Netnography in the Food Industry
    • Selection Strategies for Discontinuous Innovation
    • Selecting Discontinuous Innovation in Practice
    • Innovation Buy-In at Schneider Electric: The KIBIS Method
  • Part III:
    • Implementing Discontinuous Innovation
    • Strategic Flexibility, Culture and Measurement as Organisational Enablers
    • Coloplast: Fixing Broken Hearts?
    • Implementing Discontinuous Innovation within Philips Lighting
    • Fighting the Unknown — With Business Design
    • Center of Excellence: One Way to Implement Discontinuous Innovation
    • Munich Airport: The Success Story of InfoGate
  •  

    10 07, 2013

    [Recommended Read] Leading Open innovation: New edited MIT book on co-creation and open innovation

    By | 2018-06-14T06:46:51+00:00 Juli 10th, 2013|Books|

    Today we are featuring one of the new volumens published by MIT Press. Leading Open Innovation gives the reader a comprehensive oversight of Open Innovation in its practical applicaton, with many examples and a lot of experience contributed by leading open innovation experts from academia and industry. Amongs all those, I was honored to contribute a chapter as well.

    LeadingopeninnovationLeading Open Innovation
    Anne Sigismund Huff, Kathrin M. Möslein, Ralf Reichwald (Editors)

    Published at MIT Press

    Vailable from Amazon.com

     

    In today’s competitive globalized market, firms are increasingly reaching beyond conventional internal methods of research and development to use ideas developed through processes of open innovation (OI). Organizations including Siemens, Nokia, Wikipedia, Hyve, and innosabi may launch elaborate OI initiatives, actively seeking partners to help them innovate in specific areas. Individuals affiliated by common interests rather than institutional ties use OI to develop new products, services, and solutions to meet unmet needs.

    Leading Open Innovation describes the ways that OI expands the space for innovation, describing a range of OI practices, participants, and trends. The contributors come from practice and academe, and reflect international, cross-sector, and transdisciplinary perspectives. They report on a variety of OI initiatives, offer theoretical frameworks, and consider new arenas for OI from manufacturing to education.

    Contributors:
    Nizar Abdelkafi, John Bessant, Yves Doz, Johann Füller, Lynda Gratton, Rudolf Gröger, Julia Hautz, Anne Sigismund Huff, Katja Hutter, Christoph Ihl, Thomas Lackner, Karim R. Lakhani, Kathrin M. Möslein, Anne-Katrin Neyer, Frank Piller, Ralf Reichwald, Mitchell M. Tseng, Catharina van Delden, Eric von Hippel, Bettina von Stamm, Andrei Villarroel, Nancy Wünderlich

    Leadingopeninnovation2

    27 03, 2013

    [New German Book] Praxishandbuch Technologietransfer: Innovative Methoden zum Transfer wissenschaftlicher Ergebnisse in die industrielle Anwendung

    By | 2018-06-14T06:48:08+00:00 März 27th, 2013|Books, Technologies & Enablers|

    German post about our brand new German language book on new methods for university-industry technology transfer!

    CoverPraxishandbuch Technologiemanagement
    Innovative Methoden zum Transfer wissenschaftlicher Ergebnisse in die industrielle Anwendung

    edited by Frank T. Piller & Dennis Hilgers
    Symposion Publishing, Düsseldorf, ISBN 978-3-86329-595-0

     Methoden_280Rund 70 Milliarden Euro werden in Deutschland jährlich für Forschung und Entwicklung ausgegeben. Dennoch gelingt es nicht immer, die gewonnenen Erkenntnisse in erfolgreiche Innovationen umzusetzen.

    Das Praxishandbuch Technologietransfer stellt neun innovative Methoden und Ansätze vor, die neue Impulse für den Erkenntnis- und Technologietransfer aus der wissenschaftlichen Forschung in die industrielle Anwendung geben. Ein Expertenteam aus verschiedenen Institutionen stellt die Methoden anschaulich vor, gibt Tipps für ihre praktische Anwendung und zeigt Wege zu ihrer Implementierung.

    Das Buch richtet sich an Mitarbeiter in Technologietransferstellen, Verantwortliche in wissenschaftlichen Instituten, bei Projektträgern und Förderinstitutionen, an Wissenschaftler, die selbst aktiv Transfer betreiben, und an Gatekeeper und Schnittstellenverantwortliche in Unternehmen.

     Weitere Informationen finden Sie bitte in der
    offiziellen Buchvorstellung

    12 02, 2013

    New book: Intelligent Non-hierarchical Manufacturing Networks

    By | 2018-06-14T06:48:20+00:00 Februar 12th, 2013|Books|

    A recently released book presents a number of results from a few related, EU-funded research projects on agile and flexible manufactuing networks. It combines the work by a large number of scholars. Amongst these, my colleague Frank Steiner and myself have provided a chapter on "Mass Customization as an Enabler of Network Resilience". A full table of contents can be found here (external link).

    INet_BookIntelligent Non-hierarchical Manufacturing Networks
    Editors: R. Poller, L.M. Carneiro, T. Jasinski, M. Zolghadri, P. Pedrazzoli

    Published by and availible from: ISTE Wiley

    ISBN: 9781848214811

     $: very (too) expenise, I am afraid.

    The editors' summary of the book describes its content really well so there is not much point in rewriting it all from scratch:

    This book provides the latest models, methods and guidelines for
    networked enterprises to enhance their competitiveness and move towards
    innovative high performance and agile industrial systems.

    In many markets, competitiveness and economic growth rely
    greatly on the move toward innovative high performance industrial
    systems and agile networked enterprises through the creation and
    consolidation of non-hierarchical manufacturing networks of
    multi-national SMEs as opposed to networks based on powerful large-scale
    companies.

    Network performance can be significantly improved through
    more harmonious and equitable peer-to-peer inter-enterprise
    relationships, conforming decentralized and collaborative
    decision-making models.

    Traditional hierarchical manufacturing networks are based on centralized
    models, where some of the actors involved must adapt themselves to the
    constraints defined by those who are most dominant. Real-world
    experiences of such models have revealed some major problems due to the
    centralized vision of the supply chain and the sub-optimal performance
    of centralized decision-making. For the current highly dynamic markets,
    this generates major inefficiencies in operation throughout the supply
    chain.

    This book collects the latest research regarding non-hierarchical
    manufacturing networks and provides enterprises with valuable models,
    methods and guidelines to improve their competitiveness.

    29 01, 2013

    MC2012 Tagungsband erschienen: Profitieren von Kundenintegration

    By | 2018-06-14T06:48:29+00:00 Januar 29th, 2013|Books, Customization Trends, Events, Personalization|

    Product_thumbnail(Sorry, German posting on German book) Die MC2012 war die größte Konferenz zu den Themen Mass Customization (individuelle Massenfertiung) und Kundenintegration im vergangenen Jahr. Wir berichteten an dieser Stelle ausführlich sowie via Twitter live aus dem Konferenzzentrum.

    Nach dem großen Erfolg der Veranstalung in Salzburg und der angeschlossenen Fachbesucherausstellung ist nun der offizielle Tagungsband erschienen. Auf 139 Seiten werden neben den Originalpräsentationen aus der Konferenz die zentralen Themen von Prof. Frank T. Piller (RWTH Aachen), Prof. Dominik Walcher (FH Salzburg) und Dr. Paul Blazek (cyLEDGE Media) zusammenfassend besprochen, die mit der MC-Konferenz 2012 bereits zum zehnten Mal ein Forum für internationale Fachteilnehmer aus Wirtschaft, Industrie und Forschung präsentierten.

    Der Tagungsband "MC2012 – Profitieren von Kundenintegration" ist ab sofort als Downloadedition über Lulu sowie in Kürze über Amazon verfügbar.

     Aber hier schon ein paar Photoimpressionen der Veranstaltung …

    6a00d83453b37069e2017742f03701970d-700wi

     

    19 12, 2012

    [Interview] Anthony Flynn & Emily Flynn Vencat, Authors of „Custom Nation“

    By | 2018-06-14T06:49:01+00:00 Dezember 19th, 2012|Books, Customization Trends, General, Interview, Personalization|

    Emily
    Anthony_FlynnAs promissed in our recent book review of Custom Nation, authors Anthony Flynn and Emily Flynn Vencat, participated in our interview series with MC&OI entrepreneurs to share their experiences in the customization market, their book and who could profit most from reading it.

     FTP: Can you tell a little bit about yourself? What do you do and where did/do you get your experiences with mass customization from?

    ANTHONY: I’m the founder and owner of YouBar, the world’s first customized nutrition bar company. I started the company in 2006 after feeling frustrated by my inability to find an off-the-shelf nutrition bar that met my – admittedly very specific – health and taste needs. So, I started custom-making bars for myself, and I thought there would be a huge market for bars made to meet individual consumers’ own unique needs and, out of that, YouBar was born.

    Since then, I’m extremely proud to say that I’ve grown the company to seven-digit annual sales, and now employ 30 people in an 8,000 square foot facility in downtown Los Angeles. Thanks to my success with mass customizing, several years ago I started being invited to give talks on customizing to universities around the country (from UCLA to MIT), and have become a consultant to companies looking to add an element of customization to their existing mass-production based business models.

    There has been so much interest – and this extended to the press too: I’ve given interviews to hundreds of news organizations, including the New York Times, Good Morning America and NPR – that I saw that there was a real need for a book to be written about how customization is changing the way we do business in the 21st century. But I’m not a writer, and that’s where Emily came in…

    EMILY:  That’s right. Several years ago, Anthony – who in addition to being my co-author is also my brother – came to me with the idea for this book. At the time, I was working as a business journalist in London – I was Newsweek’s London-based business writer and, after that, was a business writer at the Associated Press — and Anthony told me he wanted me to write this book with him. At first, I was extremely sceptical (and also very busy!), but the idea was so compelling that it didn’t take long before I was convinced and we signed with our publisher last year.

    FTP: On the early pages of your book you tell us that "outline exactly how you too can use customization to launch a successful new business, or exponentially increase sales in your existing business". That sounds like a pretty ambitious promise. Have you found the holy grail of retail?

    ANTHONY: I don’t think we’ve “found” the holy grail of retail. I think it’s been there all along. If you think about the way that the very rich have always consumed goods, you’ll see this. The wealthy have never really bought into the idea of consuming mass-produced stuff en masse – they’ve always had everything important custom made-to-order – from their furniture to their homes to their suits.

    What’s new, and what I think we’ve “found” in our book is that – thanks to new technologies, like the internet’s ability to connect producers directly to retailers, the advent of online configurators and new production methods – high quality custom goods are now affordable to the average person (and not just the super-rich) for the first time in history. Because this shift is so new, however, many companies haven’t yet embraced it or figured out how to do it right. Our point in the book is to provide a guide for how to do exactly this.

    FTP: You also write about a shift from DIY (Do It Yourself) to CIY (Create It Yourself). What exactly do you mean by that?

    EMILY: Before the Industrial Revolution, custom goods were actually the norm – even for the very poor — because Americans did everything themselves, like cook their own dinners, make their own furniture and sew their own clothing. What’s new about today’s customization is that it isn’t Do-It-Yourself (DIY); it’s Create-It-Yourself, or what we like to call CIY. Create-It-Yourself is when you get to do all the fun parts related to making something new, like designing the flames emblazoned on the side of your Mustang or choosing the exact ingredients in your gluten-free nutrition bars, without having to do the hard work of stencil painting or wheatless cooking yourself. Using online configurators, consumers can now participate in the high-level design of their products without having to get their hands dirty.

    FTP: Without revealing too much from your book: Where do you see the most critical failures companies make when implementing or maintaining an MC strategy?

    ANTHONY: The number one problem that I see and hear about again and again when companies begin customizing is that they start off giving their customers too many choices. Just because you run a customizing company, and want to give your customers choices to match their exact needs, doesn’t mean that you need to offer a million different colors or sizes or whatever. Earlier this week, I spoke to an executive at Nike who told me that it’s actually Nike’s goal right now not to add more customization to its excellent custom sneakers platform, NikeID, but actually, rather, to make it “simpler.” When you give your customers too many choices, they can find it overwhelming and difficult to engage with. What’s more, from a business perspective, if you offer too many choices you can end up painting yourself into a corner financially.

    FTP: And how do you think these shortcomings could be prevented?

    ANTHONY: In Chapter Nine of the book, we outline the “Seven Lessons” for how to get customization right, which we derived from our interviews with the CEOs and founders of many of the world’s most successful customizing companies, including Vistaprint’s Robert Keane and Shutterfly’s Jeff Housenbold. I think all of these lessons are absolutely crucial, but – as implied by my previous answer – one of these lessons is that, even in the customizing model, a business should never give consumers too many choices. We give concrete details, examples and advice in this chapter about what exactly that means. Here’s just one basic example of limited choices in action: on the Ford Mustang Customizer website, consumers can choose from dozens of hood designs and paint jobs, but they don’t pick the materials used in the engine.

    FTP: In your book you talk about the "automated expert". What do you mean by that?

    EMILY: One of the most important technological developments that has made mass customization possible is the advent of online design tools – also known as “configurators” – which allow customers to go on websites and create their own products without needing the help of a human expert.

    In the 20th century, one of the main reasons that customization was the preserve of the ultra-wealthy was that if you wanted to custom design something, you needed an expert at your elbow to help you turn your idea into real image. If, for example, you wanted to design a suit, you needed a tailor. If you wanted to design a ring, you needed a jeweller… and so on. Imagine, for example, trying to sketch your perfect suit or ring without expert help. For the vast majority of us, our basic drawing skills and lack of knowledge about how materials work would make this utterly impossible.

    And human experts are expensive. But now, configurators allow even the non-expert consumer to go online and use automated tools to create-their-own suit or dress or jewelry or interior design – this list goes on and on – without needing an expert on hand. The configurator is, in essence, the affordable automated expert.

    FTP: Can companies save themselves from some painful experiences if they read your book before acting? 

    ANTHONY: Absolutely. Our lessons for how to customize identify pitfalls, like the problem with too much choice or the potential difficulty with choosing a price-point for your custom good, that are extremely easy to navigate once you know they’re there, but almost impossible to avoid if you don’t know about them. Honestly, I wish that someone had written this book seven years ago so that I could have read it before starting YouBar and avoided making so many of these costly mistakes myself in the first year of my business.

    FTP: Where do you think mass customization is going? And what does still need to be done to make it an even more successful movement?

    EMILY: In the next ten years, we are going to see a shift in what’s considered ‘normal’ in retail. In dozens of important industries, the ‘normal’ thing we buy is going to go from being a mass-produced item to being a made-to-order customized item.

    The shift is actually already heavily underway in the auto industry, and its quickly coming in apparel, accessories and entertainment. For proof of this, you only have to look at the way young consumers – those under the age of 30 or so – are already buying things. Young consumers no longer see customization as a luxury in many parts of their lives, they just expect it. Instead of listening to entire mass-produced CDs, they tune into completely customized playlists care of iTunes or the popular custom radio station Pandora.

    Instead of watching pre-set television channel line-ups, they watch on-demand digital recordings on Netflix and YouTube. Instead of driving identical cars — like the Baby Boomers once did with their one-size-fits-all 1960s VW Beetles – they purchase custom, built-to-order Scions on the company’s customizing website. In fact, Scion isthe most popular car brand in America with buyers aged 18 to 27, and I’m sure this is because of its great, and affordable, customizing platform. If you look closely, there isn’t a single aspect of young consumerism that isn’t starting to be customized.

    The Millennial generation gets custom dating recommendations from matchmaking websites, like Match.com, they have custom sneakers on our feet (from brands like Nike and Converse), custom sweatshirts on their backs, custom cases for their iPhones and custom newsfeeds from social networking sites like Facebook.

    FTP: Is mass customization for everybody?

    ANTHONY: Yes. There isn’t a single industry that won’t be transformed by the shift to customization within the next decade. Already, we’re seeing every major company – even the most classic mass-producers — target their advertisements in customized, individualized ways online. This is the first large and important step towards thinking about consumers as unique individuals and not a single mass with homogenous tastes and values, as was the 20th century norm. 

    FTP: Thank you both for this really insightful interview! 

    19 12, 2012

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

    By | 2018-06-14T06:49:06+00:00 Dezember 19th, 2012|Books, Customization Trends, Personalization, Service Customization|

    Banner"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!

    BookcoverCustom 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.

    26 11, 2012

    [Interview] Joe Pine on Mass Customization, His Hands-On Workshop And His Newest Project

    By | 2018-06-14T06:49:20+00:00 November 26th, 2012|Books, Customization Trends, Events, Interview|

    PineLast week we hinted you at a great series of hands-on workshops by Joe Pine and Jim Gilmore. Now we had the chance to get some of Joe Pine's precious time for a short yet insightful interview on Mass Customization, his workshops and what the new project he is working on right now.  

    FTP: Joe, with Mass Customization being the business trend of the decade (at least!) there are a myriad of workshops by a lot of more or less qualified experts. While you are without doubt one of the best to learn from, can you go into detail a bit about what sets your workshop apart from the competition?

    JP: My "How To Mass Customize Your Offerings" Workshop on May 30, 2013 — the last of a series of six "how to" workshops my partner Jim Gilmore and I are doing — is based on the ideas and frameworks that I have developed over the past 20 years since Mass Customization was first published. So one is this grounding in my core frameworks. The second differentiation is the how to part; it will be a workshop where participants (not attendees) actually get to wrestle with those frameworks and develop ideas for their own businesses. And finally, it will be solely focused on mass customizing goods; those who wish to mass customize services and especially experiences will also gain great value!

    FTP: You are one of those with a hand on the pulse of MC-Development. Not to take away from your workshop of course, but are there any exciting new developments or trends that you can give our readers a little exclusive hint at?

    JP: One new framework I have — never published — shows that mass customizing down to the individual, living, breathing customers is not the end goal! It's not just about serving markets of one, where every customer is his own market. No, we need to reach further and recognize that every customer is multiple markets. We need to recognize what market an individual customer — and this applies especially to business customers — is in before we can hope to mass customize to meet that customers' needs at this moment in time.

    I also believe the rise of digital manufacturing in general and 3D printers in particular opens up huge new avenues for Mass Customization now and into the future, something I actually get into in my first workshop, How To Stage Engaging Digital Experiences, on December 6, 2012. 

    FTP: You have been following the MC idea for a long time now. While the idea certainly evolved from a niche concept to a mass(!) movement, what do you think will the future hold for MC and its implications especially on the retail landscape?

    JP: I fully believe that Mass Customization will be as important to 21st-century businesses as Mass Production was to 20th-century businesses. And if you think about the fact that Ford Motor Company did not pull everything together into the first Mass Production assembly line until October 1913, we still have long way to go! And one direction to go in is to bring Mass Customization into retail stores themselves, such as we already see with companies such as Build-A-Bear, Paris Miki, Lenscrafters, and the like. Absent that possibility, retailers need to put design tools into their stores to form the core of a design experience, such as done by Nike, adidas, Bloomingdales, and so forth.

    FTP: You are well-known for a number of great books on MC. Are you, by chance, working on something new for those eagerly awaiting a new volume from your hands?

    JP: But of course! I am always thinking and working on something new, and in this case it is working with my Infinite Possibility co-author, Kim Korn, who has developed some compelling insights and amazing frameworks around what management needs to become to meet today's corporate needs. As Mass Customization is supplanting Mass Production, we al2so need to supplant the old command-and-control ways of managing, yielding what Kim calls "regenerative managing," the goal of which is simple: to thrive indefinitely. 

    11 09, 2012

    [Book Review] The Innovation Machine – a practice-focused way to implement a corporate innovation management system

    By | 2018-06-14T06:53:57+00:00 September 11th, 2012|Books, Open/User Innovation|


    TheinnovationmachineRolf Wentz
    has been a C-level manager and CEO in many large corporations, mainly in the field of FMCG. Today, he worrks as an active investor in start ups.We have the privilege to have him in our ranks of lecturers of practice at RWTH Aachen.

    Dr. Wentz has been author of a successful German book on innovation management. Now, this book has been translated into English, in a new and updated version with plenty of case studies.

    The Innovation Machine, by Dr. Rolf Wentz. Published by CreateSpace, 2012.

    In order to launch successful
    innovations on a sustainable basis in frequent order, most
    companies have to transform themselves. What they need is an innovation
    management system whose components are consistent and, preferably,
    self-reinforcing. Vision, objectives, strategy, culture, process,
    structure & systems and competencies must be aligned.

    In his book Rolf Wentz
    demonstrates how the world´s best innovators such as Apple, Google,
    Microsoft, IBM, Toyota, Amazon, GE, Procter & Gamble, Samsung, BMW,
    3M
    etc., which the author calls innovation machines, succeed at this.
    By means of various case studies and based on his own practical
    experience, Wentz describes how the use of the innovation
    management systems will make a company successful, and he lays out the
    change management to transform firms into innovation machines.

    In
    doing this, he uses storytelling and the vivid language of a
    practitioner. The conclusions and main indicated actions at the end of
    each chapter plus worksheets and checklists support the practitioner in
    the implementation.

    WentzIn an online interview, we asked Rolf Wentz some questions about his new book — and innovation management in general.

    FTP: Innovation
    as a critical element of any future-ready corporate strategy is not new to most
    companies. Likewise there is a large number of more or less useful books on
    that topic. What sets “The Innovation Machine” apart from the myriad of already
    existing innovation guides?

    RW: "The Innovation Machine" differs from other books on
    innovation management in three major aspects: (1) I take a holistic view, i.e. do not only deal with some selective aspects of innovation management
    but cover all relevant components that make up the innovation management
    system such as vision, objectives, strategy; culture; process; structure &
    systems and competencies.

    (2) The "Innovation Machine" makes use of a large number of extensive
    international case studies of top innovators in order to illustrate the key
    points about the innovation management system. Although the case studies
    of  U.S. companies still constitute the majority, the book also offers
    various case studies of European (Zara, Nestlé, BMW, SAP) and of
    Asian innovation champions (Sony, Toyota, Samsung, Hyundai).

    (3) Based on my long experience working in leading
    managerial roles inside multinational companies like P&G, SC Johnson
    and Campbell´s, and now as a business angel, I focus on the practical challenges of innovation management.

    FTP: In
    your book you demonstrate successful innovation based on cases like Apple,
    Google, Microsoft and other certainly successful but also rather large
    multinational corporations.  Are the implications drawn from these cases
    relevant (or, useful) for SME as well?

    RW: Absolutely. Most of the implications such as those concerning vision,
    innovation objectives, innovation strategy, innovation culture, innovation
    process and innovation structure are also very relevant for SMEs which
    typically have limited innovation resources and, in particular, a limited
    innovation budget. 

    Just to illustrate this by means of one
    example: major progress can be achieved by SMEs by e.g. starting a radical
    innovation effort with a tiny two-person team (e.g. one engineer, one
    commercial person) with the two team members being co-located and fully
    dedicated to the project. The required resources and budget will
    be manageable for a SME. There are only some few recommendations that,
    because of their more elevated cost, are more useful for larger corporations
    than SMES such as the acquisition of competencies via the acquisition of other
    companies.

    FTP: How did you adopt your book from your earlier German boon into a new English edition?

    RW: Although “The Innovation Machine” (in English)
    builds on the same conceptual foundation as “Die Innovationsmaschine” (in
    German) ,it hast been vastly updated and modified in some major aspects.

    In
    particular, I have added a completely new chapter about innovation competencies
    (Chapter 11), majorly enriched the chapter on structure and systems for
    managing innovations (Chapter 10), and added many new case studies such as
    those of Amazon, BMW, Hyundai, IBM, Nestlé Nespresso, Samsung and Zara.
    Furthermore, I have added worksheets and checklists to many chapters in order
    to increase the value for the innovation practitioner.

    FTP: Thank you! I hope that the book will sell well and, first of all, help many practicioners to become better innovation leaders.

    10 09, 2012

    [Book Review] The Lean Enterprise: From the Mass Economy to the Economy of One

    By | 2018-06-14T06:54:01+00:00 September 10th, 2012|Books, Cases-Industrial|

    Lean management as a tool to improve corporate performance is nothing new. However, a book discussing lean management in light of the customer-centric economy has not been around. 

    "The Lean Enterprise", a practically-focused new book by Alexander Tsigkas, covers exactly this intersection. Alexander Tsigkas is an Assistant Professor at Democritus University of Thrace, Greece, and a Mass Customization enthusiast since many years.

    The Lean Enterprise CoverThe Lean Enterprise: From the Mass Economy to the Economy of One, by Alexander Tsigkas. Published by Springer.

    The book is divided into three part:

    Part I. The rising
    economy of “one” gives an overview of what is changing in the social
    system of production, focusing on the shrinking role of central planning
    and the rising power of individuation in the value creation chain. 

    Part II. "Lean
    eEnterprise in theory" refers to the principles of lean thinking, the
    transfer of lean philosophy from East to West, and discusses the
    necessary adaptation to the Western way of thinking and practice. It
    presents a practice-proven method for achieving a lean integrated demand
    and supply chain and analyses in detail the related implementation
    steps. Criteria for the successful transition of a company to a lean
    state are presented.

    Part III. "Lean Enterprise in Practice" provides a number of implementation cases in different types of
    production companies using the method presented in Part II. The goal is
    to help the reader comprehend how the method can be applied to real
    lean implementation situations in resolving various issues, ranging from
    production to the supply chain. A vision of implementation to lean
    electricity rounds out the book.

    In his book, Alexander Tsigkas

    • shows a methodical step-by-step way to design and implement lean
      management, in production, in logistics in cost accounting and
      procurement and in Sales and Marketing 
    • demonstrates numerous case studies from a wide range of industrial fields, helping the reader to learn how to proceed from theory to practice quickly   
    • presents a unique way of how to use the method for repositioning lean management when needed
    • offers a European way to lean management: a method-based
      implementation instead of a principle and tools based Japanese philosophy.

    INTERVIEW


    Alexander tsigasIn an email interview, we has some questions for the author. Here are the answers.

    FTP: For
    interested readers it is not difficult to find books on lean management, lean
    enterprise, lean production and so on. What sets your new book apart from the
    already existing competition on the market?

    AC: What I wanted to achieve with this book is to merge "Lean Thinking" and "Lean Practice" with the increasingly individualization and
    customization of products and services addressing markets of one.
    This is not
    only a technical aspect, but as as far as I am concerned, this mix comprises
    the key substrate of a new social system of production currently emerging away
    from mass production.

    A large number of the books available in the market
    reproduce lean principles based on the Toyota Production System without any
    critical reflection as whether they fit or not the western way of thinking and
    acting. They are usually of general purpose and case studies from real factory
    life are limited. Last but most important, they realy do not reveal how exactly
    "pull" in the factory can be achieved, and if they do there is no method
    behind as to how to design optimal "pull" of work and materials in
    different production environments.

    FTP: In your book you present a “European way” to lean management Can you explain what exactly that means and what is
    unique about it?

    AC: In Europe and I would add also the US, production is driven
    mainly by engineers. The western way of thinking and acting is more engineering
    oriented and less workers oriented as it is the case in Japan where the culture
    of continuous improvement is written into their "DNA" (sort of
    saying). In Europe (and the US), engineering based factory means that
    improvements come mainly through the engineers, who love to design systems
    (also production systems), set them for operation in production, observe them
    for some period of time and if they need improvement they redesign some part of
    it or all of it, at some point in time.

    The every day continuous improvement way
    of the Japanese is culturally not compatiblble with the western way of thinking
    and acting. Where it is implemented, it is executed imposed by force by the
    management, with usually high effort and therefore costs compared to
    the benefits achieved. Why therefore impose a way of lean thinking and practice
    that is strange to the local culture and not using the culture to proceed at a
    methodical and more engineering based way of Design for Lean Production and
    time discontinued improvement? 

    FTP: Which
    groups do most benefit from reading your book? Is is aimed more towards the
    manager in a large multinational company or can SME profit from the findings
    and implications as well?

    AC: The book is aimed towards both the manager
    in a large multinational company as well as the managers of an SME. Exactly
    because it a method based process, it can be adapted and used to be
    implemented in many different company environments. The cases show exactly how to adapt and implement the method in large
    enterprises as well as SME. Almost half of the book is
    dedicated to implementations covering various cases and
    settings. 

    Furthermore, this book also addresses the academic community
    which needs more insight into the theory and method that support lean in
    connection to customization practice.

    FTP: Alexander, thank you very muc — and I hope your book will find a wide audience.  See you at the MCP-CP 2012.

    29 08, 2012

    The next big trend in innovation management: Reverse Innovation: A book review and how does this relate to open innovation

    By | 2018-06-14T06:54:15+00:00 August 29th, 2012|Books, Cases-Industrial, General, Open/User Innovation, Research Studies|

    Reverse Innovation as seen by Google Image Search

    Reverse Innovation as seen by Google Image Search

    I am sometimes asked what is the next big trend in innovation management. Given a number of recent discussions and observations, I would now bet high stakes that "Reverse Innovation" will be the idea that will shape our understanding of innovation management a lot in the next years.

     

    The term reverse innovation, in short, describes how innovations made in the so-called developing countries can often lay the foundations for product innovations in the "developed" world. More often than not, these are relatively cheap yet efficient new concepts which can seriously callenge products on an existing "western" market — they often are a source of disruptive innovation.

    Developing countries are catching up on the knowledge- and technology gap and with that comes an increased chance for major innovations to be born in these countries. And this is where open innovation thinking comes into play: 

    • First, we know from lead user research that lead users often develop novel innovations under extreme conditions. Developing countries often provide these extreme conditions (budget, but also climate or working conditions) — hence leading to a high incentive to innovate in a functional novel way.
    •  Second, a core idea of OI is to get input from unobvious others — this is where broadcast search helps a lot. And developing countries offer a great potential for "unobvious" sources of ideas.
    • Third, when established companies develop a product for a new market that demands a "good enough" solution that only costs 10% of the comparable established "western" product, they are often forced to look into very new fields and approaches — input that often only can be acquired by looking beyond the firm's borders.

    Hence, for established companies, reverse innovation offers both a source often "open" thinking and input for the own innovation process, and at the same time demands new approaches and networks.

     If you want to learn more about reverse innovation, there is one book to read:

    Copyright Harward Business Review Press, all rights reserved!Reverse Innovation: Create Far From Home, Win Everywhere

    Written by: Vijay Govindarajan, Chris Trimble, Indra K. Nooyi (Foreword)

    Availible at Amazon: Hardcover Edition, Kindle Edition


    Prof. Vijay Govindarajan
    ( Tuck School of Business ) is the leading scholar researching this field. Together with his collegue Chris Trimble he has recently published his new book about the topic which I read in my recent summer vacation.

    The book is an easy read: In part one, Govindarajan and Trimble describe in rather brief form how major companies are beginning to realize that the popular concept of glocalization is not necessarily the best approch to conquer new markets. They describe the flaws on the concept and why reverse innovation promisses better results in many cases.

    Glocalization refers to the business concept often associated with the saying "Think Global, Act Local", in practice realized by taking an already existing product and adapting it to new target markets. If the target market is part of the developing world, these adaptions are usually severe downgrades.

    Govindarajan/Trimble explain that these downgraded products are in fact often not what the target market needs – or even wants. Each market requires products fitting it's specific needs and given resources. And that is something that can often no be achieved by just stripping product features to allow a cheapter retail price.

    The authors show how reverse innovation can help to overcome this barrier. By inventing locally, right at the target market, instead of at home, far away from the conditions and actual customers, companies can be enabled to develop the exactly right product for the market – not a stripped down version of an existing good.

    While reverse innovation is the more risky, more pricy alternative at first glance, and many internal and external obstacles have to be overcome, the described advantages are remarkable: Not only can a company better tackle local markets in the developing world. Products invented abroad have a high potential of being cheaper, offent radically innovative and can potentially be engineered to become suitable alternatives for existing products on the companie's home market as well. The innovations made abroad come back home: Reverse innovation.

    Part two of the book has eight business cases in which the conecpt is applied and explained why it is advantageous over other approaches. These include companies like Logitech, P&G, EMC, Deere, Harman, GE Healthcare and PepsiCo.

    So, in conclsuion, a very interesting concept, and important idea, and a good read!

    17 06, 2012

    Book Review: Produktprogrammplanung und -Steuerung im Automobilbau: Practical Application of Mass Customization in the Car Industry

    By | 2018-06-14T06:56:07+00:00 Juni 17th, 2012|Books, Cases-Industrial, Technologies & Enablers|

    Mass Customization is often reduced to the technical frontend, the configurator, and the underlying economic concept. However, the (consequent) implementation of MC requires a lot of organizational adaption within the production process. This is especially true where a wide variety of product variants can be ordered by the customer and each individual constellation of chosen options has to be assigned a unique product identifier which precisely describes the customized product.

    In his recently pubished book about production program planning, Dr. Wilmjakob Herlyn (Volkswagen, Braunschweig University) takes a detailed look at the challenges car producers are confronted with when offering mass customized products, and demonstrates a scientific solution.
    Since his book is only availible in German language, this book review will be in German, too!  3446413707

    PPSimAutomobilbauPPS im Automobilbau
    Produktionsprogrammplanung und -steuerung von Fahrzeugen und Aggregaten

    Written by: Dr. Wilmjakob Herlyn

    Published by: Hanser Fachbuch
    ISBN: 978-3-446-41370-2

     

    Die Produktprogrammplanung und -Steuerung (PPS) ist eine der wichtigsten Stufen des Wertschöpfungsprozesses. Im Zeitalter industrieller Massenfertigung auf globalisierter Märkte ist die Wahl geeigneter Parameter und Steuergrößen für eine reibungslose und kostenoptimierte Durchführung aller erforderlichen Produktionsschritte entscheidender Faktor. Die Aufnahme von kundenindividuell gefertigten Massenprodukten im Sinne der Mass Customization in das eigene Produktportfolio kann die Komplexität der Planung bedeutend erhöhen. Neben standardisierten Produkten müssen zusätzlich individuell konfigurierte Kompositionen verfügbarer Optionen erfasst, eindeutig bezeichnet und verfolgt werden. In direkter Abhängigkeit von den kundenseits gewählten Produktmerkmalen muss –flexibel und zeitnah – eine möglichst optimale Planung des Produktionsprogramms erfolgen, deren Komplexität über diejenige der normalen industriellen PPS hinausgeht. 

    Dr. Wilmjakob Herlyn, Manager der Volkswagen AG und Lehrbeauftragter an der TU Braunschweig, beschreibt in seinem neuesten Buch diesen kritischen Prozess der PPS am Beispiel der Automobilindustrie. Nach einer allgemeinen Einführung in die Thematik und einer Übersicht über die gängigen Herausforderungen der Praxis beschreibt er den hohen Grad der Differenzierung, die mit immer umfangreicheren Indivisualisierungsoptionen einhergeht. Die konsequente Anwendung des Mass Customization Konzepts führt im hochgradig arbeitsteiligen Automobilbau zu einer vervielfachung variabler Faktoren (Individualisierungsoptionen), die bei der PPS berücksichtigung finden müssen.

    Schlüsselelement ist dabei eine eindeutige Bezeichnung eines jeden individuell bestellten Fahrzeugs, aus der alle relevanten Produktmerkmale eindeutig hervorgehen. Die individuelle Bezeichnung wird zum einmaligen Fingerabdruck des Produkts und unterstützt eine präzise Planung aller Produktionsprozesse, von der just-in-time Materialbereitstellung bis zur pünktlichen Auslieferung an den Kunden.

    Dr. Herlyn stellt dabei das Modell einer Produktbeschreibung vor, die den Anforderungen an eine ideale Mengenalgebra gerecht wird. Bezeichnet wird das individuell georderte Produkt dabei mittels einer zusammengesetzten Nummer, deren Elemente die jeweils gewählten Produktmerkmale eindeutig beschreiben. Die Zusammensetzung der Produktnummer erfolgt dabei unter Beachtung bestimmter Regeln, die beispielsweise die Kombinierbarkeit verschiedener Merkmale – etwas der Farbe der Lackierung -  bestimmen. So entsteht eine flexible, individuelle und eindeutige Bezeichnung, die die Planung und Steuerung der auf die Bestellung folgenden Prozesse erheblich vereinfacht.

    Die praktische Anwendung dieses Konzepts in Produktionsprogrammplanung und -Steuerung wird in den folgenden Kapiteln ausführlich und praxisnah demonstriert. Dabei wird sowohl auf die konkrete Umsetzung als auch die zugrundeliegenden mathematischen Modelle eingegangen. Trotz des teilweise hohen Komplexitätsgrads gelingt es Herlyn, die für den Praktiker relevanten Zusammenhänge verständlich und umfassend zu erklären. Anhand einer Vielzahl von Schaubildern und  Diagrammen werden die Korrelationen zwischen zunehmenden Kundenanforderungen an die Individualisierbarkeit ihres Fahrzeugs einerseits und den daraus entstehenden Problemen für die produzierende Industrie (und deren vor- und nachgelagerten Handel) andererseits erläutert.

    Von der Produktionsplanung für Fahrzeuge und Aggregate über die Erstellung von Vertriebsprogrammplänen und Absatzprognosen, die flexible Produktionssteuerung im Normal- und Ausnahmefall bis zur Auftrags- und Produktionsverfolgung werden alle wesentlichen Aspekte des Wertschöpfungsprozesses anschaulich verdeutlicht. Dabei wird auch auf Spezialfälle wie besondere Fahrzeugtypen und unterschiedliches Kaufverhalten eingegangen.

    Das Buch stellt sehr schön die spezifischen Probleme der Variantenvielfalt für die industrielle Fertigungsoptimierung am Beispiel der Automobilindustrie auch für Leser ohne detaillierte Kenntnis der PPS verständlich dar und zeigt Möglichkeiten auf, diese besser beherrschbar zu machen

    26 05, 2012

    Book Review: Brand Together: How co-creation generates innovation and re-energizes brands

    By | 2018-06-14T06:56:45+00:00 Mai 26th, 2012|Books, Co-creation, Open/User Innovation|

    BrandTogetherBrand Together: How co-creation generates innovation and re-energizes brands 

    By Nicholas Ind, Clare Fuller and Charles Trevail

    Publisher: Kogan Page, ISBN-10: 0749463252

    Availible via Amazon as paperback and kindle version

     

    There already are many books on co-creation, but a team of people from UK based consultancy Promise has written a great new book that provides a very practice-focused perspective.  Promise has much experience in organizing co-creation for companies, and in this books it seems that they really share their tricks and learnings. 

    Hence I really liked Part II (Part I is a general introduction into the topic, not bad, but nothing new), which provides hand-on advise along all stages of a co-creation project

    The focus of the book is the large-scale global enterprise — the typical client of Promise. Hence, there also is quite some emphasize on branding and co-creation of a meaning of a brand. Nice!

    The official book website has more information about the book, the authors and even some exclusive content preview

    9 05, 2012

    Featured Research: New Forms of Collaborative Innovation and Production on the Internet

    By | 2018-06-14T06:57:24+00:00 Mai 9th, 2012|Books, Co-creation, Crowdsourcing, Featured Research, MC/OI on the Web, Open/User Innovation|

    In my series of featured research on open innovation and mass customization, today I would like to present you a book (also availible as free downloadable pdf) published by my colleagues Volker Wittke and Heidemarie Hanekop (Goettingen University). They present an interdisciplinary view on the effects of broad (online) collaboration on innovation and production.

    WittkeNew Forms of Collaborative Innovation and Production on the Internet

    By Volker Wittke and Heidemarie Hanekop (Editors)

    Published byUniversitätsverlag Göttingen, 2011, ISBN 978-3-86395-020-0

    Availible for free download and hardcover purchase at Universitätsverlag Göttingen

     

    The Internet has enabled new forms of large-scale collaboration. Voluntary contributions by large numbers of users and co-producers lead to new forms of production and innovation, as seen in Wikipedia, open source software development, in social networks or on user-generated content platforms as well as in many firm-driven Web 2.0 services.

    In their book, editors Volker Wittke and Heidemarie Hanekop take a nuanced look at the (online) collaboration landscape, presenting a collection of papers contributed by international scholars from sociology, management research, economics, and law. Complemented by a number of very interesting case studies, this book provides a good (academic) overview on the "big picture" of online-based collaboration in innovation and production.

    Large-scale collaboration on the Internet is an intriguing phenomenon for scholarly debate because it challenges well established insights into the governance of economic action, the sources of innovation, the possibilities of collective action and the social, legal and technical preconditions for successful collaboration. Although contributions to the debate from various disciplines and fine-grained empirical studies already exist, there has been a lack of an interdisciplinary approach. This is exactly where this book provides great value — and as it is open access and free for download, it may serve as a good starting point for the debate.

    Note: For more books on open innovation, co-creation, and corwdsourcing, head to the Knowledge Base of my website.

    9 03, 2012

    The Market for Mass Customization: Results from the Customization500. Part II: The State of Choice Navigation Toolkits

    By | 2018-06-14T07:13:44+00:00 März 9th, 2012|Books, Cases-Consumer, Co-Design Process, Customization Trends, General, Research Studies, Technologies & Enablers|

     (Part 2 in our series with key results from the Customization500 study. Part 1: Some Data on the MC industry structure).

    MC 500 cover finalThe Customization500 study (see http://www.mc-500.com) provided us also a very detailed view into the current practice of choice navigation and online configuration. When crunching the numbers, we found a large puzzle:

    The reality of toolkits clearly falls behind the broad body of academic research on design parameters of successful toolkits.

    You find lots of additional information about the Customization 500 (short: MC500) study in a special section in my blog, www.mc-500.com

     

    How did we evaluate customer satisfaction with a configuration toolkit

     

    We used more than 40 parameters to evaluate the state and design features of each toolkit in our study (Table 3).

    Data presented for each Customization 500 company
    Table 3: Data collected for each configuration toolkit profile

     

    This objective data was then matched with the performance outcome of the toolkit, i.e. the perception of our trained experts of the configurator.

    For this evaluation, we used five criteria to measure the performance of a configuration toolkit in our sample:

    (1) visual realism, (2) usability, (3) creativity, (4) enjoyment and (5) uniqueness.

    All impressions were measured by our panel of trained expert judges on a 1 to 5 rating scale (1=very low value / 5=very high value).

    • Multiple items: For most of these criteria, we used multiple items to gather the scope of these criteria. Items were grouped and tested with the help of factor and reliability analysis.
    • Inter-rater reliability of these factors was checked with the Intra- Class-Correlation-Coefficient.
    • Performance: Finally, the single factors were combined to one overall performance factor.

    In more detail, the five evaluation criteria were constructed as follows:

    • Visual Realism was measured by means of one question “How realistic do you assess the visualization of the configuration process?”
    • To measure usability, the evaluators were asked to rate: "The configurator is (1) intuitively usable, (2) user-friendly as well as (3) clearly and (4) logically structured".
    • The creativity factor consisted of two items: "(1) The website gave me a lot of freedom", and "(2) I could give my creativity free rein while designing the product".
    • To determine enjoyment, the experts had to rate: "The configuration was (1) fun, (2) delight, (3) pleasure, (4) entertaining and (5) interesting".
    • To assess uniqueness following statements had to be evaluated: "My created product (1) is unique, (2) is different, (3) helps me to differentiate; and (4) no one else has such a product."

    In addition, we had multiple other scales for performance like the satisfaction with the final product, the willingness to purchase, the likelihood to recommend the vendor to a friend, etc. 

    All 500 companies that are included in the Customization500 are presented with a profile picture like the following Figure 4.

    Example company profile 2
     Figure 4: Sample profile picture (purchase the full report for all 500 evaluations)

     

    Configuration process experience is driving overall customer satisfaction

     

    Our analysis showed that on the one hand side, “preference fit” and the meeting of a customer’s “need for uniqueness” are strong drivers of satisfaction with a particular mass customization offering.  

    However, process satisfaction, resulting from the enjoyment and creative involvement during a user-friendly configuration process, has an even higher impact in many cases, according to our data.

    This confirms the early findings of researchers like Nikolaus Franke or Martin Schreier who have stated that in B2C mass customization about 50 percent of the additional willingness to pay can be explained by the process experience and a feeling of achievement and co-design success – and not by the higher functionality of fit of a custom product.

    Our study clearly supports this claim. We urge managers to look beyond the sheer technology and back office integration of configuration toolkits and also focus on delivering a great configuration experience.

     

    Meaningful visualization

     

    Academic research often has stressed the importance of realistic visualization as a core element of a good toolkit. But many companies in practice still have very simple visualization features, and sometimes no illustration of the outcome at all.  But there also can be too much of a good thing:

    Evaluators often highlighted not those sites with the most advanced 3D visualization as best in class, But those with visualization features that matter and come to the point.

    For many products, a realistic, fast, plug-in free and well-described visual of an individual configuration is better than a complicated 3D model wearing, for example, my custom T-shirt – that takes many seconds to load and almost crushed my computer when playing with it. Sounds obvious? Well, it is not. We still see many sites where technology is used as a point of differentiation – but not as a source of customer value!

     

    Providing help and process navigation

     

    When looking at the data which features of a configurator drive most the perceived usability and use experience, we found that navigation- and orientation-help features, such as a progress bar or an activity list, play a key role. Co-design toolkits with a higher level of company- and/or customer-help features, such as design inspirations, deeper product information or recommendations by other consumers, in general performed better in terms of satisfaction.

    However, about 50% of the toolkits in the "Customization 500" do not offer any or only a low level of these features. Here, we find many untapped opportunities for practice to enhance the gross utility of customers.

    At the other side, we’ve found quite a few offerings without or with only a low level of these features which were performing excellently nonetheless. In some cases, the simple product design (solution space) did not require special help features. In other cases, customer satisfaction with the offerings was excessively influenced by the particular value provided by the customizable product itself.

    There is not one best way. Companies should “customize their mass customization strategy” based on the requirements of their customer stock. But having an understanding of the perception of customers or a firm's toolkit is crucial to make such a decision.

     

    Parameter versus need based configurations

     

    The largest gap between practice and recommendations of academic research can be found in the area of parameter- versus need-based toolkits.  We found that in today's mass customization reality, basic parameter (option) based toolkits still rule. Customers have to make their own decisions from a list of predefined options. This often demands a large number of decisions and also knowledge of the user about the product. While this may be perfect in the business-to-business context, it is not always the best option in consumer markets.

    Here, need-based configuration has been shown to provide better results. In such a need-based system, users share something about their preferences, requirements, or expected outcomes. This input then is transferred by an algorithm into a product configuration. A need-based configurator hence mimics the behavior of a good sales person who also may recommend you exactly the right product (configuration) after asking just a few but insightful questions. In our study of the best 500 toolkits, less than 3% of companies had such a need-based configurator in place. While we acknowledge that it is more costly to develop a good need-based configurator, these systems seem to offer a great opportunity for differentiation and larger customer satisfaction.

     

    Conclusion

     

    MC 500 signConcluding, we can state that mass customization still is an area in the making. While there has been much progress, and there are some really great toolkits in the market, the majority of systems still are in an early stage. But as our data shows, from the customer perspective it often is just a small step between a good to a great toolkit.

    All companies that have been included in the Customization500 received this vignette to illustrate that they are part of the leading companies in the field of mass customization and personalization. So when search for customization on the web the next time, watch out for this sign.

    But we expect that the Customization500 is a very dynamic field. Even during the time of our research we found many developments, improvements, and failures. This is why studying the field of mass customization remains a continuous endeavor … but a fun one, too!

     

    Context information

     

    Part 1: of this series:  Data on the MC industry structure

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

     

    Mcpc2011_proceeding_long_coverhttp://bit.ly/mcpc-proceedingsThe 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.

    MC 2012 banner blockwww.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.