With the rapid development of the C2M trend and the gradual normalization of the demand for customization, how do discrete manufacturing enterprises cope with the operational challenges brought by this background? This white paper shares Siemens Avendar’s thinking on this issue from the perspective of digital transformation.

Executive summary

C2M (Customer-to-Manufacturer) realizes the direct connection between users and factories, eliminates all intermediate circulation and price increase links, connects designers and manufacturers, and provides users with cost-effective products. Since 2020, affected by the epidemic, C2M demand has grown explosively, greatly increasing in breadth, depth, and granularity, and it is expected to become a trillion-level blue ocean market in the future.

On the demand side, with the development of e-commerce and digital technology, through the online purchase behavior, cognitive process and demand interaction of consumers, with the e-commerce platform as the medium, the complete extraction and capture of consumer personalization has been achieved, and the development of C2M has been greatly promoted. On the supply side, the operation level of production enterprises is not enough to support the C2M model, and it is necessary to comprehensively promote digital transformation and greatly improve the operational efficiency of design, planning, supply chain and production links in order to enjoy the dividends of the C2M market.

In the discrete manufacturing industry, the customization brought by C2M has also gradually become the norm, whether it is consumer goods (such as automobiles) or industrial products (such as machine tools, forklifts), users have put forward more and more customized needs, which need to be met by discrete manufacturing enterprises.

For discrete manufacturing enterprises, the development of customization trend has brought many challenges to enterprise operations. From the perspective of value chain, in the value chain of business performance, enterprises face the challenges of difficult cost estimation, low efficiency of product design, slow generation and transformation of bill of materials (BOM), difficult supply chain coordination, low production efficiency and long delivery time and high cost. In the product management value chain, it is difficult to grasp the needs of users, and the complexity of product verification and product portfolio management has increased significantly. In the asset operation value chain, flexible production, production line commissioning and verification, and equipment parameter tuning are the core challenges.

1, the rapid development of C2M trend, through the demand side reverse customization, to promote the supply side structural reform

The C2M trend is on the rise

C2M (Customer-to-Manufacturer) realizes the direct connection between users and factories, eliminates all intermediate circulation and price increase links, connects designers and manufacturers, and provides users with cost-effective products.

For consumers, the C2M model emphasizes user-centered, organizes production according to users’ individual needs, and attracts consumers to join the product design process, effectively stimulating market vitality and social creativity. For manufacturing enterprises, the C2M model improves the productivity of traditional production factors and promotes the transformation of enterprise production lines, supply chains, internal management systems and even the entire business model.

Since 2020, affected by the epidemic, C2M demand has shown explosive growth, rapid development in three aspects of breadth, depth and granularity, and will become a trillion-level blue ocean market in the future.
• Breadth: The covered categories continue to expand, including automobiles, shoes and clothing, digital, home appliances, sports equipment, bags, accessories and other dozens of categories;
• Depth: The links involved in the previous relatively simple product design and development, to the complete product life cycle penetration, including pricing, marketing, service and so on; Massive accurate data mining analysis services, but also allow consumers to fully enjoy the most suitable for their own goods and services;
• Granularity: The Internet platform continuously subdivides the granularity of population and region analysis, and meets the needs of each subsegment and region through more accurate data and more mature analysis.

Demand side: With the development of digital technology, users are personalized

Requirements are fully captured

The personalized needs of users have always existed. However, in the traditional business model (B2B2C), consumers’ purchasing behavior and cognition process of goods are all offline, and the production side cannot effectively capture them, so it cannot meet the individual needs of consumers.

The rise of e-commerce and digital technology has changed that. First, make consumers’ purchasing behavior online and convenient; Second, e-commerce helps brands transfer consumers’ cognitive process (mental cultivation) of new products online; Finally, consumers can connect with e-commerce through social networks, so as to extract and capture consumers’ personalized needs through e-commerce platforms.

The world’s leading e-commerce penetration rate allows China’s Internet retail platforms to have big data that reflects the needs of each market segment, and thus complete data mining to guide the manufacturing side. Since 2018, Jingdong, Ali, Pin-duo, Suning and other mainstream e-commerce companies have launched C2M platforms, with the help of a large number of users and channel resources accumulated in the traditional business model, supplemented by strong capital, to rapidly promote the development of C2M.

Supply-side: Enhance competitiveness through differentiation, but internally