Online business models are disrupting industries. E-commerce was probably one of the first disrupted segments. Just think about it… 10-15 years ago we debated if people will be ready to use their credit cards online. Changes will be coming to other industries and verticals. Manufacturing is one of them. Back in 2012, I had a chance to run a panel discussion at PLM innovation 2012 event in Munich. You can find my summary in the following post – The future of PLM business models. Communities, Crowdsource and Open Source was one of the topics we discussed. Now, after two years, it looks even more interesting.
I’m sure you’ve heard about Kickstarter – crowdfunding online community. Kickstarter is gathering money from public (backers). Project creators choose a deadline and minimum funding goal. Kickstarter helps to raise funds. People who back Kickstarter projects are offered tangible rewards and special experiences in exchange for their pledges.This model traces its roots to subscription model of arts patronage, where artists would go directly to their audiences to fund their work.
I read How to deliver your kickstarter hardware blog by CircutHub. Interesting statistic about Kickstarter – 55% of all campaign are hardware category since interception in 2009. Article speaks about a challenge of successful hardware projects – ability to scale up manufacturing. Here is an interesting passage:
…it creates many overfunded projects that need to scale to high volume quickly but whose companies do not have a comprehensive understanding of the manufacturing process… Designing and marketing your product may be relatively easy, but quickly scaling and getting your product to market is hard. Skipping directly to mass production requires relationships with manufacturing partners and logistics expertise. Vetting factories and acquiring expertise is expensive, time consuming, and distracting. As a result, the more funded a campaign is, the less likely it is to deliver on time.
To help manufacturing companies to deliver on time sounds exactly one of the problems PLM is focusing on. However, Kickstarter customers are probably significantly different from large manufacturing OEMs. To provide engineering and manufacturing tools to these customers can be an interesting opportunity. If you read my “Why PLM stuck to provide solutions for SME?” , it is not going to be a simple task. Will current PLM tools be a good value for young manufacturing startups? This is good question to ask and check about.
What is my conclusion? Changing business manufacturing landscape can provide new opportunities for PLM vendors. It is probably different from what software vendors seen before. However, the number of young and new manufacturing companies is growing these days. Manufacturing companies need much less funds to start production. Similar to open source software, we can see a large number of new manufacturing firms starting to produce new and innovating products with very low initial cost. Then the challenge will be to grow it up and manage product development process. Existing (or may be new) PLM systems can help. Just my thoughts..
Best, Oleg
