THE GLOBAL PLANT FLOOR Planetary Ecosystems for Designing & Making Things

1. THE GLOBAL PLANT FLOORPlanetary Ecosystems for Designing & Making Things Presented By: LaPortia James Jonathan Cullum Kelly Powell

2. FAB LAB http://www.principalvoices.com/2007/technology.innovation/video/neil.gershenfeld/

3. Peer Production of Physical Things • Adoption of Wikinomics: openness, peering, sharing, and acting global • End of multinational production • Lower costs • Receding trade barriers allow for goods, knowledge, capital, and people to circulate freely in the market

4. Out with the OLD, in with the NEW! • Out with: • National silos • Insufficient knowledge transfer • In with: • Global resources and capabilities • Human capital across borders and organizational boundaries

5. “The emerging globally integrated enterprise fashions its strategy, its management, and its operations in pursuit of a new goal: the integration of production and value delivery worldwide.” • Sam Palmisano, IBM CEO and Chair

6. Managing the Ecosystem Expertise Operations Capabilities Innovation…is more about orchestrating and coordinating good ideas.

7. Part II The Modular Motorcycle Gang

8. China’s Motorcycle Industry • China’s motorcycle industry illustrates peer collaboration and production at its finest • Their collaboration has led to competitive advantages by means of efficiency and quality control • Motor cycle production has tripled since the mid 1990s in China

9. History • Yin Mingshan set up a motorcycle repair shop with 14 employees in Chongqing • That was over 14 years ago. Today, his company, Lifan, has 9,000 employees • Lifan produces over 700,000 motorcycles a year in 112 countries • http://www.lifanmc.co.nz/

10. Future of Lifan • Lifan plans to double its workforce to 20,000 in five years • Lifan wants to be a worldwide brand • Hopes to be instrumental in building up China’s automobile industry • Makes mid-size cars in Asia, Middle East, and Caribbean • The Lifan 520 has leather seats, air bags, a spacious trunk, and a DVD system for $9,700

11. Peer Production • Current thinking: Peer production can only be utilized to make information-based goods (composed of bits, inexpensive to make, and easily subdivided). • More people are beginning to believe that peer production can be applied to the production of actual products

12. Modular • If products are made to be modular then, like Wikipedia, producers should be able to add to and modify product components and designs • Modular means consisting of interchangeable parts that can be swapped without hindering the performance of the product

13. Collaboration • Chinese motorcycle producers collaborate on manufacturing and designs (hundreds of companies) • In less than ten years, Honda, Suzuki, and Yamaha have lost 40% of their market to Chinese firms • This seems to be proof that peer collaboration and production has been a successful approach for the Chinese Motorcycle industry

14. Other Reasons for Success in China • China’s transition from communist central planning to a market economy • Long history of making Japanese products • Some argue that there is no real innovation in China; they knocked off the Japanese's design • China has made reverse engineering more collaborative and organized

15. China’s Approach • Loosely defined specifications to amend and improve performance (this is usually achieved through collaboration with other suppliers) • Exchange of knowledge and skills among firms • Face-to-face interaction encourages trust, and problem solving • Increased specialization • This is referred to localized modularization

16. Risks to this Approach • Gap in supply and demand caused by a lack of coordination between suppliers and producers when gauging the market • Mismatched Parts- This can arise from a lack of integration

17. The Lego Block Airplane

18. Boeing’s Approach • Planes are composed of “Lego” parts made from many different manufacturers • Economic factors, including 9/11, caused Boeing to have to change the way it does business • New approach, mass collaboration, to control costs and get new planes to market more quickly

19. Boeing Continued • Participants design and build the aircraft in ways similar to those who built the Linux operating system • From this process came the 787 Dreamliner, IMPORTANT FOR THE COMPANY’S SUCCESS • Built among hundreds of suppliers in six different countries • Boeing’s new model treats suppliers as partners and peers, and their involvement in the process begins much earlier • Future passengers were also involved in the design process • The final assembly process cut from 13-17 days to as few as three days

20. Collaboration System • Boeing created a collaboration system called Global Collaborative Environment • Allows for collaboration in respect to design and product life-cycle management • Engineer drawings and other important data can be accessed, reviewed, and revised using the system by all partners all over the world. • There is also a sophisticated virtual design program, so suppliers can see how their parts will act together in real situations (at this stage benefits and problems can be seen)

21. Risks • Some worry that Boeing’s sharing of intellectual knowledge will cause them to lose its engineering edge • “Leaky knowledge” • Micromanage

22. BMW • German carmaker with a long-term reputation for quality car engineering. • Large international company that has sales to people in many countries around the world.

23. BMW • BMW undergoing a shift from an emphasis on mechanical engineering to perfecting the driving experience. • BMW focusing on more collaboration with their suppliers, and a shift to their suppliers doing more R&D, design building, and assembly of their cars.

24. How BMW harnesses the Global plant floor • BMW estimates that 90% of its new innovations will come in the fields of electronics and software. • Suppliers already develop and build 65% of new vehicles. • Many of BMW’s key innovations were from suppliers • Opportunities to explore: develop more customer co-creation using the internet

25. BMW Car Models • 528xi Sedan 335i Sedan M3 Sedan 6 Series Convertible X5 xDrive48 Z4 Roadster

26. BMW Website • http://www.bmw.com/ • http://www.bmwusa.com/Default.aspx • BMW Efficient Dynamics • More driving pleasure • Less emissions • Hybrids/Clean energy

27. BMW – Efficient Technologies • The engines • Auto Start Stop function • Brake Energy Regeneration • Electric Power Steering • Air vent control • Gear shift indicator • Tyres with reduced rolling resistance

28. Summary • 7 Lessons on how to harness the Global Plant floor: • 1- Focus on the critical value drivers • 2- Add value through orchestration • 3- Instill rapid, iterative design processes • 4- Harness modular architectures • 5- Create a transparent & egalitarian ecosystem • 6- Share the costs and risks • 7- Keep a keen futures watch

29. The End • Jiangsu 125cc Motorcycle BMW 750Li • Boeing 747