Print Me a Liver

There is a scene towards the end of Star Trek II: The Wrath of Khan, where Captain Kirk, being hunted by Khan and out of necessity defending his crippled spacecraft, maneuvers it into a nebula that disables both ships defenses and navigation.  Kirk makes the observation that Khan, unlike the starship crew, is accustomed to living only in a two dimensional world, previously confined to the planet’s surface, and likely does not have the perspective to think in the 3D manner required in outer space.  So Kirk launches an attack from underneath Khan’s ship, correctly supposing that Khan is only thinking in the right/left and forward/backwards dimensions, and not in the up/down direction.

In the business world we too are often caught like Khan, unprepared for a strategic threat from outside of our particular domain and comfort zone.  After all, we’ve been in this industry for decades, some of us even invented it – if anyone is an expert in this field, it’s us.  We plan for incremental change and react to incremental change.  Version 2.1, then 3.1, then 8.6.  Product line and brand extensions.  We centralize, then decentralize, offshore, then reshore, acquire complementary technology and market share, and occasionally (but not often enough) divest or shut down unprofitable lines.

Strategically we tend to concentrate on just a subset of Porter’s Five Forces: always, of course, the Direct Competition, and often the impact of large suppliers and/or customers.  We do take note of the New Entrants once they’ve reached a level of visibility that garners them the attention and label of “niche player”.  However, the threat of substitutes – products, services, materials, and especially, business models, are too often overlooked until it’s too late.  Even then, as I described in an earlier post, “Surfing the Disturbance”, our initial reaction once we’ve recognized the threat is often to double down on our own need to return things to the status quo.  When I think of such a disturbance, the book publishing and selling industry comes to mind, rocked once by Amazon and then again by the eReader, and the turmoil might not be over yet.

In that vein, with one man’s threats as another’s opportunity, the potential for disturbance in the physical goods market from 3D printing, or more formally, ‘additive manufacturing’, is significant, and is quickly moving beyond its initial prototyping niche and into the mainstream.  A few of the examples that make the point spectacularly include:

• Printing of internal organs (this TED Talk is two years old now – can you imagine the progress that’s been made since?) and the printing of skin tissue for burn victims
• Printing of drug delivery systems designed to accommodate and make use of your individual genome.
• Internet ordered/customized products, printed right in your home on your personal printer (professionally designed – personal CAD/CAM designing is still a ways off).
• Printing of replacement parts on site – no more warehouses and trucks full of everything except the one part you need.
• NASA envisions 3D printing as the only viable way to maintain a long term colony on the Moon or Mars.
• Food, like these chocolate confectionaries, and perhaps someday, food for a malnourished world.

All of this is beginning to feel eerily similar to those food replicators and Dr. McCoy’s surgical tools on Star Trek, isn’t it?  I first saw 3D printing in action with a small machine that printed an adjustable wrench.  Normally such a wrench comes in three parts: the main body, the sliding movable jaw, and the knurled adjusting knob.  The 3D printer, however, made it as one, single unit – all the separate pieces move and adjust as they should, but you’ll never get that knurl out of there without totally destroying the wrench.  To be practical of course the scales have to get bigger (which they are), and the variety and usability of printable materials has to improve.

Speaking of the materials, evolving hand-in-hand with 3D printing is the supporting materials science. The process is both requiring and inspiring new materials, some of which are delivered in bulk, while others are assembled molecule by molecule.  What in the past you machined out of steel or aluminum may in the future be printed using metal powders or liquids, ceramic dust, plastic or composite feedstock, live cells and organisms, and a whole host of yet undiscovered exotic nano and bio materials.

Talk about threats from substitutes: the production process, the materials, the logistics and likely the commercial terms and business models as well.  It’s enough to make you wonder if asking the strategicquestion: “What business are we in”, is enough?  Still though, with robotics, 3D printing, nanomaterials and who knows what else, the reports of the death of manufacturing are greatly exaggerated.  While direct manufacturing labor jobs will likely continue to decline worldwide throughout this decade, manufacturing’s share of global GDP is likely to rise as the focus on innovation and business/customer value comes to fruition.

By Leo Sadovy, EPM Contributor, from: http://blogs.sas.com/content/valuealley/2013/04/16/print-me-a-liver/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ValueAlley+%28Value+Alley%29

Leo Sadovy handles marketing for Performance Management at SAS, which includes the areas of budgeting, planning and forecasting, activity-based management, strategy management, and workforce analytics, and advocates for SAS’ best-in-class analytics capability into the office of finance across all industry sectors. Before joining SAS, he spent seven years as Vice-President of Finance for Business Operations for a North American division of Fujitsu, managing a team focused on commercial operations, customer and alliance partnerships, strategic planning, process management, and continuous improvement. During his 13-year tenure at Fujitsu, Leo developed and implemented the ROI model and processes used in all internal investment decisions—and also held senior management positions in finance and marketing.Prior to Fujitsu, Sadovy was with Digital Equipment Corporation for eight years in sales and financial management. He started his management career in laser optics fabrication for Spectra-Physics and later moved into a finance position at the General Dynamics F-16 fighter plant in Fort Worth, Texas.He has an MBA in Finance and a Bachelor’s degree in Marketing. He and his wife Ellen live in North Carolina with their three college-age children, and among his unique life experiences he can count a run for U.S. Congress and two singing performances at Carnegie Hall.