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Three Changes in Manufacturing No One Is Talking About

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Three Changes in Manufacturing No One Is Talking About

Highlights of Fabtech 2017




Manufacturing is going well in North America. Over the 4 days of Fabtech, our team had a chance to interact with over 500 actors from the manufacturing industry. We met everyone from manufacturing engineers and floor supervisors to welders and machinists. Through the small talk to the deep and passionate discussion about the industry’s future, everyone agrees on one thing: their shop is busy—a good busy!

Surrounded by this positive vibe, I had to ask myself: What could temper it? What are the upcoming changes that will keep the momentum for some, but stop it for others? What are the underlying changes that no one seems to be talking about?


The Specialization of Robots And The New Reality Of Integrators


For those that doubted that robots will be everywhere on manufacturing floors, Fabtech was a good reality check. Not only are robots everywhere, but they’ve become increasingly specialized. There are now robot systems dedicated to CNC loading/unloading, tube welding, and metal polishing.

Those tailored solutions used to be the sandbox of “integrators,” but it seems that robot OEMs have invited themselves to the party. The solutions of robot OEMs are clearly more “specialized” and “plug and play” than they were as little as 5 years ago. Speaking about some OEMs, there is clearly an ambition to be more “direct to consumer,” and offering tailored solutions “off-the-shelf” is part one of that strategy.

The theory of disruptive innovation is very clear. Various industries go through cycles of vertical integration and we must ask ourselves if the industrial robot industry is next. The technological barriers to design and manufacture robot arms are diminishing, leading to increased competition and margin pressure for OEMs. As a result, robot OEMs aim at protecting their margin by integrating upstream, providing more tailored solutions and services, and increasingly competing with their current integrators.



The Commoditization of 3D Printers


Vention’s booth was located in the middle of the 3D additive pavilion at Fabtech. We had the chance to see some of the most sophisticated 3D printers of our time (e.g. 3D System, FormLabs, Markforged, Trumpf) but also some of the 3D printer technology that is already commoditized. In fact, 50% of the 3D printer OEMs surrounding our booth used standard FDM technology, with the primary differentiator of those printers being bed size.

The barrier to entry to build entry-level 3D printers has greatly diminished with control software, components, and build material becoming widely available. The commoditization is well underway, leaving OEMs of entry-level 3D printers with the following dilemma: grow in scale to compete on cost or accept their business as niche.



The “Amazon Prime era” is Hitting Manufacturing


Consumers have come to expect next day shipping as a table stake feature, and manufacturing engineers are no different. In fact, expectations of “acceptable lead-time” have changed must faster than industrial and manufacturing vendors have adapted. The clash between traditional manufacturing businesses offering 3 to 6 weeks lead-time and this new generation of companies built from the ground-up around “next-day delivery” was quite visible at Fabtech.

In fact, the advantage of “speed” has become significant enough that a new class of businesses has emerged to deliver that mission. The best examples are e-Machine shop and 3D print platforms like Protolabs, Fictiv, FastRadius, and Shapeways. These businesses are operating highly-scalable and data-centric platforms, doing advanced marketing, and are charging a premium for their services.

The skills and expertise required to build and operate these new classes of businesses are quite different from the old ones. This raises the question: how will traditional players adapt?


For as long as manufacturing keeps growing, not one will complain about the three phenomena described above. Let’s all enjoy the ride for the coming years.

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