It is 4:20 a.m. in South Island, New Zealand and a part in a robotic welder operating in a dark factory in South Island will fail in the next 12-hours. The robotic welder was designed, manufactured and installed by Butt Joint Inc. whose main factory is in Alaska, USA. Because of the level of advancement in artificial intelligence, the robot identifies this potential failure and orders its own replacement part by generating a smart contract. Rather than sending the order to Butt Welder Inc., the order goes into a decentralized network as a smart contract with part specifications and service level requirements. The first vendor capable of delivering within the contractual requirement – shortest lead time, lowest cost, etc. gets and executes the contract. Yes, this vendor can either be next door to the factory or in Svalbard, Norway.
The above series of events is a subset of the future of manufacturing and supply chain. With a combination of core technologies such as artificial intelligence, blockchain and 3D-printing, robots in dark factories will be able to maintain autonomy and minimize downtime by specifying, to a granular level of detail, when and what part needs to be replaced without any impact on the factory’s operations. They can adjust schedules or operations to absorb the effect of such events. Neither the use of predictive analytics to drive timely maintenance nor the concept of a dark factory is a novel idea, but the combination with blockchain and 3D printing to enhance traceability and decentralize parts manufacturing adds a new dimension. This means we do not have to wait on replacement parts from the original equipment manufacturer (OEM), parts can be 3D-printed by any local or remote supplier and the quality can be guaranteed through the layers of traceability and decentralization added by blockchain technology. To demystify this concept further, I would explain each of the components driving this solution and how they apply.
Artificial intelligence is the backbones of dark factories. It can be simplified as machines talking to each other through interconnected computers and providing real-time data that is collected, analyzed and used to drive actions. The insights from these data are used to drive decisions in these machinery. This allows for near-perfect efficiency, cost reduction, and high productivity of industrial operations. The data provided can be analyzed to detect any pattern that may provide insights on predictive failures.
3D-printing is an additive manufacturing process where layers of molten material which could be plastic, or metals are added together to form objects. 3D printing has enabled parts to be printed anywhere within a short period of time. Once 3D printing becomes ubiquitous, people can print objects including mechanical parts from the comfort of their homes once they have the technical specifications. One of the advantages of this technology is that it allows a small number of customized parts to be produced within a short period and minimizes material waste when compared with traditional manufacturing.
The third pillar of this idea is blockchain technology. Blockchain is an open electronic record structured around a peer-to-peer framework that can be shared among various parties to make an unchangeable record of exchanges, each time-stamped and connected to the past one. Blockchain infuses decentralization into the current business model for replacement parts manufacturing and supply, hence players of all sizes across vast geographic locations can print, supply and install replacement parts for robots in dark factories. With blockchain, smart contracts can be generated with specifications that vary from the qualification of vendors to the scope of the deliverable, and these contracts are self-verifying, hence no reliance on a third-party to ensure compliance. Blockchain increases traceability eliminates reliance of a third-party, reduces costs, and improves ease of transactions.
Combining these three technologies will make light-out factory maintenance more hands-off with the barest minimum downtime and a high efficiency. This may disrupt the industry value chain by eliminating dependence on OEMs, distributors and service companies that are currently major players along the value chain. Since small players can now print and supply parts, and any one of them can take on smart contracts, this industry will become decentralized. There will be value migration from OEMs, distributors and service companies to the customer as the decentralization will increase competition for customers’ business. This can be considered an architectural innovation as incumbent players in the industry value chain will need to adopt a new technological competence and a new business model to stay relevant. OEMs will need to have smaller manufacturing operations across multiple geographies and retool their operations for additive manufacturing in addition to adopting blockchain technology. Distributors may also need to set up small 3D printing operations as the industry value chain consolidates them. For service companies, bundling may be the way to go to compete against incumbent players that may embark on integration. Any of these major players may consider bundling 3D-printing of parts and maintenance services, to increase its competitive advantage.
Strategy in the Age of Decentralization 