Manufacturing’s Good/Bad News: the Rules Keep Changing

SmokestackThe short answer is this: manufacturing is no longer a world of belching smokestacks, countless rail cars, and factories filled of mindless repetitive jobs. Nor is it your father’s idea of how things get made in this country. Today, in fact, whatever rules you may have been taught, or may think you know about the process by which the U.S. makes, distributes and sells durable goods here and abroad may already be obsolete.

Consider these two recent (and, at least on the surface, inconsequential) news items I stumbled upon over the last few weeks, each from opposite sides of the industrial spectrum.

First, Etsy, a boutique online marketplace specializing in limited-quantity, high-quality handcrafted goods recently started putting together its online retailers with small-capacity manufacturers around the globe. The former, often mom-and-pop sellers who have found themselves suddenly overwhelmed with unexpected demand for items they’ve put on Etsy, are now able to contract with the latter, who then work hand in glove with those retailers to ensure high quality workmanship is brought to a higher-quantity production process.

EtsyMany purists have balked, saying the arrangement stands in direct contrast to the very principle upon which Etsy was built. But as the U.S. economy becomes more and more fueled by niche concepts, niche demand, and niche processes, this story may just hold implications that go far beyond a handful of artisan craftsmen and need-filling suppliers.

Can you imagine how that concept might play itself out in the industrial world in which many of us operate, where niche customers and factory owners could potentially meet online and develop relationships built on highly specific demands and necessary and available production capabilities? The prospects are either terrifying or exciting, depending, I suppose, on your relationship with change, your working knowledge of the online world, and your shop’s readiness for the future.

UPS 3DThen there’s this: UPS, the giant granddaddy of all freight delivery services, is now openly and actively seeking to answer an important and tremendously salient question. What impact will applied manufacturing (or 3D printing) have on to America’s supply chain – and, by extension, the very business model upon which UPS has built the bulk of its business?

At this point, no one knows. But it’s not hard to imagine a day when sprawling warehouses become all but obsolete, and where the lean manufacturing that has become so commonplace in our sector becomes leaner still. And in such a scenario, it’s not hard to imagine a supply chain in which the need to ship large quantities of raw materials and/or finished goods even relatively short distances gets reduced to the barest of minimums.

Etsy MfgTo that end, UPS recently purchased 100 such 3D printers and is now going to spend the weeks, months and even years ahead measuring, testing and analyzing the extent to which additive manufacturing changes our country’s supply chain and both the nature and volume of their commercial business.

What does it mean to manufacturing? Your guess is as good as mine. But I do know this. The game has changed – or at least it’s rapidly changing, along with the players in it. And anyone who earns a paycheck in our sector would do well to wake up to that fact and plan accordingly.

Lee WestwoodIs it the end of the world? Not by a long shot. In fact, my sense is many of the same manufacturers we have today will still be the players of tomorrow. But the rules of how and when we manufacture things are changing so dramatically and so swiftly it can make your head spin. What’s more, those rules are going to continue to evolve as they become more and more reliant on technologies that, frankly, we still don’t fully understand.

It’s going to be a challenge, no doubt. But it’s going to be fun as well. And it’s going to create some exciting new business opportunities – especially for entrepreneurs, venture capitalists and manufacturers prudent enough to see an opportunity and strike those slivers of time when the iron is hot.

Amazon HandmadeOh, and if you want to get a sense of just how fast the rules and the players are changing, consider: just weeks after Etsy announced it was marrying retailers and manufacturers, the biggest, most powerful retailer on the block – namely, Amazon –announced it was launching an all-new service specializing in homemade and hand-crafted items, clearly in response to Esty’s internet dating site for small retailers and manufacturers.

Roller CoasterMeanwhile, just days after UPS announced its experiment with 3D printers, FedEx said it too would be buying 3D printers. But unlike UPS, FedEx was going to be putting its printers directly into their trucks. That’s right; into its trucks.

Fasten your seatbelts, my friends. I may not be a genius, but I’m not sure it takes one to realize this ride is not only going to be wild, but it’s just now getting started.

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