Thursday, February 28, 2013

Will the next Henry Ford cash in on the love for labor?

The Wired article by Chris Anderson describes the potential of micro factories. Local Motors’ and Factor Five Racing’s business model which bring manufacturing to the end of the supply chain. The Rally Fighter is one of the success stories. Crowdsourcing design and involving buyers in the manufacturing is a new concept for the automobile industry.

In Michael Norton’s article about the ‘Ikea Effect’, he outlines the consumer psychology where consumers valuation of their own labor is high. When instant cake mixes were introduced in the early 50s, it met with a lot of resistance from the market. However, when these mixes required an egg to be mixed, adoption of these mixes increased dramatically. IKEA has been doing this for the last couple of decades.

With the rather inexpensive availability of 3D Printers and other micro-factory technologies, businesses like Techshop and Local Motors are trying to flip the traditional supply chain upside down. Personal 3D printing technology is expected to have profound effects on how and by who innovations are created. They are already massively decreasing the capital costs of setting up new manufacturing enterprises. The question however is if this model can be scaled to compete with the mainstream manufacturers who have scale to support their operations.

  1. In The Next Industrial Revolution, Atoms Are The New Bits (Wired Magazine, January 25, 2010)
  3. The Kitchen Table Industrialists (New York Times, May 13, 2011)

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