Digital manufacturing coupled with mass customization software means that you can design products faster. Customers, partners or people in your firm can make quicker iterations of products, working alone or as a part of a team. Products can be redesigned quickly, you can respond to the market more rapidly, produce niche products and perhaps even anticipate market demand. Faster product design accelerates innovation and competition.
Globalization was initially a bit of a one way street with technologically advanced products from wealthy nations being exported in return for natural resources. Today we are seeing products from developing nations throughout our supply chains. Whereas China is seen in a rather orientalist way as “the workshop to the world” and a purveyor of inexpensive low quality things, this will change. As we have seen with Japanese cars and consumer electronics a higher focus on quality and margins will propel Chinese and other manufacturers upward. We are already seeing companies such as Huawei, OnePlus and Xiaomi attempting to join the global ranks of premium mobile phone brands. Whereas it took Japanese and Korean companies decades to cautiously enter global markets the rapidity of Chinese vendors in doing this is astounding. Oppo the company behind OnePlus is 16 years old, OnePlus started in 2013 and now has over $300m in revenue. Xiaomi is only six years old and is a $20 billion revenue company. China’s huge internal market is a reason why these companies can expand so quickly. Another is that rather than rely solely on keiretsu or chaebol groups of large companies to create export products, the Chinese government is encouraging entrepreneurship and backing large firms such as Huawei. The consumer drone industry is only a few years old and was a very competitive one. The clear leader currently in the industry is DJI, the six year old company has $1.5 billion in revenue and saw off global competition to be the biggest player in the field. It is clear that Chinese firms are in many markets pursuing higher end manufacturing. This increased competition will put pressure on European and American manufacturers.
Santa’s Elves versus the mittelstand
Many companies worldwide are insulated by barriers to entry or niche industries from real competitive pressure. Established brands or markets have let them be comfortable. Many mittelstand companies in Germany for example have for decades been able to quietly build and improve their products gradually in order to rein supreme in a little understood niche. China was seen by many as a maker of counterfeit goods or a place where only low quality things were made. The idea of competition from China and other countries was seen somehow as a potentially scary ghost at the banquet. Yes, it may be there but it wasn’t real. Surely they won’t make high end tire making machines, industrial robots or aircraft parts? The flood of low quality Chinese goods reinforced this belief and made people less vigilant than they should have been. Whatever it is that you do, whatever it is that you make 100 guys on Alibaba are making the same thing. They’re usually contract manufacturers getting by on single digit margins, wholly dependent on price to survive the quarter. Competition is fierce and cutthroat. If you owned a Chinese factory, what would you do? What is the fastest way for you to get out of the cutthroat business of making on a contract? What is the easiest most straightforward path? To directly produce and sell branded high quality products. Interestingly the issue for many Chinese companies now is that they lack channel access or distribution in other markets. This may actually turn out to be a long term advantage for some as they could then directly sell to end use consumers rather than be tied to their channels. Most manufacturers in China and other places have a long way to go before the quality of their products and brands matches those in other countries. Quality control and quality improvement processes need cultural change in companies, often, and require time and investment. Branding and marketing however is something that you can rent from people. Whatever competitive pressure you feel now, it will be exacerbated by higher quality and higher value goods from overseas.
In highly regulated industries stopgaps exist slowing down competition. In some other industries intrinsic things may insulate companies from competition. Italian pasta will be seen as more authentic and French fashion will always have an edge because of the brand of the country. Wine was considered to be a quintessentially French thing too though, once. So, there may be exceptions. On the whole though competition will increase. How to respond to this? Better marketing, better OE, better strategies, more R&D and many other potential answers are possible solutions. One solution would be to speed up go to market and product development cycles using digital manufacturing coupled with mass customization software.
Similar to Agile software development Agile Engineering lets you develop products according to user value while working in small teams. Rather than map out a route into an unknown infinity, Agile engineering sets one off on a path where requirements and priorities are continually assessed and redefined. An Agile approach to hardware engineering and product development may not work in every industry. If industries are fluid and competitive pressures are high and the competitive environment is perennially changing Agile can give a company edge. If products are launched quickly and can be continually redefined then Agile is especially valuable. Even with very complex products Agile can develop better solutions for parts of these products or better direction for the whole product. By focusing on what matters to the user products can be a better fit for what the user wants and teams focus their time on building functionality that the customer values.
Even if the entire Agile process can not be adopted, digital manufacturing can usher in new practices which can speed up product development cycles. By iteratively producing series of prototypes of your final part you can test and improve the part throughout the development process. Truth points and clearer discussions, by using the 3D printed prototype as a focal point for the discussion for example, can take place. Looking at a product as a thing that can be improved over time and pushing for this thing to in a more accelerated way be improved gradually by making more versions will make products more granular. Small items and problems can be identified and found.
Redesigns from feedback or testing
By getting to a 3D print quickly and testing this print more information can be found earlier on in the cycle. Vendors, partners, customers or staff can concretely indicate what should be changed about a product while touching it. Mock ups of the final product can be made and shown to focus groups. Problems and issues can be identified earlier on in the process helping to eliminate problems later on.
Respond to market using digital manufacturing & mass production in tandem
By using digital manufacturing in the product development cycle, the cycle can be accelerated. Through using 3D printed parts in existing products a mass manufactured product can quickly be customized. If we think of something such as a speaker, the core functionality of it could be manufactured using other methods. The casing could also be a mass manufactured item. 3D prints could then be added to it to alter the look and feel of the product. This could mean that the manufacturer could release 10 different versions of the same product to different markets or niches. In a very lightweight way one product can be transformed into one specifically made for young women, another for technology nerds, another for design oriented people etc. This will let the product better meet customer’s needs. If the software and 3D printing/digital manufacturing supply chain is well managed many more versions could be made cost effectively. The manufacturer can make a speaker version specially for the summer or in conjunction with a film festival. If gold colored matte plastic becomes a trend the manufacturer can release a special version to capitalize on this trend. If there is a sudden interest in speakers being encased in book cases the manufacturer can make a kit to let people do this. One design that has to work can become a 100 that may work.
One can also go further than this by implementing mass customization on top of this system. This will let consumers design exactly what they wish to have. In this way one single design coupled with software and 3D printing becomes a million designs. The core product itself will not have to be altered. The functionality remains inside the speaker and the only things that are added to or changed are outside of this core functionality. A single product can then be repurposed and redesigned into millions of potential versions.