Second Episode: From mass production to smart production.

Additive manufacturing is not yet good enough to make a car or an iPhone, but it is already being used to make specialist parts for cars and customized covers for iPhones. Additive manufacturing is only one of a number of innovative production equipment leading to the factory of the future. Conventional production equipment is becoming smarter and more flexible too.

For example, Volkswagen is implementing a new production strategy called MBQ. By standardizing the parameters of certain components they hope to be able to produce all its models on the same production line (Again economies of scale).

Factories are becoming vastly more efficient. Nissan’s British factory in Sunderland, opened in 1986 is now one of the most productive in Europe. In 1999 it built 271,157 cars with 4,594 people (59 cars per capita). Last year it made 480,485 cars with just 5,462 people (88 cars per capita).

As the number of people directly employed in making things declines, the cost of labor as a proportion of the total cost of production will diminish too. This will encourage makers to move some of the work back to rich countries, not least because new manufacturing techniques make it cheaper and faster to respond to changing local tastes.

The materials are changing as well. Carbon-fibre composites, for instance, are replacing steel and aluminum. Sometimes it will not be machines doing the making, but micro-organisms that have been genetically engineered for the task. Software are going smarter. And the effects will not be confined to large manufacturers, much of what is coming will empower small and medium-sized firms and individual entrepreneurs. Launching novel products will become easier and cheaper. Communities offering 3D printing and other shared production services are already forming online.

The consequences of all these changes amount to a third industrial revolution, as The Economist wrote in April 2012. The first began in Britain in the late 18^th century with mechanization of textile productions. The second  began in America in the early 20^th century with the assembly line and the era of mass production.

As manufacturing goes digital, a third great change is now gathering pace. It will allow things to be made economically in much smaller numbers, more flexibly and with a much lower input of labor. The first two industrial revolutions made people richer and more urban. The third?

Source: The Economist, Special Report on Manufacturing and Innovation, A third industrial revolution, April 21^st 2012.

Pilot: Additive Manufacturing & economies of scale

Today I was going through The Economist's special report on manufacturing and innovation (published in April 21st 2012) and I decided to start a set of posts to explore some interesting insights about what The Economist called a third industrial revolution. (Please note the "a" instead of "the", we will see if there will be a change about it in the next few years) 

Additive Manufacturing is the process of producing parts by successive melting of layers of material rather than removing material, as is the case with conventional machining. Hence, choosing an AM technology for production provides great benefits for the entire production value chain. The geometrical freedom allows you to engineer/design your part as you envision it, without manufacturing constraints. This can be translated to extreme light-weight designs, reduced part counts or improved bone ingrowth for a medical implant. It is also a fast production route from CAD to physical part with a very high material utilization and without the need to keep expensive castings or forgings on stock.

What could it mean?

Try today to go to a factory and ask to make you a single hammer to your own design. The producer would have to design and produce a mould, cast the head, machine it to a suitable finish, turn a wooden handle and then assemble the parts. You will be presented with a bill for thousands of dollars!

Thus, it would be efficient only if you produce a certain amount of items, as the well-known concept of economy of scale says.

What is a technology breakthrough? It is any significant or sudden advance, development, achievement, or increase, as in scientific knowledge or diplomacy, that removes a barrier to progress (i.e. the jet engine was a major breakthrough in air transport or internet was a major breakthrough for communication). When this happens usually a market structure changes as production changes.

Thanks to 3D printers and other additive manufacturing tools, economies of scale matter much less. In fact, its software can be endlessly tweaked and it can make just about anything. The cost of setting up the machine is the same whether it makes one think or as many things as can fit inside the machine. As a normal printer, it will keep going at about the same cost for each item (Obviously you would take into account the fixed cost and amortization of the machinery – so economies of scale still matters but much less).

From HBR: See the Big Picture Before Making a Decision

Here is a good decision-making advice from today HBR's Management Tip.

Successful strategic thinkers always have perspective. They consider the potential impact of their actions on those beyond their team or unit. Next time you need to make a big decision, here are three ways to make sure your thinking isn't too narrow:

• Explore the outcomes. With every idea, ask yourself, "If we implement this idea, how will other units and stakeholders be affected? What might be the long-term ramifications?"
• Expand your range of alternatives. Gather ideas and concerns from everyone who has an interest in the decision or who will be affected by the outcome.
• Consider the customer. Look at the decision through your customers' eyes. What will they think and which alternative will they prefer? If you're not sure, think about asking them.

Are Italians knowing Car Sharing? (finally after almost 10 years of activity)

A recent TV report from the Italian television (SuperQuark of July 26th 2012 - Rai1) showed me that finally Italy is knowing what car sharing is. 

I have known Car Sharing since 2007, when I wrote my bachelor thesis on it. Since that time Car Sharing has been always in my research interest, and I am now writing a paper about it.

Here is the abstract!

Car sharing, an innovative mobility service complementary to the local public transport, helps, through the sharing of a fleet of cars among users, to reduce individual and social costs of private transport, at the same time avoiding the rigidity of traditional public transport as well.

My paper on car sharing intends to explain the nature and development of car sharing through three key directions: i) the critical analysis of literature, through which it was possible to identify how car sharing is still not very extensive; ii) the overview of the Italian context; and iii) the analysis of car sharing service in detail, through a case study of the experience in the city of Genoa.

The purpose of this paper is to contribute to the few existing studies on car sharing in an effort to increase academic and managerial attention on this sustainable mobility service. 

Internet and old traditions

Ten years ago or so, a young man would probably have learnt how to iron his shirt by his mom or his grandmother.
Today a young man figuring out how to iron his shirt for the next day of work can easily learn how to do it using YouTube.
The same can be said for cooking, repairing piping or fixing an electric outlet.

Lots of people say internet and globalization are destroying, or making us loosing, our customs traditions. The question which came out from my mind this morning, while learning how to iron my shirt on YouTube is: "are really internet and globalization which are destroying our traditions? Or maybe it is all about people's motivation?"

For sure YouTube is not replacing our mom teaching us, or the time spent with your dad fixing a shelve, but if we have the motivation to learn new things internet and the globalization can really help. They can help in transferring traditions through different generations, even traditions that come from other cultures.

My opinion is that is all about us, about our motivations. If we want to learn how to do something the today world makes it easier than before... (i.e. your mom could have not be available to teach you how to iron when you needed it...).

Have a nice "ironing" weekend!

Learning by biographies should be part of management studies

Earlier today I felt on an old copy of Time (October 17, 2011) dedicated to Steve Jobs.

The article on page 38 by Grossman and McCracken captured my attention and inspired me this post. I don't know why, but I missed this article on that issue and I am thankful I found it now.

I was thinking yesterday that going back centuries ago, people studied the biography of the great people to study how to live, to learn by their experience. Nowadays we focus more on the concepts, on the examples, on the case studies. But, back in high school I remember that my teacher of literature and latin said to us to study the life of the authors before reading the poems.

Well, I thought, why do we study concepts and theories of management without reading biographies? We all say that every organization is made by the people, the organizations' culture is made by the people, the organizations' strategies are made by the people.

Here is why I approached to this article and I advise anyone to find a copy of the article and read it. It is a very well written business story on Steve Jobs' career and ventures.

In Italian business schools we study theories over theories and, in the last decade, we discovered the importance of case studies. Case studies in management are a great tools of learning, they give you the possibility to gain a sort of "soft experience" by acting as if you were the real actor in a certain context.

What we are missing, in my modest opinion, is to study the life of the men who pursued certain strategies, achieving outstanding goals. For example Steve Jobs. Steve Jobs went against any management rule, he didn't listen to a lot of management theories, he diversified a fully integrated company. Biographies such his, or Bill Gates and Warren Buffet should be studied in management classes along with theories and case studies.

I believe this is "History of Management" or it is what "History of Management" should be. We study Henry Ford, or Fayol and Barnard. All of them were directors who changed the world with their vision, we should update, specially in Italy, our way of study management by adding biographies to our background.

By the way, I want to end this post with following quote by the famous Stanford's speech in 2005.

"Don't be trapped by dogma, which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your hearth and intuition. They  somehow already know what you truly want to become. Everything else is secondary."

Cognitive Biometrics. There still is something not on wikipedia!

Today I received a newsletter from a publisher company about newly published academic journals.
One of them captured my attention and curiosity, it was about the so-called "Cognitive Biometrics". I run on google searching for a wikipedia page on that. With great surprise I did not find anything about it.
In this world, probably to find or not to find something on wikipedia is a good index about how new is a topic. Cognitive biometrics is definitely new.
As Dr. Revett, editor of the International Journal of Cognitive Biometrics, wrote "Cognitive biometrics is a novel approach to user authentication and/or identification that utilises the response(s) of nervous tissue."
Cognitive biometrics merges human perception to computer database in a brain-machine interface. It is based on specific responses of the brain to stimuli which could be used to trigger a computer database search. 
The stimulus, according to Dr. Revett, "could be the presentation of a familiar photograph, a song, or a Rorschach ink blot, either individually or in various combinations. It is designed to induce a specific and reproducible change(s) in the (or a set of) state(s) of the individual."
The methods used to record the changes currently include the electroencephalogram (EEG), the electrocardiogram (ECG), the electrodermal response (EDR), blood pulse volume (BVP), near-infrared spectroscopy (NIR), electromyogram (EMG), eye trackers (pupilometry), hemoencephalography (HEG), and related technologies.
According to Dr. Revett "the motivation for this approach is to provide a more intuitive and arguably a more robust and user-friendly authentication protocol that is suitable for both static and continuous authentication requirements."
One should note that cognitive biometrics is completely distinct from behavioral biometrics. Behavioral biometrics, such as keystroke dynamics, signature and gait rely on the precise reproduction of motoric activities, which are only peripherally related to cognitive state. 
Cognitive biometrics uses individual's response (typically non motoric) to a stimulus.
It is the response of the person to the applied stimulus that forms the basic for the authentication. How a person responds to a stimulus is very complex. Basically there is a genetic basis, modulated by our experiential history which can significantly shape our behavior.