Innovation and technology development in manufacturing and industrial businesses can occur on many dimensions – because of the long development times one of the most important criteria to pursue is the ability to iterate quickly and create feedback loops with customers. Jenny Lawton, COO of Techstars and previously with Makerbot, highlighted this development cycle risk on her November 28, 2016 appearance on Jenny Fielding’s IoT Podcast.
Businesses, products and technologies that help customers go faster will win compared to slower moving peers.
Creating speed and customer interest requires a new business to score high in some combination of the following areas:
It’s hard to ignore a new technology that has specific customer pull or that addresses a large known need within society. Product market fit is long sought after, and sometimes with industrial technologies it can be clear that there are only so many possible solutions, and that one method / process / technology is going to win out if the cards are played right. Moore’s Crossing the Chasm is all about creating as many winning scenarios as possible by getting to large market adoption.
Innovation in advanced manufacturing requires an end customer that exists in a vertical. Knowing how to deploy a new production technology to the benefit of a specific vertical is extremely valuable. This knowledge must be confirmed by an existing supply chain partner, or by team members recently just out of industry. This is not a problem to validate in .xls or with some $5,000 market report – it must be spoken directly from the mouth of customers willing to spend money.
Many problems of this nature in heavy industry are addressed within large organizations and are not trusted to external providers.
2/ New Materials
New materials change how things get done. DuPont rebuilt itself on Nylon, Gore was created on PTFE – many modern industrial giants exist on the back of finding new niches for their core material. This trend exists in additive manufacturing – Carbon has charged into footwear with the use of new polymers. Desktop Metal, Form Alloy, Trio Labs and many others show the interest in use of metals, ceramics and other inorganic materials. In industry many decisions are made starting with a known good material, and then accepting the form factor in which it is available. Taking a material and making it workable with a new technology so it can be used in new areas can open new, large markets. As a corollary – expecting a customer base to change materials is often a trap. Material qualification can be costly, many enabling characteristics aren’t fully documented, and the time to complete these activities is very long.
Enabling materials to be produced in new ways, while conserving their bulk properties in the new form is a tried and true method of creating new markets and growth.
3/ Performance (Resolution, Speed, Uniformity, etc.)
With electrospinning Elmarco changed fiber production by making sub micron fibers easily produce-able. The speed of the fundamental process was notoriously slow, but we changed customers perception of that speed by dramatically improving uptime – thereby leading to an overall increase in speed. Other processes had long produced tiny fibers, but they did so by occasionally producing large fibers. That single large fiber ruined the uniformity of a web (or membrane) – thus creating a premium value for uniformity. As we continued to scale up the process, this uniformity and precision allowed customers to use even less of the process (bad for us), and use more of cheaper processes (good for them) to produce high value materials.
Additive manufacturing sees parallels in voxel resolution, speed of part assembly and uniformity of build quality.
4a/ Total Systems – Front end
Very few things exist in isolation. At Unitive, our chip scale packaging required customer education, new thought processes and a great deal of supply chain integration. With Elmarco, the lab tools were (and continue to be) a crucial tool in educating the work force in how to use the process. Front end processing and preparation of a process matters a lot. In additive manufacturing this can take many forms – analysis of a piece to be replicated, scanning of materials, computer modeling and simulation and such simple things as design rules and educational courses.
4b/ Total Systems – Back end
Beth Macy’s Factory Man dedicates multiple segments to the value of the finishing rooms in defending the US furniture industry from Asian competition. Additive manufacturing can currently require several finishing steps depending on the part’s end use and base material.
4c/ Total Systems – Rising tide
In some markets, the best way to monetize a new technology is to internalize it for self use (see SaaS for Tow Trucks). Sometimes it is better to sell the tools to others. Many universities and government consortia aided the boom in nanofiber interest by selling courses and analytical services to new market entrants. Low cost sensors enabled better production tools.
A method, tool, system or technology that accelerated the adoption of additive manufacturing / 3d printing accelerate would prove a major benefit to the industry. It could be packaged and sold, or it could be used to create an internal advantage.
This type of innovation can take many forms – it could be a web-based image assessment of a customer’s inventory seeing how many items could benefit from new production methods.
Cost can be a valid reason to innovate and help customers adopt a new technology, but most often it is a trap. Costs best use is often to rule out an approach, rather than to rule it in. Many things can look cheaper in a .xls spreadsheet or google doc – but when exploring the political decision making within a large customer, the difficult in creating the change makes it hard to capture all of the costs.
Costs should be evaluated at the individual operation / production step – but also at the system level. It is important to understand system level decision criteria and finances in manufacturing – as most target customers have sophisticated accounting methods and substantial corporate overhead (which can erase potential savings).
Making something easy to do, and thereby making it faster, is usually a better area of technology disruption than making it cheaper.
Cost, like materials above, create a corollary – if your costs are way out of line with current methods, then you face an uphill battle. If your per unit costs will be cheaper, but it requires a multi-million dollar completely speculative investment to create a proof of concept – then that will be more challenging than the status quo (do nothing), or a similar method that only costs a few thousand dollars to qualify.
There’s always some other dimension in which new teams, technologies and people can provide value. Keeping an empty space on the paper to reflect on those surprises is important.
Warning sign: Supply chain ‘turns’
One ‘Other’ that often pops up in manufacturing technologies is where supply chains ‘take a turn’. This may be when a product leaves a multi-billion dollar plant to go to a low cost finishing operation, or when a product’s supply chain goes from few, to many competitors. These changes in market dynamics are a signal to pay attention and vet the lay of the land with customers very thoroughly.