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Monday, February 28, 2011

Democratization of Manufacturing

By Michael Fonda (Chicago)

Michael Farrell, my colleague from our Vancouver office, beat me to the punch but I’m still going to comment on 3D printing because as Michael said in his blog entry, 3D printing could turn out to be as disruptive a technology for manufacturing as the internet has been for the music recording industry.”

Last weekend I was in Brooklyn, New York visiting my son Tyler. Tyler is Director of Strategy at Gotham, an advertising firm. He is always thinking about where our culture is headed and as we drove down Third Avenue, he pointed out the headquarters of MakerBot Industries . He, like Michael, had read the Economist’s article on 3D printing and was describing the concept to me and I was intrigued.

Fifteen minutes previously, Tyler and I had driven through the financial district of Lower Manhattan. I was struck by the opulence of glass and steel structures occupied by the large financial institutions in comparison to MakerBot’s cramped 10,000-square-foot space in a 1920s vintage brick-and-mill building located in a grimy industrial section of Brooklyn called Gowanus. I decided that you can tell the financial engineers from the real engineers by their headquarters. Ironically, it’s the real engineers who fuel the growth of our economy. They are the whales navigating the economic oceans. The financial engineers are merely the pilot fish who can only survive by their proximity to the whales-those who possess the truly revolutionary ideas.

I had to get a peek at MakerBot. So Tyler and I walked from his apartment at 8th and 4th to the MakerBot headquarters at 3rd and Dean. We opened the door to the “Bot Cave” as the Maker Bot headquarters is affectionately known and introduced ourselves to Herb. No receptionist, just Herb sitting at the front door working on a project. Herb showed us the Bot Farm, a group of Thing O Matic machines (as the 3D printers are called) and some of the parts that the Thing O Matics were creating. Herb introduced us to Isaac Dietz, Support Manager of MakerBot, and a graduate of the University of Michigan. It was Isaac who introduced me to the term, The Democratization of Manufacturing. MakerBot builds its machines based upon open source architecture in order that collaborative invention can take place.

Suddenly, the future came into focus as I visualized how my sister-in-law and her husband would utilize 3D printing in their sunglass business Centerline Optics. They would no longer have to source product from China. No more ordering months in advance of their selling season. No supply chain risk of political upheaval in China, of a lost TEU on the Pacific Ocean, of a longshoremen’s strike at the Port of Long Beach, a diesel fuel spike that drives up the cost of transporting the product across the North American continent. All design, manufacturing, marketing, distribution, and sales would happen out of the Centerline “headquarters” in Old Lyme, Connecticut. Centerline’s customers are all within four hours of the “headquarters”. Talk about efficient allocation of resources.

Clayton Christiansen, Professor of Business Administration at Harvard Business School, authored The Innovator’s Dilemma in 1997. In his book, Professor Christiansen described how the mini steel mills, Nucor and Chaparral (by operating in a different value network-the commoditized, least-profitable end of the market, corrugated steel roof decking) used their experience and low-cost structure to produce finer and finer grades of steel. By continuously improving their product offering, the mini mills marched up-market, until they eventually challenged the large integrated mills, U.S. Steel and Bethlehem , in markets that seemed protected by what appeared to be barriers of entry that were insurmountable.

So, as a disruptive technology, the 3D printer could be “The Big One”. Like the mini mills, the product produced by the 3D printers will continue to evolve. There will soon come the day when, after you backed your Range Rover into a concrete pylon and shattered the brake light, you will pull up the design of the brake light on your pc and print out a new brake light right in your home or office. Talk about shortening the supply chain; it’s only a few steps from product production to installation. Don’t forget the screwdriver!

Check out MakerBot's blog here.

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