The rising digital intensity of manufacturing Changing the rules of the game Irene J. Petrick Irene J. Petrick, Ph.D. ipetrick@ist.psu.edu SIM – DC City Club May 13, 2014 Abstract In the past several decades, manufacturers have seen disruptions coming from competing production technologies and from low cost global competitors. Today and into the future, the disruptions are coming from sources many don't even see coming. Specifically, the future manufacturing landscape will be enabled by developments in information technology. Access to high performance computing at a cost competitive rate will level the playing field for advanced modeling, analytics and simulation. When combined with developments in 3d printing/additive manufacturing, one-off highly customized production will compete with mass production. Current manufacturers will need to learn how these 3d printing/additive manufacturing technologies can coexist alongside their more traditional processes. As these tools become simpler to use, Internet-savvy hobbyists and do-it-yourselfers will effectively be able to challenge very established firms. Cloud supported services will be a viable replacement for extensive enterprise resource planning and customer relationship management systems and will provide the real time visibility into the supply chain and production environment that customers will demand. And the final IT based enabler that will democratize manufacturing? Social-media based funding models such as Kickstarter. In the coming decade the installed base that has been a barrier to entry for new firms will become a barrier to change for many established manufacturers. © Irene J. Petrick 2014 SIM • Assertions – 3D printing/additive manufacturing is ON THE HORIZON and will achieve end-part quality in multiple materials in the coming years – The roles and rules of traditional supply chains are becoming obsolete – Competition will come from unexpected participants – Economies of scale will go from a barrier to entry to a barrier to change • Economies of One will coexist and compete with Economies of Scale • Digitally intensive tools will change the face of manufacturing © Irene J. Petrick 2014 SIM IT driven trends in the production & operational environment Trend 2: Additive manufacturing attains commercial viability for multiple materials Trend 3: Cloudbased IT solutions reduce administrative overhead for smaller enterprises and enable new business models Design & production as experimentation Trend 1: Technical (high performance) computing capabilities enable complex design and simulation © Irene J. Petrick 2014 FUTURE SCENARIO IT driven design and production enables Economies of One The rise of the “Any Man” Trend 4: Social media-based funding models democratize production investments Trend 5: Internet savvy do-it-yourself hobbyists embrace open source innovation tools SIM “Any sufficiently advanced technology is indistinguishable from magic.” -- Arthur C. Clark • Where is the magic? – – – – © Irene J. Petrick 2014 Design Production Post Production Delivery/distribution SIM Simplified ecosystem Design Production Post Production Distribution • Well understood roles & responsibilities • Reducing complexity is key to competitive advantage • Design as a “finished” input to production © Irene J. Petrick 2014 SIM Changing nature of design & designers Scanners, Smartphone Apps Reverse Engineering & Modeling Modeling External and Internal Features Design Hobbyists & Prosumers Internet Design Files & Kits App Designers Animators Engineers Architects Manufacturers Design Firms Design Software ISVs, Computing Hardware Converters & Translators Physical Digital 3D Printer Unique Firmware Printer Manufacturers Digital Actionable Standards, File Formats, Instruction Sets, Design Rules Imagination Digital Customization, Solid Models, Surface Models © Irene J. Petrick 2014 SIM Changing nature of production & post production Polymers, Powders, Binders, Gas Materials Producers, Auxiliary Suppliers Experimentation & Redesign Collaborative Innovation Design Physical Feature Testing Inventory Sites Materials Producers, Printer Makers, Distributors 3D Printer Unique Hardware Part Characterization, Material Handling, Recycling Net/Near Net Shape Parts Printer Manufacturers Process Parameter Framework Toolpath, Process Plan, Machine Parameters, Support, Orientation, Material Parameters Post Post Production Production Fixturing & Material Removal Surface Finishing Feature Enhancements Heat Treatment © Irene J. Petrick 2014 SIM Changing nature of distribution Printer Hubs 3D Printer 3D Printer Printer as the Ultimate FAX Machine 3D Printer Internet File Design Local Manufacturing or Traditional Shipping 3D Printer Post Production Direct Distribution Local Manufacturers UPS, USPS, FedEx © Irene J. Petrick 2014 SIM The dynamics of Economies of One … • Fewer clear boundaries in the designbuild-deliver paradigm • Design and production as experimentation • Modeling & designing-in complexity yields competitive advantage • Proximity matters • From long-term planning to real-time planning • IT becomes a critical skillset © Irene J. Petrick 2014 SIM The return of the artisan entrepreneur Local Artisan & Craftsman Production Manufacturing Returns to the Garage Mechanization Urbanization & Capital Consolidation Centralized Production & Delivery Modern Transportation & Information Systems Internet-based Business Processes & Design with Virtual Manufacturing Production Centralized Production with Distributed Low Cost Supply Sourcing & Distributed Delivery Mass Customization & “My Way” Consumer/Customer Demand Competitive Advantage through Economies of One © Irene J. Petrick 2014 Competitive Advantage through Economies of Scale & Scope SIM myFactory Cubify.com TheMicro.com – Kickstarter Funded QUESTION: Who is a manufacturer? Who is a designer? © Irene J. Petrick 2014 SIM Cloud-based business models Makerspaces, Job shops 3D printer hubs Prosumers Engineers Architects Distributed Network of 3D Manufacturers Virtual Factories Intermediary © Irene J. Petrick 2014 SIM For existing manufacturers … Great gifts • Customization is feasible (Economies of One) • Production of replacement parts is simplified • Manufacturing is sexy again • Entrepreneurs drive change in unanticipated ways © Irene J. Petrick 2014 Serious challenges • We don’t know how to design for this technology • Cloud-based business models enable artisan entrepreneurs to compete • Extensive installed base is a barrier to change • Digital intensity increases the demand for skilled IT professionals SIM The future is here… © Irene J. Petrick 2014 SIM Dr. Irene J. Petrick is a Penn State University professor and managing director of the TrendScape Innovation Group. She is an internationally recognized expert in strategic roadmapping and has been actively engaged in advanced manufacturing issues. Her research interests include technology forecasting, collaborative innovation and business ecosystem development. She is actively engaged with companies in their innovation and technology strategy activities, including work with twelve Fortune 100 companies, the U.S. military, and a wide variety of small to medium sized enterprises. She has over 25 years of experience in technology planning, management and product development in both the academic and industrial settings. She has been named a Boeing Welliver Fellow, a CSC Faculty Intern in India, and has spent three summers full time with Intel Corporation focused on innovation strategies (2010-2012). Irene is author or co-author on more than 150 publications and presentations. (http://strategic-technology-roadmapping.com/) © Irene J. Petrick 2014 SIM