In our last post, Expectations vs. Reality: The Future of Consumer 3D Printing, we promised to highlight interesting verticals, spaces, and uses cases that highlight digital manufacturing's potential, and that we believe will become important over the next 3-5 years.
BUT—before we do that, we think it's important to establish a common lexicon so we're on the same page when we discuss "Digital Manufacturing" (which we believe is a form of product delivery that will bring about the next industrial revolution).
Today, when most products we use are manufactured, they’re created with standard formats (combinations of components that are assembled) and built in batches of hundreds or thousands. You've probably seen pictures like the one below….
Many men and women wearing protective clothing, building the same product over and over and over. This is not what the future of manufacturing will look like….
Two of the biggest reasons products are made in batches are:
- High fixed costs. Generally, you can classify a product's costs into "fixed" and "variable" costs. One-time, upfront costs like setup and tooling that do not change based on volume are fixed costs. Variable costs are those that increase proportionally to volume and typically consist of materials and labor. Many objects created today are created through methods like injection molding and thermoforming have very high tooling/setup/fixed costs, and low variable costs. Because customizing products means more setup and high fixed costs, the way in which products are customized is typically restricted to batches of a few different permutations (e.g. standardized sizes and colors of apparel, phone cases, headphones, etc.).
- For many products, people are okay with owning 1 of 10,000 copies. They don’t necessarily need or want fully personalized laptops, or televisions—modular customization (or simply selecting one of several options) can sometimes be good enough. Many products are not made substantially more valuable with customization—for some products (like TVs), it doesn't seem like the value is really there, so they’ll continue to be made in the old methods.
Because of the high up-front cost of tooling and setup, bringing personalized products to the masses is not economical with the way products are manufactured today. The barriers hindering mass customization of consumer goods are somewhat simple: offer good value (better products for less money/time). The challenges lie in (1) finding the goods for which customers value individual personalization, and (2) to lower the costs required to offer these goods.
Personalized Kicks from Nike.com
Speaking of lowering costs: enter digital manufacturing. At Mosaic, we generally define digital manufacturing as: manufacturing where the tooling/input required is a digital file and can be changed or modified for individual consumers.
Additionally—while not a strict or well-defined definition—goods that we would generally classify as "digitally manufactured" are those that are created with higher levels of automation.
Automating digital ordering and manufacturing processes, and using FDM/FFF tech as a means to decrease tooling and other fixed costs makes it more economically viable to create lines of personalized goods, and to manufacture them closer to where they will be consumed (decreasing shipping costs, import fees, fulfillment times, etc.).
That means: More valuable, more customized products. Lower fixed costs (and lower risk). Fewer shipping issues, and quicker shipping due to decentralization of manufacturing centres (due to lower barriers to entry/capital requirements). We believe the convergence of these factors will lead to substantial growth in the digital manufacturing of highly personalized goods.
Next week, we promise to begin diving into different areas where digital manufacturing companies are starting to emerge, the trends we’re seeing in the products they’re launching, and some of the companies we think you should keep your eyes on.
‘Til next time,Mosaic.