Three innovations — 3D printing, robotics, and open source electronics — are breaking that mold of manufacturing. They're ushering in a new era based on customization, on demand manufacturing, and regional, even local manufacturing.
Paul R. Brody
Huffington Post, 30 January 2014
The revolution brewing in electronics is unprecedented — even for an industry that is used to being upended. The rules that defined a century of innovation, design, and production are about to be rewritten. And modern manufacturing will be swept away.
Few companies grasp the coming upheaval. Perhaps because 3D printing, an innovation that can come across as a curiosity, is propelling this disruption. Yet, these printers, which churn out objects by laying thin layer after thin layer of metal, plastics or other materials on top of each other, won't tip the scale alone.
It's their collision with two other disruptive technologies — intelligent robotics and open source electronics — that will bring an end to the era of big and complex global supply chains. Together, they're going to usher in the digitalization of manufacturing, by creating flexible, fast, local supply chains underpinned by software.
The IBM Institute of Business Value recently conducted an in-depth, quantitative research that shows just how dramatically this new approach will drive down production costs, reduce barriers to entering a market, and shift global trade flows over the next decade. The study, The New Software-Defined Supply Chain found that:
- Within 10 years, the cost of churning out products using these new technologies will be 23 percent cheaper than today's traditional manufacturing approach. For example, by 2022, making hearing aids by using 3D printers and open source electronics would cost 65 percent as compared with current prices.
- The minimum volume of production needed to enter a market will drop by 90 percent. Which means that existing manufacturers could face a flood of new competitors setting up in small niche markets.
- The design cycle will speed up dramatically. Companies will use open source electronics to iterate and experiment more quickly with prototypes and 3D printing. They will then decide on the appropriate design, bypassing the need to build standardized parts, create dedicated molds, or design every piece in house.
- 3D printing and robotic assembly will upend far-flung manufacturing operations, undercutting the need for large supplier networks and extended supply chains. By 2022, the ideal manufacturing location will be local or regional.
The challenge is that manufacturing leaders aren't ready for the disruption they face. Some 70 percent of the supply chain leaders we talked to admitted that they had little or no preparation for this new software driven supply chain. The picture is bleaker when it came to their plans for the rest of the decade, which included more of the same old manufacturing investments.