Extrapolating on my limited from hardware product development experience, I would think that in the future, the person/company with the best 3D printer wins the manufacturing game. Ideally the manufacturing will be mostly commoditized that the differentiating factor will be 1. who has the better design and 2. who owns the bigger(better) 3D printer. It is still uncertain how it will pan out, but one could imagine a world where everyone owns a 3D printer at home and download the design file and print stuff out. Only the raw material to be fed into the 3D printer will be delivered to your house. Thank about it: 3D printers printing 3D printers!
Imaginations aside, I would think that the best way to shorten the development period and the associated cost is to apply AI to the engineering design phase and run as much test as possible, ideally simultaneously, to come up with a design that would require minimal prototyping and testing.
Amazon will stop at nothing to fully automate the fulfillment process and the medium/last mile delivery, because unlike the human labor cost that always increases, the cost of tech/robots always decreases as time goes by. I would presume that the recent pay increase for the hourly workers is not a major issue because Amazon intends to fully replace any human worker in the mid term. Their acquisition of the robotics company Kiva in 2012 for 775 million dollars and the subsequent renaming to Amazon Robotics is an example of their endeavor in this domain. The robotics company no longer serves outside customers. Only people working in the fulfillment center will be the managers working on further optimizations/improvements and the robotics maintenance team.
From the operational perspective, because 3D printers used in additive manufacturing are versatile in that they are not limited to a specific product or model, Stryker will have the ability to lower the cost by producing multiple products/models on a set of printers, maximizing the utilization rate.
Another key benefit would be the ability to tweak the dimensions of the products so that it is specifically tailored to the individual, as opposed to using a standardized shape. Especially in orthopedics, this would increase customer satisfaction and can be done with virtually no manufacturing cost increase.
Could it be that many of the investment banking functions become automated by AI and the bank with the brightest AI becomes the winner who takes up the entire market? It may be that one of the big tech companies armed with a machine learning artificial intelligence decides to takeover the investment banking industry. Unlike any start ups, it has the resources to hire an entire team of investment bankers and replicate all the functions. No more 100 hour work week and financial modeling would be required. It may not replace all the bankers, but only a small fraction of the people currently employed in the industry would be needed to oversee the process. The investment banking as an industry will be fine, but the work (or job opportunities) might be affected drastically.
From the use of the machine learning to improve safety to using artificial intelligence to schedule and plan resources, there are so many ways the construction industry can benefit from the recent development in digitization. Throughout the history, construction has been highly labor intensive despite the industrialization. In my opinion, the biggest innovation in construction would be mechanization of cranes. Invention of steel concrete comes second. The industry values the successful track record more than anything else and the uptake of the new technologies has been painfully slow. Based on my personal experience, the accumulation of data and lessons learned are not systematic and a lot of knowledge only resides in people, forcing repetition of same/similar mistakes in every 10-15 years. In order to change this entrenched culture, the benefit of adopting these technologies should be very clear and the solutions must be made easy to adopt. I sincerely hope that along with development in robotics, AI will automate much of the engineering, planing, and the actual construction phase.
The practice of using third party sellers’ data for its own label business is a contentious issue in Europe, where the EU’s regulatory body is probing into the anti-trust violations. It does give Amazon a massive advantage in deciding which product to pursue to increase its own sales. I personally do not think it is an anti-trust issue but it would be interesting to see how Amazon handles this regulatory issue.
Tying together the news content recommendation and the tailored advertisement, both by using AI is brilliant and the fact that they were able to resist the funding of Baidu, Tencent and Alibaba is an amazing feat on its own. All three giants must have tried to copy the AI solution on their own but must have failed and it shows that Toutiao indeed has something unique in terms of technology.
Expanding their business into creating news contents by having the AI to write article is amazing too. It may not be able to write an analytical piece, but AI is better suited to write short, quick updates based on facts of the event. It would deeply impact journalism as most journalists will not be able to compete against AI in breaking the news.
For global exansion, Toutiao could leverage on AI to teach itself the different languages. AI is truly an exciting field and it is really beginning to impact many industries, the way we work, and even our daily lives.
Reading this article makes me ask myself whether in order for the open innovation to be successful, the process needs to include the execution/realization phase as well. Starbucks’ endeavor in this domain appears to be limited to the crowdsourcing of ideas. This may be the reason why people put out ideas that were popular but unrealistic/difficult to implement. In the software space, a full cycle of open innovation is easier to execute, because it can be done remotely by anyone with coding skills and access to a computer. In hardware/service sphere, this appears to be nearly impossible to do. Spread of additive manufacturing could enable individuals to own production capability and enable end-to-end innovation cycle, but if this were to happen, the need for large corporations to manufacture products may decrease.
Initial investment required to set up 3D printing equipment for large components (such as the air foil) may be bigger than the non-additive, traditional manufacturing equipment (such as molds or press), but because the 3D printer can be used for subsequent models (not bound by the physical shape of the mold), it may end up costing less in the longer term.
One thing I found very intriguing was the fact that most of the components and sub-assemblies for aircraft manufacturing is done in a geographically dispersed manner, such that parts have to fly into Renton/Everett/South Carolina. The transportation cost must be significant. The fact that it is a very complex, expensive(USD 80-200mil per unit) product does not justify such dispersion, because shipbuilding and offshore oil & gas construction (USD 80-5,000 mil per unit) has a more geographically concentrated manufacturing base. Automobile manufacturing also has a cluster system where the factories of sub assemblies and parts are adjacent to the main assembly factory. Perhaps additive manufacturing could reduce the complexity of manufacturing for aircraft and bring the manufacturing sites closer to each other, thus result in reduced cost?
Andy Rubin first approached Samsung for funding for Android back in 2004, a few weeks before Google’s acquisition. This is an example of Samsung missing out an opportunity for innovation that another company seized and built an entire platform of technology and business. With its root in manufacturing, the entire company has been optimized for fast decision making and even faster execution based on the homogeneity of culture and strict hierarchy. The company has made a lot of effort to change its culture and become more software oriented, as opposed to hardware (manufacturing). Still, the bulk of revenue and the majority of profit comes from the semi conductor business and having lost the opportunity to become a platform player in mobile operating system, the company essentially became dependent on Google’s android. This is a major obstacle for Samsung (and similarly for LG Electronics) because despite their presence in home appliances/electronic devices they cannot take the lead on open innovation because they have to rely on other’s platform. Its own attempt to build an ecosystem largely failed to gain traction (Tizen OS) due to the oligopoly state between Google and Apple, and now Amazon.
In the past, Samsung was known for sticking to organic growth as opposed to acquiring companies with the right set of technology. It’s acquisition of Loop Pay which became Samsung Pay about five years ago was the first instance where Samsung made a significant acquisition and integrated the technology to its product offering. Since then, it has been making greater effort to be more open to leveraging innovation opportunities outside of the company. Samsung’s GIC, now renamed to Samsung NEXT, is located in the Silicon Valley and acts as the corporate VC/incubation center, aiming for more collaboration/acquisition. Most recently Samsung has acquired the German multinational acoustics company Harman-Kardon. It aims to increase its competitiveness through M&As in the field of mobility solutions and automotive electronics.
All these attempts are not quite open innovation in the software/service space, but today Samsung is taking a more fluid approach to innovation. In order to truly leverage the benefits of open innovation, however, Samsung unfortunately lacks the software platform to host the crowd-sourcing activities. It is a great hardware company in so many aspects, but it hasn’t made much progress in becoming a software/platform powerhouse.