Manufacturing at the click of a mouse: the third industrial revolution commences

Summary:Technologies such as 3D printing are altering the face of manufacturing, making it leaner, cheaper and far more flexible -- and closer to the consumer -- than ever before to produce products.

Three-dimensional printing has a huge range of potential applications, from customized mass production of medicine, to food, to houses, to machinery. Technologies such as 3D printing are altering the face of manufacturing, making it leaner, cheaper and far more flexible than ever before to produce products. And, in the process, will reverse the offshoring trend.

A new report in The Economist calls the increasing digitization seen in manufacturing with technologies such as 3D printing the dawn of the "Third Industrial Revolution." One of the most pronounced changes now being seen is a shift away from moving production to regions with low labor costs back to regions where markets reside.  "Labor costs are growing less and less important," The Economist notes: "a $499 first-generation iPad included only about $33 of manufacturing labor, of which the final assembly in China accounted for just $8."

In fact, the shift to localized production has already been underway -- in a new survey of 106 executives at large US-based manufacturing companies, Boston Consulting Group (BCG) finds more than a third, 37 percent, plan to bring back production to the United States from China or are considering it.

BCG cites China's rising labor costs -- the inevitable and ironic result that a rising standard of living enables -- as making manufacturing less cost-effective within that country. In the past, the next logical move would have been to relocate plants or contract for production in emerging regions with low labor rates. Interestingly, what's happening this time around is the United States is seen as the next low-cost production region.

Not mentioned in the BCG release, but an important factor, is the rise of automation and digitization of production processes within US companies, thanks to information technology and lean methodologies. Emerging technologies, particularly 3D printing, also makes production at the source viable and cost-effective, and it's likely that many companies and innovators will be embracing "desktop manufacturing" as a way to quickly and smartly assemble and mass produce their goods.

As The Economist describes it, 3D printing will change "the geography of supply chains," since 3D printing can take place anytime, anywhere. Spare parts will no longer have to be ordered from some distant locale, they can be made on the spot. "The days when projects ground to a halt for want of a piece of kit, or when customers complained that they could no longer find spare parts for things they had bought, will one day seem quaint."

Quaint indeed.

(Photo by the author.)

This post was originally published on Smartplanet.com

Topics: Innovation

About

Joe McKendrick is an author and independent analyst who tracks the impact of information technology on management and markets. Joe is co-author, along with 16 leading industry leaders and thinkers, of the SOA Manifesto, which outlines the values and guiding principles of service orientation. He speaks frequently on cloud, SOA, data, and... Full Bio

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