Digital Product Lifecycle with GenAI , Automation & Virtualization | Kalypso | PI Apparel

Pleasure to meet everybody. My name is Drew Sakata. I am the principal and global retail lead at Calypso. I'm joined by my colleague Hillary Char Cook. And we're going to be talking to you today about delivering the digital product lifecycle using virtualization, automation, and advanced analytics capabilities. First, I want to say, you know, shout out to the PI team for putting an amazing event together. Hopefully, you all have enjoyed it. Maybe give them a round of applause. In addition to our invisible heroes up in the booth over there who are solving technical problems to make these, the show work. So round of applause up to those folks too. So we're gonna be spending the time today talking a bit about some of the use cases that we're seeing break through the hype cycle and actually drive value in our clients. It's great to see so many familiar faces. Bless you. So many familiar faces and clients in the room. Great to have met and made so many new connections over the last 2 days together, but our time is tight, so we're going to jump into content. Hillary, anything you'd like to say to the group before we jump in?

Sure. I'll do a really brief introduction. So I am Hillary Char Cook. I am a digital ecosystem architect for Calypso. I come out of industry. I used to be a DC manager, a supply planner, a product line manager, a country market manager— sorry, country merchandise I'm a product manager and have been implementing SAP ERP systems, master data management, PLM for more than 20 years. And then in the past 5 years have expanded into the world of digital materials and digital product creation. So nice to meet you all.

Fabulous. Thank you. OK. For those of you that don't have any context about what Calypso or Rockwell Automation is all about, if the name is new to you or unfamiliar to you, I wanted to take a moment just to share a bit about our mission and vision for the world. So Rockwell Automation is the world's largest industrial automation and digital transformation company. And we're grounded in, as I've heard over the course of the last 2 days here, really expanding human possibility. It isn't about the technology. It's about the capabilities that that technology unlocks for our people. So expanding human possibility and shaping the future of industries. Our role is to connect the imaginations of people with the potential of technology. That's what we do day to day. We're the company that was founded in 1903, 121 years old this year. We're a $9 billion product organization, and we serve 95% of the global Fortune 500. So if we haven't worked together yet, what are you waiting for?

Let's do it.

Some of you in the room may actually know us from our work tracking the digital transformation of our industry. So since 2016, every year our team has produced sort of an industry standard benchmark for the adoption of digital capabilities. What are the hurdles that people are facing? Where are they getting traction? And kind of what is leading the market to either adopt or resist digital transformation? So you may know us from that work or with the Interline Report as well and our work leading the 3D Retail Coalition. So again, I know you've heard that name, that organization mentioned a few times on the main stage here over the last couple of days. If your organization is not yet involved in the 3D Retail Coalition, consider this a call to action. Come speak to me, come speak to Sandy from Target, speak to Michael from the PI team. We'd be happy to get you involved. There's lots of heavy lifting to do, and we need your help. So you may know us from that, but kind of our vision of what digital transformation is and what we help our clients to do as digital transformation consultants and experts is to help them realize the potential not of just discrete capabilities, but how these things come together across your entire product lifecycle. And we call that the digital thread. And this is the way that we describe transforming the way that you discover, create, make, and move product in a world powered by digital capabilities. And digital can mean a lot of things. I think as you've probably had lots and lots of conversations today, you'll find that every person that you talk to will define digital a little bit differently. But for us, it's really about 3 buckets of capabilities. The first is virtualization. That's virtualizing the product, that's virtualizing your customer, virtualizing your store, virtualizing your experience. The second is automation. That's taking the rote and mundane and replacing it with helpful automations that allow your team to do more of what they're experts at and to get more of the value from the work that they do. And advanced analytics. So data science, AI, machine learning, all the buzzwords around AI are what we bucket into advanced analytics. And there's many, many applications of that across the lifecycle. So what we're gonna be talking to you about today is, again, some of the things that have broken through the hype cycle. And under each of these things, virtualization, automation, advanced analytics, we're gonna share with you a couple use cases or capabilities that we think are getting real traction in the industry, talk a bit about those, and some of the investments that you might wanna make in foundational tech as we go. We are gonna be doing some polls, sort of taking the temperature of the room using the Slido app. So if you wanna have your phones ready, there'll be a barcode that appears up on the screen. It will be different than the one that's on your table. So just point at the screen, click the button, respond to the poll, and we'll do a quick kind of read and react. Our time's pretty tight, so I am gonna jump right in with our first topic, which is virtualization capabilities. So the 3 capabilities that we want to speak to here is probably going to feel maybe old hat to some of you. But the first is 3D product creation, everything from uppers to outsoles, laces to looks, virtualizing the product in the 3D space, using that to unlock the speed of creative innovation, iteration, also reducing the cost and time of sampling. The second is investing in visual sorting capabilities. So how do you take all of those assets that might be in your 3D authoring systems, in your PLM system, in your DAM system, and pull those together, connect the dots with your merch plans, and actually sort visually your line, your collections, by channel, by market, by geo, by price point, by concept, being able to slice and dice those and have your leaders have the power to say, show me dot, dot, dot, and to be able to see it without manually creating it is huge. And then third, what are you using to drive sell-through? How are you using these 3D assets to drive sell-through, whether that's through online virtual try-on experiences, 3D immersion experiences, interactive product customization experiences online, et cetera. Now, I think what we've heard from you from all of our research over the years is that you're already making investments in this space. Most of you here have already told stories over the last couple of days about how you're doing that. And I think when we started doing this research, our industry research back in 2016, the technology problems hadn't been solved yet. The ability to actually do these things digitally and virtually didn't exist. The solve didn't exist yet. Now the solve exists, but being able to drive it to scale in your organization has become a people problem, not a technology problem. So with that in mind, we're gonna do our first rapid assessment here. So if you'd please take out your phones, point them at the barcode. Our first question is, from which stakeholders in your organization are you feeling the most resistance resistance to adopting these product visualization capabilities. And I'm gonna see if the magic of Slido works here. Oh no. No active poll. Can my friends up there maybe help us with that? We're just afraid to answer. You're afraid to answer. If you scan that barcode, it does not take you to a live poll, huh?

Uh-oh. Oh, there's a—

Aha! Success.

Ooh, designers and creatives.

Maybe we'll try one more time.

There's a tidbit that comes to my mind whenever I think about adoption of some of those virtualization tools, especially with assortments, is I've seen clients who are preparing for big presentations doing it in PowerPoint or in Miro, then having to manually copy and paste thumbnails into an Excel spreadsheet that they're just gonna put over, you know, and maybe redo it for InDesign because that leader wants to see it there. And then they wanna slice and dice it by region. And it seems like a lot of work when you could have a dynamically enabled interface that just says, okay, show me by region, show me by color family, show me by product category, price point.

Product at your fingertips. Now I think this is interesting to see. So I think that the takeaway— this is exactly the kind of split response that we'd seen in our surveys and interviews with all of you. And I think that there's an opportunity for us to collaborate more closely to help address these questions in the partner organizations that are having the opposite reaction. So for those of you who have pull from your design team, How can you help your neighbor who's got push and resistance from their design team see the same story that you're seeing? And that's part of what we do at Calypso, coming into our clients to say, hey, if the pressure point, if the place of resistance is in your merchant team, let's help them to understand why this future is really powerful and impactful for them. If the resistance is in your design team, let me tell you why the senior designer at 3 of my other clients thinks that this is the greatest thing since sliced bread. If it's in the technology and engineering team, what is it that they can do differently in their process that's enabled by this that they could never do before? So I think there's opportunity for us as an industry to get clearer on our common story and to break down these barriers between. Senior product leaders is also a real reality. A lot of these folks, again, there's generational divide, and some people in these senior positions really are pulling for this, and some are really resistant, and there's a whole sort of change campaign of campaign you have to do to make this successful? Okay, I appreciate your response. We're gonna keep moving. So on our next set of capabilities, we're gonna talk about automation. And the next set here, the first I'm gonna speak to is design BOM automation. So what we hear from all of our clients is that our people are spending too much time doing data entry. We have too many issues with the clarity, consistency, quality, and completeness of our BOM data. And we're entering it, our vendors are entering it, our quality people are entering it separately. There's too much manual work being done to create design BOMs, let alone manufacturing BOMs. And there are capabilities that exist today to pull data out of your models and to pull data out of offline documents, PDFs, other forms of communication directly from your vendors to auto-build your design BOMs in a way that can help your team get out of that work. So automation around design bombs. The second, where we're seeing traction in the industry, should be costing. How are you using the data that is available to you in coming from your product, from your product records, to get to should be costing prices that are, that you can then take into negotiations, that your design team, first of all, can use to make product that meets its brief, And secondly, that you can take into negotiations with your vendors to drive to the cost point that you need to based on real data. Again, I've seen clients use this and the results from it, the enormous results from it, to fund their entire digital transformation programs. Huge, huge dollars in should-be costing. And then lastly, direct-to-manufacturing. So being able to take— and again, many of you are very familiar with this— but being able to take the product that you're creating virtually, use tools that are available to you, whether that's 3D printing or other emerging technologies, to create rapid prototyping, to do that on-site with your team in real time, to turn those iterations and to get to great product faster than having to send product back and forth across the planet, or to invest in what very few brands can, in on your own sample rooms. Okay, so with that in mind, we're gonna go to our second poll. If you grab your phones. How many of you have teams, either internal teams or external partners that you trust, who are helping you develop automations for your product creation functions? I guess I need to hit the next button. So our options here that you have one and they're delivering for you, you have a team, they're not delivering for you, not yet anyway, you don't have one, or you just have no idea. Okay. So pretty even distribution, which surprises me a bit, honestly. Great that you have teams. Great that they're working on it. Great that some of you have seen delivery and results. My hope is that next year when we get back together, you all are gonna be talking about how those automations have scaled and you'll be the champions for this capability as we move forward. The potential benefit to your teams is enormous. We know almost every brand in the industry has had significant reductions in headcount in the last 2 years and is still being asked to do the same amount of work with less people. And the only way to do that, that doesn't burn out and destroy your team and your morale, is to find ways to get work off people's plate. Automation's a huge enabler of that. So great. Thank you. I'm going to pass it over to Hillary to talk about our next chapter.

OK. Thank you, Drew.

Mm-hmm.

AI and advanced analytics. So a lot of the conversations, the displays have been talking about AI in terms of generative AI, right? And certainly, I think there was a panel yesterday where the question was asked, hey, can technology and AI make the design process more inclusive. And certainly if you put those kinds of tools in the hands of a designer and it helps them to be able to iterate and visualize what they're, and refine their design, obsess the product, right? Refine their design to be able to get to a better expression of a development brief. Certainly that becomes a lot more inclusive before they start, I don't wanna say bothering their technical design partners and things like that, but, But certainly there's a lot of benefits there. We recognize, however, that generative design will never be able to provide the skills— and don't call me Larry David— but won't be able to provide the skills that it requires to take good to great. That is the art of being a designer. But generative design is not the only place where AI can come into play. So AI and advanced analytics specifically can be brought in to augment the efforts of your designers and your developers. We developed a little widget. It's a desktop widget that sits on your desktop, and it can be repurposed in a whole bunch of different ways. But what it essentially does is it provides feedback on the materials that you've chosen. Maybe some of the compounds that you've chosen, and it says, I see the materials that you have on your design. Here's some more sustainable options, or here's some materials that come from our enterprise master palette, which then allows the enterprise to take advantage of those economies of scale. Gives you a little bit of a red, yellow, green on how you're doing, whether it's sustainability, and you can do a slider. Maybe you could repurpose this technology to say, I would like to be able to balance or see where the balance is between low carbon footprint material and then the performance that it brings. Or maybe I want to be able to balance sustainability and manufacturability. So these kinds of widgets that sit on your desktop that give you that— some of the decision support while you're making your choices is an example of how AI can come into play. And you can enrich that with testing data. Here's the material. And by the way, this is how it performed under similar circumstances. We've seen it deployed in the consumer packaged goods industry to be able to identify if the formulation for a compound that they're working on is similar to something that already exists. And whatever happened with that particular— we've seen it used to be able to identify costing outliers. So that rather than having to go through every single line item on a cost breakdown, it just says, hey, more or less you're right, but let's do a little bit of management by exception. And then we've also been able, we've seen this used to be able to evaluate data completeness a little bit farther down the line. Say sometimes it can say, it can, sorry, evaluate if the data is correct versus just the data is there. But especially as you're going through the product development lifecycle and you're selecting materials, maybe you're not capturing all of the sustainability information about a material or all of the greenhouse, the GHG statistics about that particular material. And it will alert you that there is gaps in your data and then you can automate getting that replenished either by your, your tier ones, tier twos, whoever, whoever is responsible for that piece of data. So there's, there's some powerful applications for AI beyond just the generative designs. Lastly, voice of consumer. So consumer sentiment testing and how AI goes into maybe creating synthetic personas to be able to do some of your testing. The voice of consumer enables you to be able to improve your confidence in adoption decisions, depth of buy, where you're setting your pricing. I think the, the challenge here that we've seen is it becomes like the technology actually is, is not as much of a challenge. It's more of a process challenge. What insight are you looking for from that testing? Is your calendar engineered to be able to take that insight and not cause additional spin within your teams? Are your teams knowledgeable about how to be able to metabolize that insight so that it pushes them forward and makes them grow rather than causes them to rework and rework and rework, right? So it's much more of a, I think, a process issue when we talk about AI and the voice of consumer. The tools are really powerful. Okay. All right, so next we're gonna talk— oh, sorry. We're gonna ask a question first. Yeah. Goodness. So what we would like to know, if you take out your phones again, is has your brand successfully deployed generative product design capabilities at scale? So when we say at scale, I mean, like, I know there's been a lot of conversations around intellectual property and generative AI and which kinds of models and which kinds of inputs. It's like everybody wants to see whatever— what other companies are working on, but they don't want to necessarily share their own data. And so we'll— there's 3 kinds of different levels. It's like individual designers are allowed to use whatever tools they have on their desktop, publicly available, right? Or maybe there's an enterprise tool and you're starting to build the database around the information that feeds your model. Or yeah, we've been using this for ages and it is well embedded into our creation process. Okay, so we got a lot of people who are piloting, so that's really good. I think we'll see how that ends. I'd like to be able to actually hear what the, what the evolution of that would be a year from now to see how those pilots are going, where it did and did not work for you. But I think it's starting to embrace it. This is light years ahead of I think it was 4 years ago when I was showing, or we were showing, a GenAI tool to a designer, a head of concept, and the blood drained from her face. As in, it was threatening. And I think we're at a point of maturity now where, okay, it's not a threat, it's really more of an augmentation and accelerator for us. And so that's where we like to Or we like to keep it, I guess.

Yeah. Yeah. That poor client, we were introducing them. They asked us to come in and demonstrate some of the emerging GenAI capabilities that were in the market and readily available to them. We came in at her request, put a presentation together, did a bunch of demonstrations. And the entire time, she was quite quiet. Which was unlike her. And then we paused and said, yeah, what do you think? What's your feedback? She broke into tears, was absolutely like bawling, like really broke into tears, and then paused, took a breath, and said, I can't wait for it, but it's going to be so disruptive that I don't know that we're ready. And I've had the great opportunity to keep working with that person. A year and a half later now, seeing her being at the forefront of her team, driving them through excitement to be able to deploy those technologies and for them to feel really empowered with it is an amazing transformation in a very short amount of time. And this data corresponds really closely with what we would have expected to see when we did our assessment with all of you last year. So, you know, the rough math here is 90-plus percent of you are investing in pilots and are scaling this capability. And that's what our data said that it would be. But a year and a half ago, that was almost zero. So the industry is moving incredibly quickly. And what that means for us, for our teams, for the change hurdles that are ahead is like, a shocking burden on you and this team, on us, to help drive the industry there in a way that puts people first. And again, sort of expands human possibility, not threatens it. So with that in mind, thank you for sharing. Appreciate that.

Let's talk about foundational tech for a bunch of creators. What is— what are we talking about? Foundational tech. It's the boring stuff. No, it's— well, it should be technically. What we're talking about is your— what are we talking about? It's your digital asset management, it's your PLM, it's your ERP or enterprise resource planning, it's your product information management. It's the digital backbone that feeds the rest of your enterprise. All right. So what are we seeing? We are seeing on the dam side— sorry. I'm gonna try not to insert a whole bunch of damn jokes. On the digital asset management side, obviously there is an expanded use of digital assets, which means that there's an expanding community of contributors and subscribers for those assets. And we're seeing our clients choose tools that enable them to accommodate some of these growing and expanding needs, right? So it means less SharePoint, less Box. Less FTP sites, less, God forbid, shared drives. It gives you more control over your intellectual property. Right. And it gives you enhanced upload and download speeds to be able to accommodate the various, like the giant file sizes, the different kinds of file formats and the compression needs for all the subscribers. Right. On the PLM side, we're seeing consolidation regardless of how you got to either having multiple PLMs, your homegrown PLM, an old PLM from 15 years ago where the methodology of implementing was really, really different. So we're seeing a lot of consolidation. We're seeing a lot of decustomization. We're seeing clients move to the cloud. And leverage managed services, managed services for ongoing maintenance and support. Anybody can really learn how to do a little bit of configuration, how to update a dropdown list, right? But not everybody understands the uniqueness of your business and understands how the toolset that is in the enterprise impacts the roles that support or have that close contact. So, When you consolidate, when you decustomize, when you move to the cloud, and when you leverage managed services, you lower your maintenance cost. You're able to repurpose your limited support teams for those tools into re-engaging back with the business. And you are recognizing that PLM does not need to be— I'm like, insert weird random German joke here. It doesn't need to be all things to all people, right? Where people started out with PLM and then they tried to make it into a planning system and a digital asset management system and many, many other things. There is a recognition by teasing apart those those applications and going with a best-in-class solution that positions you to be able to connect them together into a digital backbone and be positioned for scale and growth and ease of use and all the world peace and magical things that happen as a result. So resetting the boundaries we talked about in favor of best-in-class, the integrated ecosystem. All of the major players in, in those for PLM and digital asset management have built toolkits of connectors that make it a lot easier to connect them together. You don't need to do customizations around there anymore, and it helps you to realize that single source of the truth that other applications can then plug into and subscribe to and send information to, including those analytics, advanced analytics applications that we were talking about earlier. All right, so those— now you have your libraries of materials, digital materials, maybe libraries of colors. You've got product information, you've got vendor information, quality information, sourcing information, all connected together. And that enables your backbone to be able to serve up the right data at the right time to the right people in a secure way, in a modern— like, with a modern ecosystem. System. So that eliminates the need for manual duplication, manual synchronization of offline tools. All you people who are holding out with your Excel or Airtable or Smartsheets or all of the above where they don't manually synchronize, you know, like there's— we call that integration. So if you connect your tools, then you don't have to worry about that. Okay. So you have foundation that is modernized. You have an integrated ecosystem where you're connecting those foundational technologies together. Are you looking at investing in your user experience, user interface? Right. We're seeing a lot of our clients move into a mentality of meeting users where they are. And for anybody— I don't know if Safir is in here, but some of the original plugins for Adobe Illustrator, for example, where you could access within the four walls of your preferred design tool all of the product information and color and material information. That is an example of meeting your users where they are, not making them come into a PLM system and to do data entry when they just wanna be creative, right? And an example of, so, Meeting users where they are, human-centered design. And in the spirit of enhancing human possibility, the value of meeting users where they are is that it makes them more productive. Theoretically, it makes them happy, although everybody's a little bit likely to gripe anyway. But makes them more productive. It enables the team to do their best work. Ultimately. Are you paying your designers to do data entry and manual synchronization, or are you paying them to be able to make your product better? I think it's the latter. Pretty sure it's the latter, right? Uh, so if you're skeptical about the, the, the importance and the growth of, uh, leaning into user experience, there's certainly a whole bunch of people over in the other room and people in this room, uh, and a whole community of enterprises whose whole whole business model is being able to serve up information in a more usable, in a more interactive, in a more engaging way. So something to think about. Okay. So what we want to know is where is your brand making investments in foundational technologies this year?

Oh, I got to click the button.

No investment. No investments. Everybody's happy. Backbone's perfect. All the systems are connected. No work to do.

There are 7 responses, but I'm not seeing them on the on the screen.

That's okay. We'll take a look at the data a little bit later. But I think that with companies who have had multiple PLM systems or have done it 15 years ago and then highly customized or did their homegrown or, or, or, or, or, most of the big, sorry, all of the big players, are capable of supporting multiple categories, multiple brands through acquisition or not. And so if your PLM or if your digital asset management is not meeting your needs, come talk to me. I will talk very passionate. Yeah. Oh, sorry.

Ooh.

I'm very passionate about the topic and I grew up bore you to tears about the evolution of PLM systems over the past 20 years. But something to consider.

OK. Yeah, I think an observation, if you don't mind, that I would make on top of that. So if the folks in the room collectively represent, let's say, $200 billion in the footwear industry, something close to that, What we know personally as a firm who is working and engaged with these partners is that about $150 billion of that is looking at making significant changes to their PLM backbone. That is a rip and replace of an existing system. That's a decustomization and harmonization of their platform. That's a major multi-year programmatic effort to transform their PLM backbone and to build it from the ground up with integrations and seamless workflows in mind. That's enormous. We are at a pivotal moment in the industry right now that's driving that. So if you're on that boat, know that you have lots of peers in the room who are in a similar place. If you're not, maybe there's an opportunity to take a look at the the systems that you've got and ask, do they have you set up for success in the future? Okay, I know we're tight on time, so I think it's landing the plane.

Landing the plane. These were just some vignettes and stories about virtualization, automation, and advanced analytics. So thank you very much for your time.

And I'll just say, yeah, lastly, does anybody have any questions? We will open the floor to questions if you've got them. And certainly you can just raise your hand or shout out or grab a microphone. Yeah. Hi, great to see you.

Hi, Henri.

Can you speak to a situation where maybe you work with a large or small company, it doesn't really matter, where systems between departments were unaligned and what you helped do to Sure. Do you want to take it or do you want me to?

I'm trying to figure out how to do it without doing like a 1 part 2 part C.

Yeah, so I think an example—

so the question was, have we worked with a client, regardless of how large, where the systems were not aligned, and what did we do about it?

Yeah, so it's really common. We have many clients. There's one in particular that I'm thinking about now who 'cause apparel divisions and footwear divisions existed in two totally different platforms, and that made it impossible for them to do most of the very basic things that you would expect an organization of that scale to be able to do, including rolling up of their product data in any meaningful way, being able to visualize their product assortment or line in any meaningful way, being able to rationalize materials or pull sustainability reports. And that client in particular had actually 4 different instances of PLM, 2 of which were the same platform, 2 of which were a different platform. And we helped them pull that into a singular PLM system. It was about an 18-month transformation to make that happen. But now the organization's running full speed on a singular system where leaders have visibility to everything that they need to be able to do that. That. Um, it's not an insignificant effort, but the benefit to that business was very significant.

And I think a lot of that is, while consolidating systems and aligning is a little bit of the end result, it started with the recognition of the problem that type of architecture caused and getting the key stakeholders to believe in that and then work with us, co-create with us what the plan forward was.

Yes. Exactly.

Hold hands, spoon feed, you know, that thing.

A little bit of both. Okay, I know we're at time. I wanna put in a plug for one of my colleagues, Esteban Garza, who's gonna be up here facilitating the Tech Titan panel here at the end of the day. If you have the opportunity, it'll be here in room 1. It certainly will be interesting. Folks from PTC, Viking, VibeIQ, Syrup, Made in Old Town, and Helos will all be up here on stage. So thank you again for your time. Really appreciate it.