Instead of researching and developing Inexact products Internally to meet customers’ needs, they turn customers as Innovators with a cagey of tool kit to design and develop their own customization to experience the difference. Companies adopting this Innovation will need to re – modernism their business model and operational management accordingly. The key issues: * The difficulty and challenge for any company is that fully understand customers’ needs are very costly and inexact process. * Companies who want to get one step ahead have adopted new approach the user friendly tool kit for customer innovation’.
It act as computer simulation allows customers to design and customizes their own product using prototype much faster and cost efficient. By turning customers into innovators, although it has created lots of values for customers, businesses need to ensure that not only they have the right tool kit, but at the same time refresh and re- modernism their business models and management accordingly to maintain the healthy customer relationship. The importance to CRM and marketing of the article’s key issues CRM is an on- going relationship process and a business strategy with an integration of I.
T system approach that allows company to engage with customers by creating a long term relationship. At the same time, companies can take advantage of this relationship o understand their changing needs and behavior, to create and deliver customers values to get sustainable profitable growth. Customers as innovators have connection with CRM In the following areas: A costly problem and a radical solution It’s costly because R;D (customers’ needs) resides with them, and the solution (how to satisfy the needs) Lies with the manufacturer.
Besides, It’s hard to compromise at times. This longing relationship Is call the plug-pooping effect where companies go back and forth Internally Just to test a number of prototypes for customers to get the final satisfaction. In reality on average, clients and customers marketable. Meanwhile, regardless of R;D investment, those margins can make the company difficult because of increased competition among competitors and cost pressures from customers.
The ultimate solution for companies regardless of industries would be using the right tool kit for customers to do their own customization which will be cost and time efficient, and simultaneously produce sample results in a short time. This do-it- yourself (DID) tool kit simulation must have four important capabilities including 1 . It must be designed for easy learning by doing . It must be user friendly to customers 3. It must contain libraries of useful knowledge and components of the product category 4.
It must have the capabilities and limitation so that customer’s design is producible. An industry transformed The article has used custom computer chip as an example for transformation. To save cost and time, I. T engineers have turned their expertise into computer based tools; what they call the CAM/CAD programs. These programs are the most effective where it allows rapid testing in trial and error in different simulation; so customers can get instant result faster. The benefits and challenges The benefits: It satisfies customer needs more than what manufacturers know.
It is faster and more convenient to customers If customers follow the rules embedded, the design outcome can be made the first time It allows companies to do business faster with small clients whose has cost risky and expensive projects, and large clients whose has medium budget project respectively. The challenges: The tool kit may not design to tailor every type of customer; only estimated model. Therefore, manufacturer may still continue to design technical demanding products, while customers can customize the final design that requires fast turnaround.
Having this kit will mean changes to the business model and operation. Companies will have resistant from sales and marketing departments, innovators will replace face to face contact for product development. Therefore they will need to rethink its competitive advantage to adjust the changing market. A pattern of migration As mentioned earlier through the content, companies (suppliers) adopting this innovation will need to migrate themselves to new model accordingly. The short term advantage of this kit is that it can only be produced in the factory where the tool as developed.
So it can reduce design costs and can partially outsource to technology cannot ask for competitive quote because only one firm can manufacture it. In the long run, supplier who owns the technology may be forced to drift to different direction. Customer may pressure third parties to introduce tool kit design that can fit any suppliers’ manufacturing process. Customers may complain at their own right, at times when competition is intensively enough, supplier would eventually lost their short term technology advantage, and have the freedom to design around different competitors.
Questions of value The customers as innovators approach is currently active in different industries in BIB field, and will soon emerge to BBC sector. Many companies have already offer ‘product confiscators’, which enables consumers to obtain a mass customized version of a standard product. Now we already know that this approach is very effective to speed up innovation to suit customer needs. It has shifted value at three different levels: the industry as a whole, company that implement the technology, and customers who take advantage of it. The big question is in what way will that alee be generating revenue?
And how do companies measure quality control? When customer innovation makes sense The author have identified three major signs that many companies many soon migrate to this innovation: 1. The market segments are negative, customers are increasingly asking for improvement, cost of production increases, and is hard to transfer the cost to customers. 2. Customers are complaining the product doesn’t work. You want to restrict the degree of customization. As a result, customers may not have the patience, and at the end relationship and loyalty start to fall apart. All competitive players are using the same technology where we all can use the simulation to manufacture customize products. Customers will take advantage of this to create their own design. Five steps for turning customers into innovators 1 . Develop a use friendly tool kit for customers 2. Increase the flexibility of the production processes 3. Carefully select the first customers to use the kit, and then use them as the vehicle to spread like word of mouth 4. Evolve the tool kit continually and rapidly to satisfy leading edge customers 5. Adapt your business practices accordingly
What mass customization is and isn’t For any mass manufacturer, customization for each type of customers requires two things: Learn how to design specialized products efficiently (R;D) and, Learn how to manufacture goods cheaply and quickly (Production) Despite mass customization will gives advantage for companies and suppliers to work together in good economic of scale, the following problems can occur. It may not have all the standard resources to choose from to create the final real innovation. Test whether the computer will run smoothly in the latest game software in a trial- and-error experiment. Example:
From the article, the author used Dell as the classic example for mass customization section above. Dell was one of the biggest players who went way ahead of other big brands in the I. T industry where others have invested hugely in product R ;D without thinking what their customers really want, who may be businesses, students, and game developers. That’s how we know Dell is well known for its innovation in ‘built-to- order’ or ‘configure to order’ approach. One of Dell’s TV ads I know shows a factory of staff and products shifting from one place to another in the assemble line to tailor both retail and online customers.
Dell used their own tool kit, the online user friendly simulation, that allows their customers to be innovators to buy online by picking the major components they want from the menu, have them assemble and deliver at their door within days. During those times, may be before Apple Macomb was famous, Dell has successfully won many customers in relationship management by providing as much creative freedom as possible to truly satisfy customers’ needs and wants. However, the only drawback about this approach is that, customers cannot test the new product design without fail for some specific software they want to use.