Digital Manufacturing in Perspective

Earlier this year, John Zysman at UC-Berkeley released a very thoughtful working paper on digital manufacturing. It provides a useful context for understanding the influence of IT on manufacturing. It helps us understand what lies ahead and where we must focus on attention in trying to develop solutions to our manufacturing competitiveness problem.

Here is what Zysman has concluded.

The digital era is defined by a set of tools for thought, tools, data communication and data processing technologies, that manipulate, organize, transmit, and store in digital form information, with information defined as a data set from which conclusions can be drawn or control exercised. The emerging digital tool set and networks mean that information in a digital form becomes critical to firm strategies to capture value and market position.

Business strategies and organization, the business models that define the links between objectives and implementation, have all evolved in response to and in implementation of these tools. And with that evolution, the meaning, not just the role, of manufacturing has evolved as well. The term production, as the act or processes of producing something, can encompass a range of products, digital as well as physical, and also delivery platforms that provide services. One implication clearly is that both matters of software and supply-chain management must be understood as questions of production as much as of service.

For a company the question is how to use production as a strategic weapon. For a country the question is how to be the most attractive location for strategic production. When production changes very rapidly, jobs can be dislocated or altered. However, if production doesn’t change, then those jobs become commodities and are vulnerable to innovation abroad or to moving abroad. For both company and country the question, differently framed for each, is how to adapt to the changing logics of production.

Does production matter? Absolutely, but production can either be a commodity that is vulnerable to relocation or closure or it can become a strategic asset. As corporate strategist and national policy makers, we must help make sure that production capability is a strategic asset that we control, not one that is used against us.

Source: BRIE, UC Berkeley