The software defined supply chain

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From the Siemens Global Innovation Summit in Phoenix, a look at how manufacturing transformation is changing the traditional rules of product design and development.

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  • As a supply chain transportation practitionaer, there is no doubt that the physical supply chain wil be impacted by 3D printig, but it will not eliminate my job just yet, but who would have thought printing wold become manaufacturing. Enjoyed the thought provoking PPT. .
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  • It was with thanks to Rachel Park's story in 3D Printing Industry on IBM that alerted me to this presentation deck in SlideShare. Much appreciated to approach the 3D printing phenomenon from the perspective of the supply chain mechanism - especially when China is not far behind with its prowess in 'Imitation as Innovation' as recently discussed at the SXSW ( audio file available at CloudSound ). Thanks for the very insightful and enlightening share and post.
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The software defined supply chain

  1. 1. Global Business ServicesThe Software Defined Supply Chain:How it will change product design and thecompetitive landscape in every industrySiemens PLM Innovation ConferencePhoenix, ArizonaMarch 2013 1 © 2013 IBM Corporation
  2. 2. The Triumph of The Model TThree Forces At WorkRewriting The Rules of Product Design & ManufacturingStrategies for Staying On Top 2 © 2013 IBM Corporation
  3. 3. The Model T set the rules for modern manufacturing The first mass produced automobile. The first to use interchangeable parts. The first to be built on a moving assembly line.Source: Wikimedia, Wikipedia, IBM Research 3 © 2013 IBM Corporation
  4. 4. Henry Ford unleashed mass production and mass consumption at an entirely new scale Ford Automotive Output, 1901-19293,500,000 $5 Daily Wage Introduced Assembly time down to 1.5 hours2,625,0001,750,000 Shift to moving production line. 875,000 Model T Introduction Assembly time per car: 14 hours 0 1901 1903 1905 1907 1909 1911 1913 1915 1917 1919 1921 1923 1925 1927 1929 Source: Wikipedia, Ford 4 © 2013 IBM Corporation
  5. 5. By the early 1920s, competitors had copied Ford’s mass production model and were gaining share3,000,000 Chrysler Total Ford Total • Parts commonality across GM Total models and even brands2,250,000 • Sub-contractors and modularization1,500,000 “A car for every purse and purpose” 750,000 - Alfred P Sloan 0 1901 1903 1905 1907 1909 1911 1913 1915 1917 1919 1921 1923 1925 1927 1929 Source: Wikipedia, Ford, GM, Chrysler 5 © 2013 IBM Corporation
  6. 6. From custom but interchangeable parts to standardized components in differentiated products Custom Components Standard Parts Assembly Modules Mechanical Digital Complexity Control Simplicity 6 © 2013 IBM Corporation
  7. 7. These three design principles govern how we achieve variety and quality without losing scaleThe result: decades of rising productivity and quality with falling costs: Income Compared to Automotive Pricing, 1935-2010 6,000 Income Auto CPI 4,500 3,000 1,500 0 1935 1939 1943 1947 1951 1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007Source: IBM Institute for Business Value 7 © 2013 IBM Corporation
  8. 8. The Triumph of The Model TThree Forces At WorkRewriting The Rules of Product Design & ManufacturingStrategies for Staying On Top 8 © 2013 IBM Corporation
  9. 9. Today, three technological changes are at work that will transform manufacturing Intelligent Open Source 3D Printing Robotics ElectronicsImages: MakerBot, IBM 9 © 2013 IBM Corporation
  10. 10. 3D Printing is rapidly achieving levels of performance required to be production-ready Already used in production for medical devices and aerospace Performance is improving year on year At lower volumes, unit costs are competitive with machining and plastic injection molding 10 © 2013 IBM Corporation
  11. 11. More than just a tool, 3D printing is an emerging ecosystem Materials Science MakerBot Thingiverse Printers TinkerCAD Open Design Source Applications Designs Kickstarter 11 © 2013 IBM Corporation
  12. 12. We are entering the third era of robotics with the rise of truly intelligent robotics Hard Flexible Intelligent Automation Robots Robots• Fixed location and • Integrated into • Easy set-up & move function production line • Work alongside• Delicate with low • Flexible & re-usable people MTBF with long lead times • Low costImages: IBM, ABB, RobotWelding.com 12 © 2013 IBM Corporation
  13. 13. Intelligent Robots are slower and cheaper but much, much smarter Baxter is a new kind of robot. Baxter is cheap - about $22,000. Baxter is slow and safe enough to work alongside people. The key to Baxter is software that allows rapid teaching and understands concepts like conveyor and object.Source: Rethink Robotics 13 © 2013 IBM Corporation
  14. 14. The final ingredient in our transformation mix is the rise of open-source general purposecomputing hardware Embedded General Purpose Electronics Computing• Cheap but only in • Expensive in volume, volume cheap as single unit• Fixed functions • Highly flexible• Highly reliable • Complex to manage 14 © 2013 IBM Corporation
  15. 15. We’ve reached the point where general purpose computing power can go anywhere The Apple Lightning Digital HDMI adapter for the iPhone. Full ARM SoC as powerful as many cell phones with 2GB of RAM. Boots when connected. Runs Mac OS Core (XNU) Receives MPEG stream and converts it to HDMI output. Embedded in the connector. Costs $49.Source: Cult of Mac 15 © 2013 IBM Corporation
  16. 16. All three of these tipping points have something in common: Software From Hardware-Driven To Software-Centered Production & Design Cycle: Production & Design Cycle: Build A Mold or Design & Print On Cast Demand Hard-Wire A Easily Reconfigured Production Line Assembly Develop An App Development on Embedded Chip Standard Systems 16 © 2013 IBM Corporation
  17. 17. The Triumph of The Model TThree Forces At WorkRewriting The Rules of Product Design & ManufacturingStrategies for Staying On Top 17 © 2013 IBM Corporation
  18. 18. Lets come back to three guiding principles that driven product design Custom Components Standard Parts Assembly ModulesMechanical Digital ControlComplexity Simplicity 18 © 2013 IBM Corporation
  19. 19. First, the long term migration from customization to standardization will be reversed. Custom Components Standard Additive ManufacturingWhat product options and choices would we design if there were no volumerequirements? 19 © 2013 IBM Corporation
  20. 20. Second, the shift from parts to modules will be reversed as marginal “labor” becomes free. Parts Assembly Modules Robotic AssemblyWhat kind of flexibility does your production line have if you start withsimple parts? How many tiers might you eliminate from the supply chain? 20 © 2013 IBM Corporation
  21. 21. Finally, everything product, even your light switch, will become radically smarter. Mechanical Digital Control Complexity Simplicity Radically SmarterIf you could the power of an iPhone in your toaster could you finally have aperfect piece of toast every morning? 21 © 2013 IBM Corporation
  22. 22. These trends dont just interact with each other, they interact the whole social and digital design ecosystem that already maturing very quicklyCrowd Sourcing Apps Design Social Mobile Everywhere Public Cloud Apps Based Design Cloud Local Everywhere 22 © 2013 IBM Corporation
  23. 23. The rate at which open-source design repositories are growing looks a lot like the growth of other social and collaborative online endeavors - which is exponential 30,000 The number of items on Thingiverse is 22,500 on an exponential upwards path. 15,000 Number of new items uploaded into Thingiverse each 7,500 month. 0 11/1/08 3/1/09 7/1/09 11/1/09 3/1/10 7/1/10 11/1/10 3/1/11 7/1/11 11/1/11 3/1/12 7/1/12 11/1/12 70.0 The complexity of new items is on a steady 52.5 upward path. As measured by the 35.0 most complex new item uploaded each month - in terms of number of parts. 17.5 0 11/1/08 3/1/09 7/1/09 11/1/09 3/1/10 7/1/10 11/1/10 3/1/11 7/1/11 11/1/11 3/1/12 7/1/12 11/1/12Source: Economist in cooperation with IBM 23 © 2013 IBM Corporation
  24. 24. The future is here now. Consumers are leading the way. December 2012: 3D Printed AR-15 Lower Receiver developed on Thingiverse, the open-source 3D printing platform In testing, the device fails After 15 after just 6 shots. Thingiverse removes all weapons projects. Stratasys recalls the printer used for the project.Source: TechCrunch, Wired 24 © 2013 IBM Corporation
  25. 25. Thanks to social networking and open-source hardware design, the latest versions can easily fire over 1,000 rounds By March 2013: DEFCAD and WikiWeapons enable broad collaboration on open-source, 3D printed weapons. Version 5 of the 3D printed AR15 Receive succeeds in shooting over 600 rounds without failure. Creator Cody Wilson tells the press, “I believe in evading and disintermediating the state”Source: TechCrunch, Wired 25 © 2013 IBM Corporation
  26. 26. Thanks to social crowd-sourcing, you needn’t even own a 3D printer yourself. MakeXYZ.com enables people to share and get paid for their 3D printer usage. Search locally based on postal code. Transmit design, print and receive the same day. Corporate buyers actively considering if they really need to buy 3D printers to manufacturing using them.Source: TechCrunch 26 © 2013 IBM Corporation
  27. 27. The scope and scale of crowd-sourced technology vision is extraordinarySource: DIYRockets 27 © 2013 IBM Corporation
  28. 28. Integrating these new technologies, nimble start-ups are able to re-write the traditional end-to-end processes that large enterprises take for granted Idea to Market The foundation of Market To Order business process design is end-to-end Order To Cash thinking.New entrants are 1 Idealeveraging technologies 5 Marketing Kickstarter 2to drive big disruptions inbusiness models 4 Product Cash 3 28 © 2013 IBM Corporation
  29. 29. From Rip, Mix, Burn to Design, Download, Print.Source: Apple 29 © 2013 IBM Corporation
  30. 30. The Triumph of The Model TThree Forces At WorkRewriting The Rules of Product Design & ManufacturingStrategies for Staying On Top 30 © 2013 IBM Corporation
  31. 31. What are the likely consequences of all these changes on enterprises? Lower Cost Design Reduced Scale for Through Open Source Competitive Pricing Much Faster Time To Fewer Suppliers & Market Tiers Required Far Less Capital Required Lots More Competition 31 © 2013 IBM Corporation
  32. 32. What lessons might we learn from the software business that could apply?Supply Services InnovatorsChain 12 345 Product Clients Design 32 © 2013 IBM Corporation
  33. 33. Rethink your suppy chain Are your PPE investments consistent with a shift to flexible manufacturing? The software defined supply chain will be: Simpler & Shorter More Flexible Near Design Centers or Key Markets 33 © 2013 IBM Corporation
  34. 34. Rethink your design process Product design is now product marketing. Treat digital design assets like re-usable software code, and use them in a much greater variety of product. Embrace and leverage an open-source community around your digital design assets. 34 © 2013 IBM Corporation
  35. 35. Deliver products as a service Products are typically sold as transactions. They are the easiest thing to replicate. Services deliver on-going value aligned to your client’s needs. Services provide a continuous stream of revenue and a continuous stream of customer insight. 35 © 2013 IBM Corporation
  36. 36. Help, don’t hinder, your clients’ technology transition Clients will figure out how use these same technologies. Help them. Don’t go to war with your clients by loading your products with DRM or preventing their use of new technology. Shift away from spares as a source of margin and towards higher value support services. 36 © 2013 IBM Corporation
  37. 37. Solicit innovation or face competition 80% of consumers told IBM in a survey that they are willing to help enterprises develop their products. Accept their help. Or see them build your competition on Kickstarter. 37 © 2013 IBM Corporation
  38. 38. In this transition, we want to help How should my supply chain look in light of these new models? What IP should I protect and what should I make open-source? When should I start making the technology and supplier transitions? - Strategy - Execution Support - Technology Implementation - Outsourcing 38 © 2013 IBM Corporation
  39. 39. How soon is now? How do you find out? 1. Tear down products built by traditional supply chain 2. Estimate new BoM and BoA using a Software- Defined Supply Chain Concepts 3. Enlist world’s top manufacturing experts to build technology roadmap for the Software Defined Supply Chain 4. Feed new BoM and BoA into an iLOG simulation model 39 © 2013 IBM Corporation
  40. 40. Let’s Stay In TouchEmail pbrody@us.ibm.comLinked In Profile : http://www.linkedin.com/in/pbrodyReading List Delicious : http://www.delicious.com/prbrodyIBM on Twitter @IBM_ElectronicsTwitter, App.Net, Sina @pbrodyWeibo 40 © 2013 IBM Corporation

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