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Are Makers a Threat to “Real” Manufacturers?

Posted By Jeff Moad, December 08, 2014 at 5:39 PM, in Category: The Adaptive Organization

Like a lot of people, I’ve been trying to understand what implications the burgeoning “maker” movement might have for industrial-scale manufacturing enterprises such as those that make up our Manufacturing Leadership Council. Sure, individual maker enthusiasts are gaining lots of experience with 3D printers and new additive manufacturing materials, experience from which “real” manufacturers might learn. But do makers really represent a competitive threat to “real” manufacturers?

They do according to a recently-posted blog by a former Boston Consulting Group vice president who asserts that, in some manufacturing industries, makers will be able to compete well against manufacturers with high fixed costs and will be a source of increased competition and margin erosion.

“The number of people choosing to make things for themselves may not turn out to be a very large proportion of the population, but it will vary significantly among products,” says Peter Acton, now founding director of Humanities 21. “And even a small volume reduction in industries with a high level of fixed costs (most manufacturing) can lead to more aggressive competition and serious margin erosion,” wrote Acton, in a Harvard Business Review blog.

Acton doesn’t specify which industries might be vulnerable to such maker-generated competition. But he does recommend that manufacturers begin assessing which of their products might be most vulnerable to substitution by maker-produced products.

But the implications of the maker movement go well beyond new competitive market forces, Acton predicts. The combination of new technologies such as 3D printers, maker-focused product selling sites such as Etsy, crowd-funding sites such as Indiegogo, and the availability of prodigious amounts of online product information mean that maker-inclined individuals soon will have the tools they need to create what he calls a “freelance lifestyle” in which they can work for themselves while retaining more time for creative and leisure activities.

Acton compares this emerging freelance lifestyle to the way most people lived in pre-Industrial Revolution societies such as ancient Greece, where most people made and bartered for what they needed and retained time to attend theatre, play games, and even invent important things—like democracy.

Acton may be getting carried away with the Greek analogy. (He can, perhaps be excused: He just published a book on “Manufacturing in Classical Athens”.)

But I wouldn’t completely discount the idea that new lifestyle choices by even a minority of consumers can impact large markets and industries. Have you checked out the cost of gasoline in the U.S. recently?

Written by Jeff Moad

Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit


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