Next-generation IT has big shoes to fill

What do 3D printers, the difference between process and practice, and the increased demand for luxury goods have to do with a 7-foot, 8-inch-tall basketball fan with size 25 feet?

The answer: Together they provide a case study for the future of both manufacturing and information technology. For next-generation IT leaders positioned to anticipate this custom-tailored future, rich rewards on the executive team await.

[ Find out the 10 business skills every IT pro must master. | Get expert advice about planning and implementing your BYOD strategy with InfoWorld’s 29-page “Mobile and BYOD Deep Dive” PDF special report. | For more of Bob Lewis’ continuing IT management wisdom, check out his Advice Line blog and newsletter. ]

The cost of mass producing one item

The basketball fan is Igor Vovkovinskiy. Because his feet are far bigger than any off-the-shelf shoes, his life has been an endless cycle of walking around in the only shoes he can get, which damage his feet, requiring surgeries to fix them, followed by more walking around in ill-fitting shoes. But the cost of manufacturing shoes that will fit Vovkovinskiy’s feet is high — in the vicinity of $16,000. (Reebok, to its credit, is building a pair for him pro bono.)

Without a doubt, for Reebok or any other shoe manufacturer to build a pair of custom-size shoes will be this expensive. That’s because they’re shoe manufacturers, optimized for creating large numbers of identical items. Manufacturing is a process — it’s a way to organize work characterized by:

• High fixed costs (the factory)
• Low incremental costs (economies of scale)
• High quality (absence of defects)
• Low excellence (tailoring and customization)

Along come Mr. Vovkovinskiy’s size 25 feet. For Reebok, taking care of them is nothing but one-off work that requires (according to the Associated Press), “a complex shoe-fitting that involved, among other things, custom pressure-mounting equipment, imprints in bio-foam, a powerful three-dimension scanner to map the shape of his feet, calipers to take precise measurements of length, tape measures and a handful of technicians.”

Craft production versus mass production

But imagine we were a society in which cobblers still thrived — people who practiced the craft of custom shoemaking. Further imagine that a cobbler would consider $150,000 to be a decent year’s gross income. If our imaginary shoemaker could produce a custom pair of shoes for Mr. Vovkovinskiy in a couple of weeks, everyone would end up ahead of the game. As the practice of making custom shoes wouldn’t have to change all that much to accommodate feet that are still, other than being bigger, the appendages at the end of someone’s legs upon which they walk, there’s every reason to think a competent cobbler could have satisfied Mr. Vovkovinskiy and been happy to do so.

Unlike processes, practices are designed to have low overhead costs and high levels of excellence. Taking care of needs like those of a customer with size 25 feet is what they’re for. The problem, of course, is that there probably aren’t enough customers like Mr. Vovkovinskiy — who would consider $6,000 to be a bargain price for a pair of good-fitting shoes — to keep your average shoemaker in business.

Build to order: The middle ground between process and practice

Custom shoemakers do still exist. The delightfully named Shoes of Prey, for example, sells custom women’s shoes for prices Mr. Vovkovinskiy would find extraordinarily reasonable, in the hundreds-of-dollars-per-pair range. They don’t, however, offer shoes in his size, nor, I imagine, in styles he’d find to his taste.

Businesses like Shoes of Prey are springing up because of the growth of the luxury-goods market, as described in this space last June. As luxury is comparative, not absolute (if everyone around you wears a Rolex, a Rolex isn’t a luxury watch anymore), selling custom-tailored merchandise is exactly what this growing market segment wants.

The shoes themselves aren’t, however, truly custom. While handmade, they fit a process model known as build-to-order — how Dell manufactures “custom” computers. Shoes of Prey lets customers choose from the cobbling equivalent of different-sized disk drives, RAM chips, and processor speeds, all of which are bolted onto a standard frame.

What prevents Shoes of Prey from making truly custom shoes is the last — a foot-shaped form around which its employees assemble each pair of shoes. The more closely their last matches a customer’s foot, the better the fit. Shoes of Prey’s build-to-order process starts with the last taken from its inventory of standard foot sizes and shapes.

Add 3D printing to the equation, though, and everything changes.

How 3D printing can turn build-to-order into customized products

Turning multiple digital photographs into a 3D model is, by now, a well-established technology. Feed it a bunch of photos of your feet, send the output to a 3D printer, and voilà! You get custom lasts, from which a shoemaker can make you truly custom shoes, perfectly fitted to your — or Mr. Vovkovinskiy’s — feet.

(I am, admittedly, oversimplifying this: Size 25 shoes worn by someone nearly eight feet tall contend with structural stresses more severe than most of us inflict on our shoes. Structural scaling requires more than just adjusting the dimensions.)

What this has to do with IT

Consider the applications portfolio for a modern shoe retailer. Like any other retailer, merchandizing is the core process: Deciding what to carry, in what sizes and colors; negotiating deals with every supplier for every item; tracking what sells and what doesn’t; deciding what goes on clearance and when; and actually buying and paying for the stuff, is a very complicated proposition. All of it, including every term of every deal, has to fit into the company’s merchandizing system.

Then there’s inventory management. The retailer has to track every style, size, and color. If it has store outlets, it has to manage distribution to each store in the chain (logistics); if it sells over the Internet it has to pick, pack, and ship (fulfillment).

Then there’s product information management: The more SKUs, the more photos, descriptions, and so on.

Here’s the gross generality: Traditional retailers know a lot more about their products than they know about their customers, and their processes are all about product management. That’s how it has to be, because in their own way, traditional retailers are in the mass production game, selling large numbers of identical items to whoever happens to want them.

Contrast this to our mythical custom shoe shop. It’s Internet only. Its physical inventory consists of raw materials, not finished goods. Because physically storing each pair of customized customer lasts would take a lot of space and a lot of tracking, it doesn’t do this. Instead, it stores the digital description for each customer, re-creating lasts as needed and recycling them once an order is finished.

Merchandizing still matters, but it’s very different: It will be about materials, colors, and patterns, not about negotiating deals with shoe manufacturers.

Two gross generalities about our next-gen custom-shoe retailer: First, it’s in the information business in a much deeper way than a traditional retailer — its “inventory” is mostly digital — with the database of 3D models of its customers’ feet. Second, it knows a lot more about its customers than about its products — another gigantic change in orientation.

This means, among other things, that existing shoe retailers are very poorly suited to entering this game. Their entire infrastructure, business knowledge, and culture all point in exactly the wrong direction.

Imagine you run their IT department. You’re in a better position to identify this opportunity and threat — and the mismatch between the capabilities the company has and what it would need — than anyone else on the executive team. And what everyone else in the room knows is custom-tailored to keep them from understanding the strategic situation as you understand it.

Welcome to next-gen IT.

This story, “Next-generation IT has big shoes to fill,” was originally published at InfoWorld.com. Read more of Bob Lewis’ Advice Line blog on InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.