Why use-case Clarity is Key for Return on 3D Investments | Frans Borgstrand | PI Apparel

Hello, everybody. My name is Frans. I'm working as a DPC advisor under the company name Shoreline DPC. I used to be at H&M. During 5 years, I was having different leading roles in our DPC program. And I was sitting in here listening to the Browseware presentation. I don't know how many of you did the same, but as I mentioned, it goes very much hand in hand building on what was presented by the Browserware team because I want to get even deeper into the concept of actually simplifying and decomplicate 3D because I think that is where we are as an industry right now. Embarking on the different DPC initiatives and programs for quite a while and still struggle to get the full tangible value out. And I'm proposing a closer use case approach, as you see here. And I'm old enough to reference political campaigns from the '90s. But Bill Clinton, when he ran for president, his campaign organization had the insight that winning an election is all about winning the crowd's wallets and economy. So I'm kind of referencing that using the term of it's the— not economy, it's the use cases. Stupid. All right. But we are here in beautiful Italy, Lago Maggiore. Now we're in the basement. If you look outside, the sun is shining. And we have a new budget year. And there are some energy around 3D transformation and DPC. But I want to spend a few— minutes on recapping last year. And if not a backlash, at least many testify on a slowdown in the DPC initiatives and programs. There was like the effect that COVID had on like fast-forwarding the digitalization progress kind of now bounced back a bit. You're back to your offices, back to your own ways of working. That's an effect that we see. And again, getting back to the fact that most brands, I would say, not all, but most, have at least started to dip their toe into 3D and DPC some way or another. There are certain brands that have super progressed and that have come far. But what's kind of, you know, it's been quite a few years now. And when the financial slowdown from last year hit, you know, inflation, war, all the other challenges in the economy, Brands really started to look down and see, OK, if we need to cut costs, if the DPC programs haven't really proven their ROIs yet, what is there to actually do? And we did see on the Scandinavian market, the big 3D software provider actually reduced the adoption on the market, basically not just keeping the number of licenses, subscriptions out there, but actually dropping. We also saw signs of 3D teams being discontinued. I come from H&M, one example of this. Team in Shanghai was to the most also discontinued during that year. We also had during '21, '22, the big metaverse hype that came that kind of gave some strength for the DPC programs, like additional management attention that kind of turned into a fad during the last year as well. And these concerns are shown in different pieces of research. I've seen other presentations today often referencing the McKinsey AI in Fashion report. I would like to give Kalypso and their yearly DPC report a bit of credit, very important and useful. Industry assets to see and monitor what's going on. I want to zoom in particularly on two of the key insights here. First being that for the first time, first year, we can really see that justifying further investment in DPC has become a main barrier for going forward. And it has risen significantly since the year before. Basically, more difficult to get funding for your programs before being able to show hard ROIs. And the other one looking into the particular DPC promise of reducing lead times. That is also one of the most difficult goals to hit. And in this report, it's expressed as a positive way that it's an opportunity that is not yet fulfilled. But I mean, really, think about it. If you ask 96% of decision makers in the DPC space, they would say that speed to market, lead time cut, is number one strategic DPC priority. And then at the same time, only 4% have made significant calendar changes. That is truly, truly a paradox. Right. So, are we doing it all wrong? Of course not, but maybe it's time to look a bit on how we set goals. So, my observation from speaking with many brands and my own, experience is that it tends to be quite— teams and brands tend to be quite good at setting those more overarching strategic goals. I think the Browserware team had a slide that summarized that really, really well. It's often about efficiency and cost gains and also on the sustainability side. And yes, as mentioned, lead time cuts, et cetera. And how they tap into the more overarching group goals tend to be quite good. And at the same time, I also see that brands that have some kind of structured approach to 3D and DPC, they're also quite good at, on a team level, action plan, how to go from 2D to 3D. And like we were mentioning earlier here, to get a flat sketch out in an efficient way from a 3D sketch, et cetera. But exactly how those team-level actions actually contribute to the strategic DPC goals is often very disconnected. And that's where you see the problem in improving the value. And that is a problem, like I mentioned before, with justifying further investments. I think that the— Yeah, the paradox that I was mentioning before is a good example where there is a disconnect between what activities that is being done and what's actually being— and that's the reason that I also asked in the previous presentations, what do you actually do if you can free up time? Because it has proven to be so difficult. Only 4% can actually do it. And one thing that we all need to realize is that it's really time to set fair expectations on your— DPC and 3D Journey. Because a big goal like that is so much influence on all the other change initiatives that is happening at the same time. So, yeah, I mean, for getting— giving a bit of a sharing an example from my work with H&M. So we saw this back in 2020, '21, that if we keep doing efficiency on an activity-level base, then we keep doing 3D in a 2D process. And that makes it really, really difficult to realize the true lead time gains. So we made, for a long period of time, made preparations to really challenge and re-engineer our process to see and define what would a DPC, like a pure DPC process look like, where we take decisions to move forward in the process purely based on digital. And what are all the capabilities that needs to be in place for exactly that? We decided on an operating model for 3D, which was our own teams, pattern makers and designers, together with our suppliers, factory suppliers. In the case of the pilot we intended, those were placed in China and Bangladesh. So started to train them in our standards so we could collaborate over the files, et cetera. So that was considerable. Effort. It was a basic Jersey team that was piled up to execute this pilot. But again, like referring a bit to this slide, once we came closer to the actual launching of the pilot, we saw how the immune system of the big traditional organization kicked in. There was parallel change initiatives on the organization side that basically made it impossible to go into piloting in operations, which was the case. There was basically too much at stake, and that kind of— led to the sponsors and the big decision, like the anchoring we had with the team, saw that our team is so influenced by these other change initiatives that is causing so much stress that we can't jeopardize this collection. And then remember, we are back in 2020, '21. We also concluded from, more from the supporting functions side, that we do not have the right basic capability in place to make this in order. So, we kind of pulled back and saw that, all right, we need to have this more, of a vision that we need to move towards stepwise. So what I'm proposing today is that— so in summary, we have a situation where process change, that needs to be in there, needs to take place, but that is really, really difficult. You have a situation where it's difficult to justify further investments before proving hard ROIs. And there is a disconnect between— overarching goals, and team-level activities. A way to simplify this is to introduce this concept of use case. And this is the Wikipedia definition of use case. And I understand you all know this, but for the sake of the presentation, a specific situation in which a product service, in our case, TVC with 3D, could potentially be used. So exactly how and where and for what particular value are we using DVC with 3D? And this is a framework that is very much relating to some of the slides from the previous presentation as well. There are different ways to show this, but the components that needs to be in place in order to perform successful transformation towards digital. So yes, you have the— on the strategy side, you have the vision and goal setting. We talked about that. Value realization is about setting the metrics so you know we can measure the progress. 3D operating model is not often talked about in great detail, but it's important to know exactly who's actually expected to do the 3D. Management anchoring, of course. And on the people side, we talked about change management before. Tool proficiency, but also very important, it's not only the roles that are active in the tools that need upskilling. And of course, the more foundational side, standards libraries and the suite of DCC tools that you need. To fulfill your pipeline. But as you see, use cases place in the middle. And if we zoom in on them a little bit more, there are lots of different ways to group use cases. This is one way that I have found to be very useful. Conceptual design, for example, is often overlooked as a separate use case, but it really should. And it really deserves it because it requires— the early creative phase deserves its own capabilities. You're being able to be quicker in the iterations going back and forth and do rough renderings, et cetera. Digital sampling, we will go— it's a huge one. We will go more into detail about that earlier or later. Virtual fit. Is also a big one. But the way I put it here, if you look more on the product creation side of things, either it's about looking and designing in silhouettes and shapes. And it's completely different and much more complex to actually do fit sessions in different sizes, et cetera. And I was listening to the first insight presentation this morning. And I'm happy to hear that they have 200 customers, I think he said. But my experience is that teams are using this opportunity to get real consumer data to an underdeveloped level. I come originally from digital-only design. Designing digital interfaces and products. When designing a digital product, you normally have user testing from day minus 1, more or less. You have paper prototype, and you get user feedback, and you iterate. When I started in fashion 6, 7 years ago, I was really surprised that there isn't a single, normally, end consumer that has given any input on a on a product. And the reason for that I often hear is, well, it takes 18 months to develop a product. It doesn't make any sense to ask anybody what they would like in 2 years. I think that should really be challenged. But I see the success of Shein, for example. They are being super ultra fast in their supply chain so they can basically create the user input data real time on their e-com site. So I think that proves that it's worthwhile looking into. My intention is not to go in detail to all the different groups of use cases. But my point is that when I ask brands that are committing to 3D and have a 3D transformation, about what is your portfolio of use cases, it's difficult to get a really good and clear answer. Either they say, yes, we're doing a little bit of everything, or it's not recognized as a concept at all. And I think there is a great value, not the least if we're going to bring back 3D to something tangible. And not that uncomplicated. We need to be able to ask that. So, those are supposed to, like, visualize that you have a certain portfolio of use cases that you support. So, if you have a very clear structure, crystal clear idea on what are the use cases that you are supporting at any given time. There are loads of benefits, one of them being you can make sure that you are appointing the right efforts and the right investment, and with no more and with no less. And also easier to identify visible and relevant metrics and how they connect and relate to the more overarching DPC. Goals. So I mean, when I say no less, that's equally important, especially in a business case context. We heard before from the research that it's getting more and more difficult to justify further investment before you can prove hard ROIs. That also means that, I mean, if you commit to a certain use case, For example, I mean, we talked about conceptual design before. Maybe at that given point in time, it's enough to use the standard fabrics in your 3D tool without investing into further digitization. Or if you have visual line planning as a prioritized use case, than where you are right now, how far could more of flat renderings take you? So not overinvesting is as— where we are at the moment as important. So let us take an example. And sorry for keep referencing the browser presentation that happened just here now. But we're kind of looking at the same example. If we take digital sampling, there are, of course, loads of different aspects of digital sampling. I mean, it could be how you collaborate with your suppliers, how could you be more efficient in that communication, et cetera. But if you're starting to detail your use case, and in this case, we take an example where you want to substitute physical sampling with digital sample. And in this case, it's an illustrative example. Let's decide that, all right, we don't want to target all samples at the same time. We know that there are different rounds. And of course, the further down in the process you go, the higher requirements you have on quality. This fictional example that we have here, we assume that the skill level of the team and the technical capabilities in place would be enough to target the early stage prototype sample and only focus on getting that right. So then, next step would be to— exactly what capabilities do we need to fulfill this? This use case from a people, process, data, and tech perspective. So for example, as a good starting point, what would be the required fidelity level or quality level of the sample to be able to do decision-making? Because sampling is all about decision-making. And how can we achieve that? Who is actually going to do the 3D? Is it our own team? Are we working together with our suppliers? Is there any upskill needed? Are there any basic capabilities that we don't have right now, but that we know our 3D tool is about to provide, or our PLM system will provide in the next few releases? Then it makes me— it makes worthwhile waiting for. So, all these considerations, detailing down. And depending on who you are, depending on your capacity and capability that you have, of course, you can see that, do you have the capacity to support 1, 2, 3, or what the more complex or the less complex use cases. But if you're mapping it out and if you're detailing the way that we looked at on the previous slide, if you do that with your whole portfolio, it will enable you to see if the capacity that you have available is enough. And again, also see that when in time, sequencing is as important as anything else, because you can really see how the different use cases relate to one another. There might be a certain capability that is only needed for one, whereas another will contribute to many. And then getting back also to the more relevant metrics aspect of this. It would also help you to identify potential goal conflicts. We had a prioritized use case in H&M in visual assortment planning. So one of the main use cases was to show a store environment in close to photorealistic fidelity, where you could merge drag-and-drop garments on your shelves, on your hangers, on your different places alongside with full product data and a sales algorithm. So you could see all that, the visual and the data in the same. So we could prove on a use case level that we could enable better decision-making, better business decisions with that. On the other hand, it also became evident that not only did it complicate the process, it actually prolonged the lead time. So, this kind of exercise would have made it more obvious to see how different use cases support or actually contradict one another. And obviously, you know, we saw really how you can break down the use case of digital sampling before, but in this particular case, we were talking about only substituting proto samples. Of course, you know, a few examples of how to set metrics there, but more importantly, how they're related to the other use case KPIs, to the DPC vision and goals, which then in turn contribute to the group strategies. So if we are wrapping up here, I see that the time is running out. So in summary, there is a disconnect between the overarching goals and the team-level activities, and that needs to be addressed. We talked about the DPC paradox and how that should make us rethink how we are setting goals. And please don't misinterpret me. Working on process change in order to close the lead time, certainly important. However, be realistic with what is actually influencing that, and maybe if you do the smaller use case-based things right first, it will be easier to go and move ahead once you are ready for it. And a use case approach makes 3D concrete and manageable. I hope that I have argued for that. And it helps you to secure the appropriate efforts in investment, no more, no less. We talked about that as well. And set the relevant targets and measures to keep the DPC program at pace. And if you're asking, Edvard, why are we using 3D? If you have this really clear portfolio use case, it will make your communications so much smoother. Thanks, Dominik, for that last insight that we talked about. Yeah. Right. On time. Fantastic. Thanks a lot for listening. And hope— no, no, I have this last slide as well where you can— we're not that many in this room, so I'm sure you can just speak up if you have any comments, reflections, and questions. Thank you. Yes?

Among the use cases you presented, which are those which fade faster into the whole return on investment topic? Like if you're a company, small to medium, you start with all of that, you need to convince management, we need money to invest into 3D topics. With which use case can you convince them?

I would say that the most common use case to start with is in the conceptual design, at least if you are starting to to educate your own teams in the tools. So there you can see there are some really fast benefits that you can see a better collaboration between your designer and pattern maker, for example. That's typically an area where technology has made a concrete change in ways of working. But I mean, I also see that there is a tendency to think that if you start by using 3D and educating your own teams, it will automatically mean that you would cut down on samples. But that is not the case. You need to recognize digital sampling as its own use case. And like the example I gave here, be true to where you are. Maybe start early and not go into the more complex cases too soon. What are the most complex cases? I mean, if you have a real end-to-end DPC vision, you see that you want to reutilize the same assets from supplier collaboration all the way to high fidelity photorealistic customer experience. And those use cases more on the customer experience side. And I think there has been some topics or think tanks on customer-facing virtual fitting. That is the top of the very— it's been so— yeah, but I mean, if we don't innovate, we're not getting there. But yeah, maybe start where you can create those tangible, realistic, measurable effects so that you can progress and build on it. Yes?

So we'll be super clear that we have clear idea about capturing the investment and return in digital through the testing stage. But we were talking about how to use the digital assets for other use cases such as the online marketing advertising.

Yes.

So what's the right path of marrying the technology with this business? Because for us, the 3D team got the technology understanding, but for that team, for the team themselves, they know better about the business. Then so how could we talk to each other and have better collaboration?

I think you said it yourself. I mean, at least you have identified the two main stakeholders to sit down and create that business case. Don't you think? I mean, because I was mostly engaged in product creation on the product side, not so much on the customer-facing side. So, we were catering for the fact that we knew that sooner or later they're going to wake up on the customer and going to want it. So, we tried to create standards and libraries so that we wouldn't have to redo the assets once that use case is woken up. However, the business case needs to be owned by the part of the organization that is actually responsible for it. So I would say your colleagues in sales and marketing, they need to own it, but they need to consult with the experts in the creation side. Yes?

What does your company do?

My company? We're consulting in exactly those kind of matters. So helping brands to plan and execute their DPC program. So I come from that side, like the business side of things, and I have colleagues that are more into the actual tools. Helping on those matters. And so Shoreline DPC, we are also committed to finding ways to see that the industry on the tech side is really like— we're talking a lot about silos internally at companies, marketing and I don't know different— But also on the vendor side, the 3D tools are really trying to keep everything in their own, and they have the PLM vendors doing the same, and they're pointing fingers. And we hope that we can play a role in bridging that gap.