Disrupting An Entire Industry | Jay Rogers | Exponential Manufacturing

here we go a little bit of a story from a practitioner in this story is the end the end of the assembly line the end of the showroom floor the end of the soft talk system the hard sell front desk the big size inflatable girls and overinflated inventory that absolutely must go away this is the end of the junkyard full of old cars spilling chemicals into the earth born of the cradle to cradle

manufacturing

concept, the president appealed to be the exact car he wants, melted down, deconstructed and brito to be the next unique car vehicle

manufacturing

as we know it comes to an end and for vehicle manufacturing a triptych begins thank you, thank you, if you are going to transform a brand or a product, an old saying says that they cannot be done things the same way.

I think the definition of insanity is well proven in everything that has been discussed before me, so as a practitioner and what is happening in this

industry

, we are finding our way to learning these concepts while executing them, etc. Going back to the drawing board and doing things differently was essential. I remember the first time I sat down and read some of these treatises on Industry 4.0 and thought about how I would conceive a business in an

industry

to apply these new thoughts and At first it was imperative to go back to the drawing board, so we came up with two poles to hold on to co-creation and micro-manufacturing, so for us to co-create with someone is a brand or a customer of a brand working together with a community and community can be broadly defined to include other customers, include suppliers, givers of ideas, solvers of all those kinds of things and it is, by definition, a curated interaction.

There was a time, at the beginning of open innovation methods, when you could think of just searching. answers and move in that direction, but as you can see, it's a complex picture and in Hardware there are pitfalls everywhere insurance, finance, security operations, legacy employment contracts, so curation is a way to cut through the chaff and , therefore, for us, bringing a community. together was essential as the first pillar to cling to in this effort to return to drawing. Here you see behind me some of our community members, real people that you've generally heard about in the last couple of days, but these community members are the ones who came up with the ideas behind Of them, incredible young inventors, people who led an ad hoc, breathing workforce to come up with the products behind them, this has been a journey along the way, it's like building a jet engine on the wing. from a plane you are currently flying on, it is a big challenge to handle the dirty masses and work with them because you definitely don't own them and you don't have a work contract, but from seong-ho Kim at the top left who led the first co-created car from the Guinness Book of World Records the rally fighter you see sitting behind him that just appeared as Letty's car in Fast and Furious 8, the fast eight to the bottom right where you see the best and most brilliant US co-creation of a pair of launchable mission transports capable of launching 4G LTE drones in silent mode for nine hours.

All of these things have been co-created in microfabrication of the other part of the two-legged stool if the will that we will cling to in this era of going back to the drawing board for us is, by definition, expeditionary, we are not trying, as John mentioned earlier, sticking to the core for us, this is about innovation and manufacturing at the edge. of the business and these assets, the ability to be efficient and be able to keep the newest technology at the edge is what a microfactory allows when we work for ourselves and when we work with other clients, what you will find is that people say I already have a factory, so all I have to do is use that asset and it's not so much about the machines that are there, but about the expeditionary or forward-deploying ethic of engaging those machines in a ballet of digital, a digital symphony that be able to move them forward at the speed of a community that's co-creating and that's essentially what a microfactory is all about, so here's a photo of our microfactory in Tennessee.

It has been carefully orchestrated as a scenario to cling to. this ballet of co-creation, but the bottom line is that, at best, it is capable of being reconfigured all the time and the images you see here are using digital methods to be able to work so that local engines can design, build and sell vehicles quickly, so if you saw the final notes of what we do, we would say that those two pillars, co-creation and micromanufacturing, allow us to launch vehicles in the case of Local Motors five times faster with a hundred times less capital because we use more mines five times faster with a hundred times less capital because we use more mines that is the general thing now there is compensation there is no free lunch there is always something that is a problem and for us we are using the Deloitte grafts that they have presented in the book and they have added only a small part, which is what it means to be in the lower left corner, it is the realm of an economy of scope, it is where microfactories and Excel exist to make money, so if you look at this curve demystified and it is in your book.

The parabolic curve that descends from the top left to the bottom right is actually more about amortization and sums up the traditional way that Alfred Sloan gave us of saying: this is how you make a vehicle if you can flatten that curve to what you would say it's the additive manufacturing cost curve, where you don't really get an economy of scale, you have the opportunity to be able to create a production space that exists underneath this cut wave, so to speak. and to the left of the balance line that's where microfactories excel because you get economy through scope.

An economy of scale is an economy driven by reducing costs so you can expose your margin and become bigger. Economics of scope is actually the opposite: it allows you to launch products and increase the price or willingness to pay so you can increase your margin. An economy of scope versus an economy of scale, so back to the drawing board when you put co-creation and micromanufacturing together, what you are doing is responding to consumer desires more quickly in your associated pay drive with that really important piece here, like a super huge, important piece, like a teacher of mine used to do. every time there was something to remember for a test, so the super huge and important pieces don't have to compete with each other.

You can move from the blue box on the left when you have a George Foreman grill and find out what the theory is. Karen talked a little bit earlier about fast work, which is based in many cases on Eric Reese's Lean Startup principles, if it works, don't fix it, do it en masse, but if it doesn't work, sure don't do it. paying for what you have to do to expand it if it's going to fail is a pretty simple precept so this is that curve explained why maybe something that's just a skosh different from what you've heard for the last two days is the Y The And for me it's super personal.

I felt there was an obligation to be excellent in doing this and it is what guided me and the team that joined me, who similarly share this mission-driven obligation to be excellent. This was my grandfather. He owned the. The Indian motorcycle company, a historic motorcycle brand that existed in the 40s and 50s, started in the early 20th century and effectively what it did was build a great motorcycle brand that failed in 1953 and learned a lot about what I intended to invest all the money in a new factory for a new product and was building thousands of beautiful looking CC bikes when consumers really wanted a fairly simple, small block motorcycle, so when that business failed, it happened.

He turned around and said, "I'll never go." make that mistake again and he went to the worst industry to make the change, which was the steel industry, and he built the first mini-mill, so the mini-mill for him was about how could he make this cost lower and he looked around and there it was all. This scrap steel and one of the things that came up at that time in the '50s was, could you use scrap steel to reduce your costs and then you could compete in areas where people couldn't compete before? Clayton Christensen has now spoken. about this, it's one of the core areas of disruptive or low-end disruptive innovation, well that was the business my grandfather built after learning how not to do it on an Indian motorcycle.

There's a lot of chip from that block that I took. A personal story is important because there is an obligation to be excellent to your customers, to your stakeholders, to your team members, and, in today's Internet age, to everyone who could theoretically contribute from that organization workforce. that has been talked about, so he loved education after the Indian and Texas motorcycle industries. He then founded the PBS CPD Sesame Street Public Broadcasting Corporation. This is the legacy of this man. Why is it so important here and for me? Because at the limits of training this workforce we are talking about how to take care of bringing a long world. of digital citizens that is why I started with that phrase because I believe in it implicitly and from someone who comes from my origin right in my life you will understand a little more why that transition is significant, so when I am 13 years old my parents moved us on this boat I lived a charmed life I went around the world for seven years on this boat and it was an incredible experience to see the world from the sea and it was also a charmed life because it was something where I could experience not only what it means to give the around the world but also how to live on the ocean and keep a boat going clearly it is not a small boat but there are bigger ones and for me it was an exhibition of systems that come together to see the world.

There were a lot of other lessons built into this that I wasn't aware of until they happened and that was shortly after this moment when my father went through a huge financial setback and lost everything, so I was able to see the world from the sea and see The world from on high watches a grandfather who had built many businesses and then figures out how to make my way to be able to take these learnings and make them a reality so soon after graduating from college, what my brothers put me through. I was able to pay off that debt by going to China and working for a medical device company.

I spent three years there manufacturing in Shanghai and Beijing and that made me learn a lot more about what it takes to do disruptive innovation from the ground floor of the building. things to change people's lives diabetes was growing at epidemic proportions too academic at that time in China due to a change in a food culture that was finding an efficient genotype and they needed solutions things that had already been created but needed to reach the market quickly and at an efficient price, so that was my first experience after college, a little later I decided to turn right and it was probably the biggest right turn I've ever made in my life. and that was joining the Marines, so I became a Marine and for nine years I served the United States in the Marines as an infantry company commander and a scout sniper and it was an incredible time to learn leadership and part of feeling the obligation to be Great, what was I going to do with that training as I progressed?

This was my first platoon shortly before our first deployment on a training mission and I took those Marines at their word and learned everything I could from them and everything I do today. it's giving back to a lot of the things that I learned during that process and during that time, so in the winter of 2004, just before 2005, two of my friends died on deployment while we were in Iraq together and one of the messages that I picked up From there, things had to change, things had to change in the vehicle ecosystem and it was a place where this change was going to begin.

The greatest system of all is the one I sought to build this business. I was really inspired by Marie. Lovins at that time I had been reading his book on how to win the end game in oil and that was the goal I was going to go for next. I wanted to make a change and I wanted to succeed. One of my friends who was murdered was shot on his way out. a Humvee and was wearing a Navy Cross for his actions before he died that day, but if the vehicle had been different I guarantee he would still be with us today and the other friend was my first operations officer who was shot in a helicopter that landed. in one of the few bodies of water inside Iraq he capsized and drowned inside the helicopter, so making our hardware different was an imperative for me and I am proud to say that facing difficult industries is not always the most difficult place fordo it. business, but you'll see a little picture of Henry Ford on the Frederick Taylor tour, if you like, at the bottom left and then today is the factory just before Tesla, so to speak, but there's not much difference in these, the luck was cast. when Frederick Taylor put the scientific method into action and perhaps one of the only other problems is one that Karen mentioned just in the previous slides about Alfred Sloan coming into action Toyota style, but now the change is upon us, so which is two billion.

The dollar industry, just the auto industry itself is smaller than the energy industry, but definitely one of the largest and is a servant of the energy industry for obvious reasons. 70 percent of our petroleum end use in the United States and other developed countries goes to automobiles and light vehicles. Seven zero percent trucks change the efficiency of our cars and light trucks and you change the

entire

energy equation, so it is a direct effect, plus our loved ones who ride in vehicles that are not safe are subject to what will happen if they get hit, so safety is imperative, Administrator of the National Highway Transportation Safety Administration. has gone on record that 95 percent of all vehicle accidents are ninety-five percent human caused, so if you have an argument about how robots will be unsafe on the road, I recommend that you think about the 95 percent of accidents are caused. for humans that are not robots is not enough, we need to make a change, the transition can be painful and the companies that come to do it, I bet they need to have the best and brightest minds working and I think those rules are very similar to the open.

Open source software is best left to the masses. Yes, you expose yourself to piracy, but you also expose yourself to the ability to climb a curve that is much faster than many can do on their own. This is a case where open source software was meant to rule. So for us, building a business around this imperative led us to the question of: could the answer? More Tesla than Tesla did and our thinking was that no, a change was needed in the way the microfactory could operate. In order to uncover trends, faster autonomy wasn't even on people's minds for vehicles very recently, there was a list of vehicle features, I mean, sorry, of products that probably wouldn't be altered by technology. intelligent. systems, robotics and other things like that and the vehicles surpassed them well, we have changed that in a very short period of time.

Remember when you thought you would always drive a gas car? Some people still do it, so those changes are coming quickly and it's not enough to build vehicles this way, so if you think about it, striving for less was what I really wanted to get to and this is what I was trying to get to. arrive during that time. This is the Mercedes 300sl Gullwing on the left, a historic vehicle built before. -war and beautiful example of German engineering this is the Local Motors straddie on the right no one knows what it is it is not the story Mercedes 300sl Gullwing but what makes it special and different is that it only had 50 pieces and we printed it in 40 hours pressed Go and it came out the other end and then we moved it away, that's one way to change manufacturing because there was no tooling cost.

You've heard people talk about maybe this being possible, come take a ride with us and you. We will see it in real Technicolor and what started in 44 hours now takes us much less time, so our exploration and our vehicles began with this vehicle. You heard about it a little bit ago, the rally fighter we couldn't 3D print a car with when we started. the rally fighter so we started with digital methods which were the best there was, soon after we got on a motorcycle where we were able to 3D print the intake and this was also designed in our community and we printed the

entire

intake except the six. screws that went on the front we printed the cover we printed everything we did this computational fluid dynamics to optimize the airflow in that intake pretty simple exercise but there were some other interesting features about it when you ride a motorcycle your knee could fit right where the knee landed shovel and we moved it and printed it again, but it showed the potential of what could be done that we couldn't conceive of when printing a frame or printing a fuel tank or other elements like that, fast forward to just two years after that , we began to discover some of the materials that allow us to print a vehicle very similar to the one you saw in the video above and this was the world's first 3D printed car, another entry in the Guinness Book of World Records. trotty designed by a member of the community whose Italian joined us at the inauguration or in the unprinted, so to speak, of the first vehicle and told me that when we were leaving in the car he said that only the country that could take a man on the moon You could invite an Italian who knows nothing about creating vehicles so you can design the world's first 3D printed car.

Something about it was just magical, so co-creation and micromanufacturing at its finest soon after we are still in this community, member Kevin lo is a Hewlett Packard Employee, sure he doesn't work for local engines and works for what you might imagine is a totally different company that is involved in 3D printing, but Hewlett Packard was very excited to see it rise to the top of this challenge. Designing the first highway-capable 3D printed car, carried by four people, travels approximately 110 miles per hour and was a first attempt to take what you saw in this trotty to the next evolution: the opportunity to take a vehicle and truly reinvent the red powertrain.

The unit and the batteries and all the things that go into a feature to make it different. Shape. The way you set it up and get a total tool cost is the promise of what this technology has allowed us to think about and really allows you to create a digital community. So what is this boring box of slides that has that seven-year number underneath it? This is the traditional vehicle launch cycle and goes from raw materials left to finish. to customers on the right and is missing the important recyclability cycle or end of life cycle that occurs in the future, but this is the original life cycle of a vehicle for us, getting rid of logistics and dealerships was incredibly important. part of this and really when I say get rid of them I mean combine them with the micro factory and then be able to align the suppliers with that micro factory so that you can reduce the PDP to six months, that is what digital can offer you. remember faster, less capital due to more minds, this is what explains in a visual crunch, a little sneaky and happens outside of our microfactory, this microfactory if we go from the integrated microfactory experience counterclockwise watch through the light lab towards 3D printing and assembly is the Box that you saw on the hill in Tennessee in that photo I showed you, it's a real type of building and a real building and the one we have in Berlin is the himself and is able to take instructions to make these vehicles and kick them out the door for customers to buy and is not just focused on business to consumer or business to business, it is B to a, his business for everyone, We do not intend to be pigeonholed when seeking economy of scope.

It is necessary to be agile so that we can serve both types of consumers and governments. PDG, so if you think about this, our latest vehicle is a logical extension of where we come from: industry is going electric, industries are going autonomous, and platform technologies. It really needs to be completely open to be able to add things, so we did a challenge for urban speed vehicles and the alley was the result of that challenge. The alley was designed by community member Edgar Sarmiento of Columbia and Edgar not only won an award for this but he will receive a royalty for every alley we deliver and we will deliver 25 of these this year. 25 of them and this vehicle, if you did it in a component style, it would look like what you have on the left and since we're at the

exponential

manufacturing conference what a luxury to be able to talk about some of these differences component right here digital direct there Place them side by side and you'll start to see some of the differences.

What are the differences that make this a component vehicle? is 1600 pounds we can save some weight with 1500 pounds, but the assumption that this is a weight savings from the beginning is probably incorrect, that is a side effect of being able to do things in a direct digital process, some things that have been overlooked in the first pair. of days or the presentations that we've talked about is how long it will take to be able to do what you want in any geometry at this size, there are still real obstacles to being able to put that in your hands and allow you to get away with it, but today the best we know is that we will shoot to maintain the same weight, however, this is really amazing.

A 60x parts reduction and our reduction so we can build a vehicle 60x, it's amazing how fast you can do it. something without doing it the way we've always done it before as a vehicle component, all the little fasteners, all the glues, all the things that we want a robot to repeat in the traditional ethos of what we're doing change when we redesign from the bottom up. Upward transforming a product or a brand means you can't do it the same way you've always done it, this was an unintended consequence and if your mind immediately jumps to what this does to the workforce, I'll take those questions as they are.

They may be out of the picture, but what I would tell them is that the number of young Marines who don't have college degrees who are learning this system and learning how to build vehicles this way without a college degree, to me it's incredible reading. to the fact that this job of being able to put a fastener on a vehicle will disappear in the future, it's a change for sure, but it's definitely a change for the better in my opinion, the unit cost reduces the cost of doing this five times. vehicle for materials and parts with a five-fold reduction, so when you look at it I think you can see why we need to develop it, but it requires certain things like a new set of tools, the ability to be able to do digital manufacturing is not just about printing . but it's also about subtraction and assembly and you need new tools, new software tools, new hardware tools and there are a lot of vendors that are here and in the rest of the world that are working to provide these tools and we need them desperately. urgency and if we have to do it ourselves we would prefer not to, it would be better for us if we could make that ecosystem emerge as quickly as possible, but today there is a new way of analyzing and there are companies working right now. about this, but we need materials science to come and provide those precepts so we can make the analysis tools more predictive and better, but the disruptive result is a 3D printed ollie, so what you see and I just told you show and we will deliver it to you. is a fully 3D printed solution Hello, my name is Ollie and I am making history, this is a great day in automotive history, not only is it the day Ford Motor Company was incorporated on June 16, 1903, but It's also the day we made people feel comfortable. with the idea of ​​traveling in a completely autonomous vehicle.

I'm Jay Rogers and I'm the CEO and co-founder of Local Motors. I am the first vehicle with cognitive capacity. I have room for twelve passengers and you can ask me anything, Allie, why. don't say hello hello everyone my name is Allie I am an autonomous vehicle powered by IBM Watson technology I can help people get around National Harbor. I'm hungry. Where can I get some food? National Harbor has great seafood. You like that sounds great, that's good, try the crab cake coffee, okay, I'll go there for dinner, okay, don't forget your umbrella, there is a severe storm warning tonight, the sensor installed in this vehicle allows us to feed . data to Watson and view data back to Ollie to make life more enjoyable thanks Ally, by the way, I like your boat.

I am what's next in automotive innovation, that's incredible and to see that happen in just under a year being designed by a community is the promise of what is to come and what the next result will be if that doesn't change your mind about what creation and my co-creation and microfabrication can do, maybe some of the other little sneak peeks of what we're doing in the advantage can help LocalMotors focuses on land mobility. What we've built with GE first, starting with the first build, as Karen mentioned, and if you were in the design workshops with Diane Fink Heusen, would be the ability to accelerate GE production. appliance business 24 times using co-creation and micromanufacturing, we replicated an entire ecosystem with those same two precepts to change GE's appliance product development process and then we'll do it again for Fuse, so we work together with our partners from GE to start. inspection technologies and then moving that fuse-triggering capability to other areas around General Electric's business may be one of the parts that allows the shiny factories to come to the fore on that blue edge before bringing it to the masses additionally in the air.

Some intrepid people, one of whom is here in the room today, saw this potential in Airbus and said we had to make this happen for aviation. It's one of the ways we can spend less and do more and change people and change their lives. That Airbus can create co-creation and micromanufacturing is one of those journeys that we started 18 months ago and moving it now to what will be the creation of a first microfactory for Airbus is the result of that and we designed and built this through this drone. cargo, both 3D printed and using traditional materials, and flew it in a 27-day exercise from design to creation as a lift-and-pusher cargo drone capable of carrying five kilograms over 100 kilometers to fit a mission profile of co-creation and micromanufacturing.

It may affect household appliances, inspection technologies, aviation equipment and ground mobility, so what's next? I announced that we are partnering with Hewlett-Packard so we can focus on what will happen when SpaceX or Blue Origin take us to Mars, how will we have an ecosystem there? be able to support each other, so the Mars project initiative that we are embarking on with Hewlett-Packard allows us to focus on food and agriculture, allows us to focus on habitats, transportation, water systems, these are the things that will allow us to change the world as we know it. I want to thank you for your time today and we have three minutes left and I would love to answer one or two questions so that maybe we can expand the discussion beyond what I wanted to tell you.

The biggest obstacles to it becoming a mass-produced vehicle. What are the biggest obstacles to becoming a mass manufacturing paradigm? The goal is not to be a mass manufacturing paradigm. Our goal is to be able to build the products people want and transition to mass when necessary. The goal of a microfactory is not to become a megafactory. The goal is to be efficient to be able to make money at low volume and discover the profits and then pass them on to factories that are able to scale them. Do we print or produce the motors ourselves? No, when we were looking at how to print the vehicle, one of the first things we did.

What we wanted to do is change the build to make it more flexible and so the opportunity for us to be able to focus on that was the first thing we looked for. Now, what you look at is what you can do while looking at the road. Axial motors. We were all there at the time we started, but the first hub motors will be incorporated into our vehicles next year, which means changing them out of the center of the vehicle and then beyond that, there are certainly people working. in high coercivity printed materials that will allow us to think about the reuse of rare earths and those are interesting possibilities that remain in the future, so certainly motor printing is something that will adapt well to the future technology that is in sight at the moment. in laboratories, but it is not yet ready for production, but it is that type of technology that we want to put online.

Yes sir, what a phenomenal story. Can I shake your hand? Please, my God, sure, how about I come down and shake his hand? Thank you. Thanks, well, I mean, maybe one more question. Yes of course. So what we're looking at when we look at those four systems on Mars is trying to get ideas from people about how to solve these prepositioning problems, if they've done anything. Fly before, whether exoatmospheric or endoatmospheric, you know that weight is an important weight and size are serious considerations and then also if we are going to populate other planets, getting to the simple things of growing in water and others.

Elements like that are important, so as we get closer to that project, what we'll do is break it down into its components and talk about how water is created on Mars, so if you're looking at what's there, how can you get it? a system where you can bring drinking water or water available for agriculture or whatever other needs we have to be able to do that and that's going to be the theme of the challenge so maybe the best way to think about it is us. will employ a scoping project with subject matter experts and address the challenges to developing aquatic habitation transportation and terraforming on Mars, so more people will follow the project.

Okay, thank you all very much, it has been a pleasure. Greetings.