Welcome to the age of democratized industry, where the most powerful players in manufacturing are handicapped by overcapacity, aggressive competition, a lack of new ideas, and cheaper, more accessible technology, creating a new field of play.
This is the world, according to Chris Anderson. The editor-in-chief of Wired writes in an audacious cover-story for the February issue that in the age of the Internet and DIY cultures, micro-factories are the future of American manufacturing. "As ideas go straight into production, no financing or tooling is required," Anderson writes.
That might be a tad simplistic, but it does raise a compelling question: what is the future of manufacturing and has its very definition been changed by the advent of new technologies?
The manufacturing landscape has certainly been fundamentally altered by the instant relaying of data on the Web; by the evolution of supply chains, which are now able to accommodate manufacturers of any size; of factories in any country being able to provide custom work at the click of a button; and highly sophisticated tooling, such as CNCs and 3D design tools, reducing substantially in price.
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"I don't disagree with some of what Anderson points out," says Douglas Woods, president of the Association of Manufacturing Technology. "His model is great if you're a guy making small quantities and just want to prove you can do it. It's great for prototyping and initial design. But when it comes to making large quantities and doing it with quality and customization? The argument falls a little flat."
Nor does it answer some of the deeper, more complex issues of how to revitalize America's struggling manufacturing base. As an employer of roughly 12 million workers in the domestic economy, manufacturing has eroded under the weight of a sputtering economy, the steady off-shoring of production to low-cost countries, and an emerging group of dynamic competitors.
According to Woods, the economic model by which American manufacturing policy has been crafted for the last 30 years has been deeply flawed.
"You're seeing a shift from the neo-classical economic approach, by which you off-shore everything, assuming everything balances out in the end with high-tech jobs," says Woods. "Now it's shifting to what I'd call innovation economics. That refers to the belief that technologies are going to come about that are going to change what you thought was the norm. It's the belief that production efficiency and adaptive efficiency are the two key elements that you need to drive a business."
Anderson, no doubt, would agree with Woods' thesis. The foresight and innovation of entrepreneurs is the driving force to any long-term economic growth, even if it ultimately destroys companies that have held a monopoly of power.
But Woods also believes that refueling America's manufacturing base begins not just with an individual's vision and ambition, but by making significant revisions to the manufacturing policy landscape coming out of Washington.
Next week, Woods will be traveling to the White House to meet with Ron Bloom, senior counselor for manufacturing policy, and will lay out a plan for revitalizing the American industry.
Woods will propose opening up greater access to lines of credit to spur investment among manufacturers, along with the tabling of any new taxes or emissions regulations for at least one year. He will also suggest expanding the use of manufacturing extension partnerships (MEP).
"We're not using them very well at all," says Woods. "What I'm focused on are issues relative to education, R&D tax credits, and government funding of programs using the MEP channel to drive those through."
The vision of "virtual manufacturing" might sound romantic to the ear and certainly play to the entrepreneurial spirit of Wired's editor-in-chief. But it isn't realistic or plugged into the far more complex nature of industry today.
"The reality is this: if you don't have some semblance of manufacturing skill around you, inevitably you're going to wind up in a situation where everything, including the R&D and design, is done someplace else," says Woods. "And the economy you want to have these products sold in will not be there if there's no manufacturing. That's what we're facing."