Enabling Manufacturing Hackatons

One of the things that you find in trying to innovate and develop software is that it is hard to outsource the coding elsewhere.  While there are exceptions to this rule, one sees the spur to innovation built into a process where people are able to tinker with and iterate their ideas in a hands-on fashion using simpler and more powerful software frameworks.

I have posted previously about coding reality with tools such as 3D printing, having the effect of unleashing that same dynamism into manufacturing. Extending the logic of the experience in software, a prerequisite to having that happen is keeping a base of manufacturing in this country. This defies the often-stated logic that the outsourcing of manufacturing is not an issue if high-value, innovative tasks remain in the country.

There is a lesson in this from the innovation of the spine of Germany’s economy – the centuries’ old Mittelstand system or the small and medium-sized enterprises that account for 70% of its employment.  As described in this FT excerpt, at the core of keeping the innovation of Mittelstand, was keeping production capacity within Germany, as there is a manufacturing ecosystem that is disrupted by losing manufacturing capacity.

Carl Miele imprinted the motto Semper Melior, or Always Better, on his company’s first washing machines more than a century ago and that ethos of constant improvement remains the same. Like other Mittelstand companies, Miele has always focused on the premium segment.

Developing and manufacturing products in Germany has also helped its engineers to develop new ideas. “Having production capacity in a country is important as without that it is harder to improve and innovate – some of the knowhow goes missing if production capacity is lost,” says Markus Miele, great-grandson of the founder.

Hermann Simon, chairman of Simon-Kucher & Parntners, a consultancy who will this month publish an updated version of his book on Germany’s “hidden champions”, says: “There are some Mittelstand companies who file more patents in a year than an entire country like Portugal or Greece. That’s where it starts.”

A Nation of Tinkerers

As I noted a couple of weeks ago, the winds are set to blow more manufacturing back to the US over the next 20 years.

The first reason that I noted in that post is the changing demography of China.

The second reason — and topic of this post — is the changing nature of manufacturing and the opportunities it creates by opening up innovation to a much larger group of people.  Right now, we have an incredible wave of innovation from people who have ideas of digital things or services who can make them into actual digital things and services; think Facebook, Google, Linkedin, Instagram, etc.

That same creativity and energy applied to physical objects would be deadly.  The advent and spread of 3D printers allows those with ideas of better manufactured objects to experiment and invent those actual better things.  As I noted at the beginning of the year:

The synthesis of customer expectations that do not need to be compromised along with the artisan instinct to not have to compromise could spark a creative and entrepreneurial blossoming such as we have not seen.

It’s coding real life.  As a special report on manufacturing and innovation in the Economist says, the result of this will make it more attractive to keep manufacturing in the US:

As manufacturing goes digital, a third great change is now gathering pace. It will allow things to be made economically in much smaller numbers, more flexibly and with a much lower input of labour, thanks to new materials, completely new processes such as 3D printing, easy-to-use robots and new collaborative manufacturing services available online. The wheel is almost coming full circle, turning away from mass manufacturing and towards much more individualised production. And that in turn could bring some of the jobs back to rich countries that long ago lost them to the emerging world.

The Demographic Tea Leaves and American Manufacturing

The winds are set to blow more manufacturing back to the US over the next 20 years.  One reason is demographic.  Another reason is the nature of manufacturing innovation.

This post looks at demography, while future posts will look at what is happening with manufacturing innovation.

The demography changes that matter for America are those in China.  China rode the demography wave on the way up, drawing its large workforce from the country into urban factories, providing historical capacity to make shoes, toys, iPads, and what have you for the world.  Because its one-child policy is catching up to it, its rapidly aging population is not being replaced by enough younger workers, either to support the costs of caring for the old or to replace the former pools of cheap labor. From now to 2050, the share of the Chinese population that is of working age will fall drastically, while the number of elderly dependents is rising, creating a potentially economically destructive imbalance.

This will have profound internal societal, as well as global economic effects.  In terms of the latter, the Chinese workforce that builds and assembles for the rest of the world will not be as flexible, whether in terms of price, skill, or availability, as it is today.  (Think of recent coverage about the ability of the Chinese workforce to expand to prepare for a new Apple product launch.)

Here is where the contrast with American culture comes in, showing America’s special flexibility to support innovation.  The Economist writes this week:

The shift spells the end of China as the world’s factory. The apparently endless stream of cheap labour is starting to run dry. Despite pools of underemployed country-dwellers, China already faces shortages of manual workers. As the workforce starts to shrink after 2013, these problems will worsen. Sarah Harper of the Oxford Institute of Population Ageing points out that China has mapped out the age structure of its jobs, and knows for each occupation when the skills shortage will hit. It is likely to try to offset the impact by looking for workers abroad. Manpower, a business-recruitment firm, says that by 2030 China will be importing workers from outside, rather than exporting them.

Large-scale immigration poses problems of its own. America is one of the rare examples of a country that has managed to use mass immigration to build a skilled labour force. But America is an open, multi-ethnic society with a long history of immigration and strong legal and political institutions. China has none of these features.

Personalized Manufacturing

I blogged about the Maker Movement — that movement aiming to disrupt the physical world in ways reminiscent of what is going on in the digital world.  New technologies that let artisans and entrepreneurs create physical products, personalized to express their creativity, at much cheaper cost also mean that customers will be able to imagine and expect more variety and personalized manufactured products.  The synthesis of customer expectations that do not need to be compromised along with the artisan instinct to not have to compromise could spark a creative and entrepreneurial blossoming such as we have not seen.

Peter Marsh in the FT has an interesting essay from which I excerpt below:

Manufacturers have always faced one problem, however: how to make complicated and novel items accurately in small quantities. The struggle has been to accommodate the opposing aims of speed and efficiency on one hand, and flexibility and variety on the other.

The emergence of “personalised manufacturing” promises to resolve the contradiction. Using computerised designs, techniques such as three-dimensional printing will enable businesses based in Birmingham or Belize to make complicated parts for products from forklift trucks to space rockets that could be assembled virtually anywhere. Customer choice over how the artefacts look will increase, with only minimal compromise concerning quality or cost.

This development places the world on the brink of the fifth era for manufacturing: “mass personalisation”. In 3D printing – also called “additive manufacturing” – machines based on advances in electronics, laser technology and chemistry build up complex shapes from granules of plastics or metal.

“It adds up to a new industry which reduces immensely the gap between design and production,” says Ian Harris, from the Additive Manufacturing Consortium, a US-based industry think-tank. “Manufacturers will be able to say to their customers, ‘Tell us what you want’ and then they will be able to make [specific products] for them.”

Mass personalisation opens the door to a period of much deeper creativity. Big and small companies will find the inherent restrictions of the interchangeable parts system that began in Venice start to melt away.

The Maker Movement

This blog is about the innovation enabled by the Internet in its many incarnations and the industries that have been disrupted by non-experts. The digital world has empowered almost anyone to take on incumbents.

But what about hacking the rest of the world?  Imagine the same revolution in the tactile, physical world, as that same creativity inherent in so many folks, when enabled by tools that allow it as proven in the digital realm, is unleashed in physical products — furniture, housewares, clothing, anything 3-D, etc. These tools enabling this physical creativity include hardware such as Arduino micro-controllers, 3D printers, and software such as Google Sketchup. Here and here are some overviews of this movement.