Silicon Valley Thought Leaders Series The Next Wave of High Tech Manufacturing 2 October 2014 Chris.Richard@atkearney.com Clarence.Chen@atkearney.com #HTMfg, @ATKearney
Event Setting On October 2 nd, 2014, at The Quadrus Conference Center in Menlo Park, A.T. Kearney conducted the second event in our Silicon Valley Through Leadership series The event was attended by almost 100 executives and thought leaders from Silicon Valley companies and academic institutions The program consisted of a presentation, panel discussion, and networking reception Presentation (following pages) by Chris Richard, A.T. Kearney Partner Panel discussion facilitated by Clarence Chen, A.T. Kearney Partner Mike Dennison, President, Consumer Technologies Group Flextronics Jim Miller, Vice President, Worldwide Operations, Google Greg Reichow, Vice President, Production, Tesla Motors
Opening are you smarter than a ten year old?
Out of Cage Robots disruption levels nearshoring M2M big data energy talent Collaboration lead-time What is the future of manufacturing? What are people saying? crowdsourcing industrial Internet Value chain China sensors reshoring 3 rd industrial revolution IoT automation process 3D Printing ecosystems algorithms unions communication demand transform innovation standards networked consumer real-time virtual Who is driving this? $1B GE Cisco Industry Flextronics Applied Materials $1B SAP Siemens Penn State Purdue Columbia $0.3B MIT $0.5B Academia NC State Georgia Tech Stanford Northwestern $2B White House Mexico s Secretariat of Economy NSF NASA $0.5B NIST DOD Phillips Tesla BMW Intel Google Government DOE DOT $0.3B Germanys Ministry of Edu.
Do you know the definition of a high tech product? Traditional Products Traditional products incorporating electronics and software High Tech Products
High tech manufacturing evolved as has the demand for products Open Economy Population 3.6B 4.5B 7.0B Mobile Subscriptions 12M 600M 7.0B Manufacturing Emphasis Quality Cost Performance Supply Chain Profile Vertically integrated Offshored Outsourced Lengthy Specialized Productivity Levers TQM, JIT Lean, Six Sigma SC Collaboration 1990 2000 Today
Seven factors are driving change in manufacturing Globalization People Supply Chain Consumer Requirements Technology Environment Productivity
but four are transforming high tech manufacturing Shifting Consumer Expectations Additive Manufacturing Globalization People Supply Chain Consumer Requirements Technology Automation Environment Productivity Internet of Things
Shifting Consumer Expectations Consumers expectations will break today s paradigms Dominant product mode Hardware Software Experience Connected devices 1.8B 30B 500B+ Personalization Fledgling Mainstream Prevalent Delivery urgency 7 days Same day Hours Appetite for new products 1 to 3 yrs 2x / year Monthly 2010 2020 2030 Demanding Fickle Intolerant
Additive Manufacturing Additive manufacturing will reinvent processing Finish Rough Final Flawless Materials Plastics+ Many Any Technologies 5 15 30 Printer cost index 100 53 28 Installed base 23K 2.5M 100M 2010 2020 2030 Rudimentary Useful Endless
Automation Automation will take us to new heights in efficiency Tasks Simple, repetitive Complex, flexible Intelligent, adaptive Connectivity Local Integrated Self guided Human interaction Caged robots Collaborative robots Lights out factories Payback <1yr in G20 <1yr in ROW Taken for granted 2010 2020 2030 Selective Integrative Autonomous
Internet of Things IoT will enable products to make themselves Capability Connected Coordinated Intelligent Function Sensing Automating Optimizing Sensor Position On production tools On devices Within devices Interoperability Spotty Partially connected Seamless Cost index 100 65 35 2010 2020 2030 Embryonic Useful Pervasive
Manufacturers must make two fundamental paradigm shifts to remain viable in the next 20 years Design differently Make differently With no constraints Anything can be made With all data Real-time and granular With everybody Customers and suppliers With no trade-offs Personalized @ volume With new workforce Mission control operators With infinite footprint Inside and outside four walls
Our predictions for the high tech factory in 2030 Location: Specialization: Direct labor: Operations model: Flexibility: Process control: Suppliers: Silicon Valley, adjacent to design center Mass customization None: intelligent, fully automated, lights-out factory Mission control center Extreme: modular, multi-material, configurable Tuned to individual unit, IoT sensor-driven Co-located production, co-located design
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