← The Agile Brand with Greg Kihlström®: Expert Mode Marketing Technology, AI, & CX
The Agile Brand with Greg Kihlström®: Expert Mode Marketing Technology, AI, & CX
#580: On-demand production and product data for better customer experiences with Leonard Marano, Lectra
00:22:50
Today, we’re exploring the transformational power of on-demand production and real-time data in a few different industries.
Loading summary
Transcript33 lines
- [00:01]
A
The agile brand.
- [00:09]
B
Welcome to season six of the Agile Brand where we discuss marketing, technology and customer experience, trends, insights and ideas with enterprise and technology platform leaders. We focus on the people, processes, data and platforms that make brands successful, scalable, customer focused and sustainable. This is what makes an agile brand. I'm your host, Greg Kilstrom, advising Fortune 1000 brands on martech, marketing operations and CX best selling Author and speaker. The Agile Brand podcast is brought to you by Tech Systems, an industry leader in full stack technology services, talent services and real world application. For more information, go to teksystems.com now let's get on to the show. Today we're exploring the transformational power of on demand production and real time data in a few different industries. With Lenny Marano, President Americas Electra, we're going to discuss how these technologies are revolutionizing the fashion, automotive and furniture sectors by enabling brands to respond rapidly to consumer demands. Lenny, welcome to the show.
- [01:15]
A
Greg, thanks for having me on.
- [01:17]
B
Yeah, looking forward to talking about this with you. Before we get started though, why don't you introduce yourself and tell us a little bit about your role at lectra.
- [01:27]
A
Sure. So I'm President of the Americas for Lectra, which means I'm responsible for all commercial operations in north and South America. That includes sales, customer success, which is field service, consumables and parts, our customer success teams, our call centers. So that all falls under me. I joined Lectra in 2021 actually through the acquisition of Gerber Technology, where I had spent the prior seven years in various commercial roles, from product management up to being their global chief commercial officer. So 10 total years in the business.
- [02:05]
B
Great, great. Well, so to get started, and for those that are a little less familiar out there listening, could you start by explaining what exactly do we mean by on demand production? And, you know, why is this becoming such a critical strategy for compet in some of the industries I mentioned, like fashion, automotive and furniture?
- [02:27]
A
Sure. So on demand production is really producing products after they are ordered. And that's either ordered by the consumer or ordered by the retailer. So when you look at traditional manufacturing models and you look at, you know, particularly prior to, you know, 2020, where, where inventories had gone crazy, the traditional manufacturing model was really to kind of build on speculation. So customers would produce products, you know, en masse, ship them to retail outlets or online warehouses throughout the world, and a huge portion of it would just go unsold. So, you know, you would have probably about 30% of what was actually produced get scrapped. So what on demand production does is it allows the production of the product after it's ordered by the consumer or by the retailer as a method of replenishment. And that allows, you know, our customers to get products to market faster, to have a more sustainable process where they're not destroying material, improve their margins because there's less waste, and in many cases get the consumer a more customized or tailored product to meet their needs.
- [03:47]
B
Great, great. So, yeah, let's dive in here a little bit and as I mentioned, a few of those few industries at the top of the show. I'm sure we'll touch on some others as well, but fashion, automotive, furniture, some others. How has on demand production enabled brands in these sectors to do some of the things you touched on just then decrease delivery and production times? Maybe if you could share some examples of this transformation in action.
- [04:16]
A
Sure, actually I could. On the furniture side in particular, I could share it as a consumer because when you look at the furniture market now, it's very much a on demand model. It used to be where furniture manufacturers would build tons of this large bulky inventory stored in warehouses. A lot of it would go unsold. But when you look at a lot of the, the major brands out there in the furniture space, they've gone to virtually all on demand production. So, you know, going back, you know, really four years ago, if you went to go buy a couch tailored to your needs with custom fabric, maybe, you know, a specialized frame, it would be 8 to 12 week lead time. You know, recently we ordered a custom couch here. I have, I have two young kids and two dogs. So the last couch got destroyed pretty well. The lead time on made to order on demand sofa here in the US was less than four weeks. So they've really reduced the lead time by less than half. In the furniture space. Yeah, yeah. If you look in the apparel space, there's. In the apparel space, we always carve it up into, you know, fashion and then function. And you know, a lot of people think of, you know, on demand or customizing the fashion side where you have custom made suits and, you know, customized shirts. But actually in the functional apparel space, we've seen a huge uptick in on demand manufacturing, particularly in protective wear. So if you look at fire suits, believe it or not, fire suits are all customized based on the different body dimensions of the firefighter. And we have one customer out in, out in Ohio called Firedex that purchased an on demand system. And yeah, it really just revolutionized their production operation. They were able to increase their capacity by 30% which allowed them to go and take some market share from, from their competitors. By having that increased capacity, there was a significant material savings. You know, it's about 1%. But when you're spending millions and millions and millions a year on material and it's your number one cost going into the product that you're making, 1% is a huge savings. It eliminated errors by automating the order entry process. We've integrated it with their ERP system. So it's been a real game changer for Firedex. And it's funny, I was actually out there maybe about two weeks ago and you know, sat down with the, you know, the chief operating officer and he goes, you know, when you sold this machine to me, you know, a few years ago, and you put together the business case and the ROI analysis on the spreadsheet, you know, most of the times those ROI analysis are bogus, right? What you put on a spreadsheet doesn't translate into production. He goes, but the business case that lecture prepared translated exactly to our production. Actually we're doing a little bit better than it. So it was a pretty, it's pretty cool to hear that live from, from them.
- [07:23]
B
Yeah, yeah, definitely. And yeah, I can definitely speak to, well, I can speak to the opposite of the. It's been a couple decades ago, the story, but I ordered a custom couch and it was like, it was kind of like, where in the world is my couch right now for, you know, waiting weeks. It ended up being months or something like that by the time it slowly made its way around the world. So, you know, the idea of getting something in a few weeks would be pretty amazing compared to a situation like that. So, you know, definitely benefits for consumers seem clear and as you just mentioned, you know, lots of benefits for companies from an ROI standpoint and even, you know, just an inventory standpoint, what do brands need to keep in mind? Again, it makes a lot of sense and I'm sure, you know, the numbers bear out for, across a lot of different industries. But what do brands need to keep in mind during initial implementation of something like this? Like what's, what's the best way to
- [08:25]
A
begin getting buy in from your internal stakeholders? You know, there's a, whenever you're migrating from doing things the way that you've done it for 30 years and a lot of these furniture companies and a lot of these apparel companies that we deal with, they've been around for a long time and you have, you know, the same people that have been doing the same thing the same way For a long time. And there's a major change management piece, you know, within the customer that they need to manage within their team. And I think you do that by really making sure that throughout the organization they understand the value, you know, at the associate level, the way that the executive team sees it when they go to sign off on the project. Yeah, yeah, we had, it was interesting. We had one company in the furniture space, Leisure Creations. They make, believe it or not, they make umbrellas for resorts. And if you look at all the different resorts and hotel chains around the world, they all have custom colors and custom patterns and things like that. So it's actually a highly customized product. And they were doing everything completely manually, manually cutting, manually designing. And they went to implement a CAD and implement our furniture on demand system after being completely manual, and it literally allowed them to double their production. But these were people that had been there for a long time, had done things, you know, in a very analog way. But by getting that buy in early on, having the team come to our facility and our, our experience center in Atlanta, see, you know, see the technology live, you know, getting their buy in, it really helped with the implementation and it got them off to a very fast start.
- [10:06]
B
Yeah, I mean, I can imagine it. If you're in the industry for quite a while, it almost sounds too good to be true. Right? Like there, there must be some kind of downside to it. But you know, actually seeing it in person and, and, and you know, all that probably, probably makes a, a really compelling case. Right?
- [10:24]
A
No, it, it, it does. And the numbers, the numbers don't lie when you do benchmarks. And we have our technical sales team walk through case studies, you know, we very, you know, we always use our customers information. So when you're putting together the, the case for this type of solution, it's really good that you have, you know, it's really important that you have internal benchmarks that you could share with us. So we know what we're, you know, what we're looking to, you know, improve on. And when you look at the benchmarks and you look at what we're able to produce is generally pretty cut and dry from a efficiency standpoint, from a labor savings standpoint, from a material savings standpoint, you know, it's, it's very, very quantifiable and easy to see.
- [11:12]
B
And speaking of, of benchmarking, so you have some benchmarking solutions specifically for the fashion industry as well. And you know, kind of an industry that's, that's notorious for, you know, it's it's difficult to kind of understand and keep up with demand and there's potential waste and things like that as well. That's, you know, well documented. So maybe can you explain the benchmarking solutions that Lectra offers there? And you know, how do these tools help brands make sure their shelves are stocked with the right things that consumers really want?
- [11:46]
A
Yeah, I mean, you know, one thing about the, know, the apparel space is that it's very, very highly competitive. And I think, as we all know, there's been a major shift from brick and mortar to online to ecom. So, you know, when a brand or a retailer used to want to scope out the competition, they would have to go and send people to the competitor stores and write down what, you know, what products they were offering, what colors they were offering, what sizes they were offering, what were the price points, what were the discount strategies. It was a, you know, it's a big intensive process. Now we have a competitive benchmarking tool called RepViews that leverages AI to go and, you know, pull data from the websites of our apparel customers, competitors and understand what assortment they're offering, what products, what, what sizes, what colors, what's their pricing strategy, you know, is it regionalized? How are they discounting, when are they discounting? And it allows really our customers to make better decisions about their assortment and better decisions about their pricing and all of that. Yeah, it gives our customers actual information that really impacts their bottom line. So from a assortment offering, we literally just did a demo in a case for somebody that was looking at reviews a few weeks ago where we pulled up one of their competitors, like their biggest competitors, information through the reviews tool. And they go, oh my God, they're selling all long sleeves, we're selling all short sleeves. We have no new long sleeve products in the pipeline. We, we have to go and look at what we're doing. And it's one very simple example where a customer took that information from Revue's actually a prospect and went and reflected on what their design pipeline looks like. But when you also look at pricing strategy, right, if you're a, you know, a hundred million dollar, you know, company and let's say you're at 50% margin, if you can impact your margin percentage by 1 point, you know, it's a significant impact. So by understanding the competitive pricing strategies a little bit differently, it allows you to make better pricing decisions and improve your margin.
- [14:06]
B
Well, right, because it's, I mean, it's one thing to be able to be nimble within your own Products and I mean, certainly those, I'm sure those brands are doing plenty of intel on buying behavior on their own products. But, you know, what you're talking about is taking that to a step further, which is also trying to anticipate based on, you know, it's not just learning from your own good decisions and not so good decisions, it's learning from your competition as well. So, I mean, I would imagine tying all of that together, you know, the on demand within the brand and then the competitive analysis, it gives a pretty comprehensive picture, right?
- [14:45]
A
It does. And you know, it all comes down to really speed and agility and, you know, it's appropriate for the, you know, the name of the podcast.
- [14:54]
B
Right, right.
- [14:55]
A
It's the being able to see changes in the competitive marketplace quickly, you know, react to it quickly, and then also make sure that you're producing product that's going to sell based off of information you've got, gotten within a, you know, a short horizon makes you agile. And that's what, you know, we know our customers need to compete. Are these tools that really allow them to be agile in their decision making, agile in their design, agile in their production? Yeah, yeah.
- [15:28]
B
Well, you definitely get bonus points for mentioning agile on the show. So that's definitely. Well, no, this is interesting stuff and I guess, you know, I know we touched a little bit on how to use the data effectively, but you know, I wonder if you could talk about, I mean, certainly, you know, another thing that comes up on literally every show is AI and how artificial intelligence is really used to power some of these things. So can you talk about maybe the role of AI in this competitive intelligence and other things?
- [16:02]
A
Sure, yeah. Repviews is exclusively AI powered. It leverages the learnings that we've had to go and identify what is the right information to pull from the competitive websites. And you know, for Lectra, when you look at, you know, repviews, when you look at, you know, our on demand solutions, it's really the next logical evolution for a company that's been invested in AI since 2007. So really for the last 17 years, we've leaned into AI. You know, we started with machine learning AI when all of our production machines first got connected to the Internet, we started accumulating all of the data from all the different machines that have allowed us to effectively optimize production parameters based off of different materials, but also be very predictive in our services. We have customers that have leveraged our equipment for years that will get a part or will have a part, show up on their doorstep when they never ordered it and they go, hey, I just got this part. What happened? Well, because of our machine learning, we know that you have this motor that's been running hot for the last three days and it's likely going to need to be replaced in three more days. So we shipped it to you so we could be proactive on it and that helps lead customers to a 99 uptime. So that's one way that we were very, you know, early adopters and early proponents of, of AI.
- [17:38]
B
Yeah, yeah, well, and I know, you know, a lot of people listening to this certainly know that AI has been around pre chat GPT, even though it feels as if, you know, reading certain headlines, you'd think it was just invented a couple of years ago. But I mean, that's another interesting thing too is just the fact that you have, particularly for customers and industries you've been working on with, you know, for, for years and decades, you've got all of that information. So you know, I would imagine the, the data that you have on the industries that you work in is pretty substantial. And you know, so how, how do you look at that? Like how, how quickly does, does data, you know, go out of date or is that, is that stuff really, you know, is that stuff relevant even, you know, even if it's 10 years old? Seeing those trends and everything, like how, you know, how relev.
- [18:33]
A
Older. Older data, I mean, on the older data, you know, our, our equipment has a lifespan of 15 years. If you look at the bell curve of replacement, it's 15 years. So, so it's, you know, 10 year old data is, is absolutely relevant for us. But you know, the types of data that we look at it, you know, it, it changes. And you know, having the, the tools and the, you know, internally developed algorithms to analyze that data allows us to provide our customers with benchmarking solutions. So they could take a look and say, okay, how am I comparing to other folks in our, in my space? So if it's a automotive customer and they want, you know, to know if they're running at a level of overall equipment effectiveness, you know, in line with their competition, we could provide them that data based off of, you know, what we've accumulated over the years.
- [19:25]
B
Yeah, so I mean by, by that token it's like, I mean, certainly it benefits those, those long standing customers, but also, I mean somebo signs up tomorrow, so to speak, and they get to, they get to benefit from that, that industry data. Right? So I mean that's, that's, I would imagine that's incredibly valuable to be able to benchmark immediately.
- [19:44]
A
Yeah, no, it's, it's again, it goes back to the, you know, agility piece. By having that benchmark, it allows you to go and focus in on areas of your operation where you, that you have identified as needing the most improvement the most urgently.
- [19:58]
B
Yeah, absolutely. Well, Lenny, thanks so much for joining today. Just a couple things before we wrap up here. I'd love to hear what you're thinking as far as what are some of the upcoming developments in on demand production and real time data utilization that you're seeing in some of the industries you work in.
- [20:19]
A
Yeah, I think it's a. Acceleration of adoption. You know, when we talk about these tools, you know, six, seven years ago, it was kind of the, the future and the tools of tomorrow, but it's all here today. So when I look at, you know, the predictions, I think it's going to be about the major players looking at their operations differently, figuring out where to start on leveraging, you know, good industry 4.0 best practices. And from a consumer standpoint that'll translate to more readily available product that suits your needs with shorter lead times at prices that are a lot more attractive.
- [21:04]
B
Yeah. And how should companies prepare to integrate these things into their operations to stay ahead of the curve?
- [21:13]
A
I think it's really having a good understanding of what your process currently is.
- [21:20]
B
Right.
- [21:20]
A
Having a good process map that you could share with a trusted advisor like us. Say, hey, here's where I'm at, here's my current process. How do I evolve this into something that is going to be industry best practice now and in the future? Thanks a lot Greg. I really appreciate you having me on.
- [21:41]
B
Yeah, thanks so much for joining. Well, again I'd like to thank Lenny Marano, President America's at Lectra for joining us today and sharing his expertise on on demand production and real time data. To learn more about Lenny Marano and Lectra, please follow the links in the show notes. Thanks again for listening to the Agile brand brought to you by Tech Systems. If you enjoyed the show, please take a minute to subscribe and leave us a rating so that others can find the show more easily. You can access more episodes of the show at www.greggkillstrom.com. that's G-R E G K I H L S T R O m dot com. While you're there, check out my series of best selling agile brand guides covering a wide variety of marketing technology topics. Or you can search for Greg Kilstrom on Amazon. The Agile brand is produced by Missing Link, a Latina owned, strategy driven, creatively fueled production co op. From ideation to creation, they craft human connections through intelligent, engaging and informative content. Until next time, stay Agile.
- [22:46]
A
The agile brand. To realize the future America needs, we understand what's needed from us to face each threat head on. We've earned our place in the fight for our nation's future. We are Marines. We were made for this.