Presentation of the Software-Defined Supply Chain that provides a point of view on the transformative potential of 3D printing, advanced robotics, and open source electronics hardware on manufacturing and supply chain as we know it today. This presentation was delivered to the CSCMP (Council of Supply Chain Management Professionals) on September 17, 2013.
Other industries that have been digitized and disrupted are:Travel – Travel agencies have had to transform themselves. Online players such as Priceline.com and Expedia.com dominate the travel industry.Retail – Amazon is one of the largest retailers.
That’s a little about my background. Now to the topic du jour. We at IBM believe that a major industrial paradigm shift that we at IBM believe is about to happen. This transformation has already started and is poised to change the hardware-constrained, “analog” way that we design and manufacture products today.We see that three technology trends are reaching their tipping points, converging and making possible, new, digital, software-driven possibilities in designing and making products. These trends are 3D printing, intelligent or advanced robotics, and open source electronic hardware. Imagine, products that can be printed on demand, intelligent shop floors that can be dynamically reconfigured to produce a wide range of products, and digital products that are controlled by multi-purpose electronic components that are configured and controlled by software. What does this mean for the customer? Products where and when you want them!
Let’s explore these three technologies starting off with 3D printing. You have probably heard a great deal about 3D printing in the media and the press.Believe it or not, 3D printing has been around for 20 years. 3D printing went relatively unnoticed in the first “Jurrassic Park” movie. That was 1993. Only recently has 3D printing come into the spotlight. What makes 3D printing so transformative in the industrial context?Firstly, it is the ability that 3D printing provides to manufacture products on the fly without the constraints of traditional manufacturing methods.Secondly, the digital nature of 3D printing allows a single printer to fabricate a tremendous variety of objects without the need to retool your shop floor or change your manufacturing process, thus affording you tremendous economy of scope. Thirdly, most forms of 3D printing reduce material waste given that it is an additive method of fabrication. You only use as much as you need to create the object. Finally, 3D printers are getting cheaper very fast. 5 years ago, a 3D printer would have cost you at least $15K. Today you can buy a desktop 3D printer from Makerbot for only $300.
Not only can you design amazing structures with 3D printing, you can fabricate assembled products straight off the 3D printer.Here is an example of a hand cranked fan that is available for print on Shapeways.com.No assembly required at all. The 3D printing of integrated chips is just a few years away. Imagine being able to 3D print a complete, assembled electronics device. Amazing!
The possibilities are truly endless. Even today, 3D printing is being used to produce a wide range of things including:Body parts and organsFootwareFoodFashionThis is just the beginning. I could go on all day, but this should give you an idea of the possibilities with 3D printing.
Next, we have advanced robotics. Robotics has made some important advancements that make robots such as Baxter by Rethink Robotics a viable and economical alternative to human labor, especially for repetitive, unskilled tasks.The robots of today such as Baxter are intelligent and have the ability to learn with the guidance of a human trainer. These robots are also can be used to perform a variety of tasks and purposes based on context, allowing them to be multi-purpose tools on the shop floor. Baxter and some of the new generation of industrial robots are able to sense their environment and can operate safely in the proximity of people. Now automation through robotics is an economic possibility for more than just the biggest companies.Finally, these robots are getting cheaper. Baxter costs only $20,000!
About a week ago, Volkswagen announced that they are now using collaborative robots from the Danish manufacturer Universal Robots, which can operate next to people without guards, to build engines. This is happening today, not tomorrow. Today.
Finally, we have open source electronic hardware. The two popular camps for open source electronics hardware are Netduino and Arduino.Being open source means that the standards are evolving with the communities that support these platforms. They are easily programmable electronics components that can be programmed.Because they are programmable, these electronics platforms can be used for a wide variety of purposes, unlike embedded electronics. The designs for these platforms are free, though you might need to invest in the components to put together your own board.
Hex is offering a 3D printed, copter that you can control using your smartphone. The circuit board of this device is based on Arduino. People can easily print and program their own devices from a growing body of open source, free designs.
These technologies continue to advance at a rapid pace, and they are becoming cheaper and more accessible to a wide audience.
Their convergence is giving rise to the Software-Defined Supply Chain.
What does all this mean?We believe that an industrial era dominated by the principle of mass production will be supplanted by an era of right-sized, bespoke production of commercial and consumer goods.
Over the last 100 years, we have gone from building products made of custom parts to standardized products made of standard, interchangeable parts. We have gone from designing and assembling products from the component level to modular designs and modular modes of assembly. We have gone from mechanically complex products to digitally simple products. The evolution of the automobile is a great case in point in what I’m talking about.
As a result, firms have pursued economy of scale to gain the most financial leverage out of the mass production of standardized products. Increasing modularization of product design has given rise to multi-tiered supply chains. And, firms have gone global in the search of the lowest cost suppliers and labor forces to maximize their margins and price competitiveness. It’s no surprise that the supply chains of today are big, complex and global.
Well, the Software-Defined Supply Chain is going to change all that.We believe that 3D manufacturing will move the dial from standard products made from standard parts back to personalized products made of custom parts, but without compromising economy of scale.We believe that advanced robotics will make the assembly of bespoke products economical, hence reversing the trend of modular design.We see that as products become smarter and connected in the emerging Internet of Things, the digitization of products will accelerate driven thanks to open source electronics hardware.
As a result of these new trends in manufacturing,Firms will begin to leverage the efficiencies and ability to right-fit and personalize products provided by economies of scope. Supply chains will become flatter and leaner as firms license designs, or create their own designs, and produce their own parts for their products.And firms will start too look for suppliers and labor closest to where the demand for their products are.In summary, supply chains will become more flexible, simple and local.
We at IBM asked the same question. Last year, Paul Brody, IBM’s Global Electronics Leader for GBS, and VeenaPureswaran of IBM’s IBV, launched a study to come up with some answers. They assembled a team of industry and academic leaders within and outside of IBM to answer the question of what the benefits of SDSC would be, and when we could expect to see benefits.Econolyst - Phil ReevesSourcemap – Leo BonnanniIBM Research – John CohnIBM Plant Location International – David ZaharachukNorthwestern University – Mike WatsonPenn State University – Alex Scott
They team conducted the study around four product use cases. These products were a washing machine, industrial display, mobile phone and a hearing aid.And, yes, we did break them down. These products were chosen for their differing characteristics from the perspectives of: size, complexity, production volume, level of personalization, and cost of manufacture.
Our friends from Econolyst and Source map helped us analyze the four products to come up with a baseline BOM as well as gather supply chain data such as cost of components and manufacturing.Our academic partners from the Penn State and Northwestern developed analytical models to measure the impact 3D printing, intelligent robotics and open source electronics on the manufacturing of these four products. IBM’s Plant Location International provided plant location related data to support the SDSC analysis. Team then created a linear programming model in ILOG, entered in the BOM, supply chain and plant location data, and the results were remarkable!created a first of a kind analytical model
The modeling indicates that cross the 4 product scenarios, the average cost of manufacturing is forecasted to become 23% cheaper 10 years years from now.What was even more impressive was that in 10 years the minimum economic scale in the production of these products could be achieved with 90 percent less volume!
Furthermore, the study indicates that the manufacturing of products such as the hearing aid would undergo drastic localization by 2017.
Now that we know that we can anticipate some big changes in the future, IBM is now exploring how the SDSC will express itself in the context of manufacturing and service operations by working with our clients and monitoring trends across industries.
We anticipate that the outcome of SDSC will be significant disintermediation, a common pattern seen in almost every digital revolution.Imagine thousands, millions of local, certified contract manufacturers who specialize in fabricating, assembling, and programming smart devices? How about local toy contract manufacturers?
Let’s examine the three SDSC transformation scenarios. The first scenario is the manufacturing scenario. How is the typical manufacturing operations laid out for a products company today?Supply and Demand Optimization is very difficult and requires complex planning.
Because you are manufacturing so close to your customer, you know how much to produce of what. You don’t need to invest in retooling or deal with long set up times to introduce new products.We envision a future where manufacturing is distributed around the world. And if we were to take the notion that many product brands will outsource their manufacturing, what would the software-defined factory look like.Let’s assume, in order to maximize the utilization of capital investment, the SD factory will need to handle as much demand as possible. That would mean that the factory would need to be able to handle as broad of a palette of products as possible.
Well, some of my friends at IBM’s Academy of Technology and I came up with a concept of what the SD factory would look like. SD factory is likely going to receive order for a
We conceptualized how SDSC technologies would be used in a Software-Define Repair Depot. Again, we used a simple process model to guide our thinking.
We believe that the impact of SDSC will be profound and will change the way we manage supply chains for the three scenarios we covered.
In 2012, the US Military started to deploy mobile fabrication labs that use 3D printers to print parts for equipment used in the theatre of war such as drones and demolition robots.
TechShop is creating a new culture of hardware design and development using 3d printers and other technologies and equipment that they rent to inventors and product designers.
“3D Printing is about to do to product manufacturing what the internet did to music distribution, we’re here to facilitate this revolution,” said Brian Garret, CTO and co-founder, 3D Hubs.
UPS has recently started a pilot of a 3D printing service that they are providing entrepreneurs.