Category: Innovation

  • Rebuilding American Manufacturing

    Rebuilding American Manufacturing

    US manufacturing is undergoing a resurgence, just without the jobs reports the New York Times in its story on the textile mills of South Carolina.

    The decline and recovery of US manufacturing is a story of our times – the industrialisation of Asia, trade treaties such as NAFTA and China’s joining the World Trade Organisation all saw Western producers move their operations overseas.

    A weakness with that business model are the extended global supply chains as goods spend months on ships following long manufacturing and design lead times, the exact opposite of what modern consumers are looking for.

    Coupled with domestic manufacturers’ increased investment in automated systems which makes labour costs a smaller factor and the sums start adding up for making things in the United States.

    Unfortunately for the workforce, those automated plants don’t require anywhere near the staff older factories employed and the skills required in today’s mills are substantially different from those needed in those of earlier times.

    Most industries are encountering the same change and new technologies make the modern factory very different to that of a few decades ago.

    The jobs aren’t going to come back in the numbers that were once employed, as the New York Times story illustrates with the decline in the working population.

    US-employment-changes-by-industry

    Despite the recovery in US manufacturing, today’s industry is very different to what it was last century, something that’s missed by those advocating a return 1950s style government policies to protect jobs in sectors like car manufacturing.

    Even if they are successful in rejuvenating local car factories, cotton mills or coal mines, the days of these plants employing tens of thousands of grateful cloth capped workers are over.

    Those politicians whose ideology is based on the old model, or businesspeople who want to work in the old ways, are going to find the modern economy very difficult and challenging.

    Image of cotton threads on a weaving machine through jbeeby on sxc.hu

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  • Microsoft’s continued evolution

    Microsoft’s continued evolution

    Today’s investor briefing by software giant Microsoft shows the company’s evolution as their markets shift.

    Microsoft Chief Operating Officer Kevin Turner broke out the key numbers for the company’s revenues which illustrate just how the company’s business model is changing.

    Over half of Microsoft’s revenues are coming  from enterprise customers and of the product lines, Office unit makes up just under a third, Server and Tools slightly more than a quarter while Windows has fallen to 25 percent.

    Despite the decline in Widows’ revenues, there’s no doubt about Microsoft’s determination to drive the PC upgrade cycle through the retirement of Windows XP as Turner explained.

    We have a giant XP install base. But guess what? We’ve made so much progress on that XP install base. It’s down to 21 percent worldwide, and we have plans to get that number to 13 percent by April when the end-of-life of XP happens.

    A big part of the change is the shift to the cloud with Turner claiming two hundred percent growth in Microsoft’s Azure services.

    Despite the change in Microsoft’s focus, the threats remain with Apple releasing both iOS7 and their new range of iPhones along with Google making their QuickOffice mobile app free to iOS and Android users.

    While Microsoft are steering their ship around, the incumbents in other sectors are protecting their positions. In an evolving world, survival is not guaranteed.

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  • Fashion’s move to digital commerce

    Fashion’s move to digital commerce

    How does 3D design change the fashion industry? Susan Olivier of Dassault Systemes sees ‘digital commerce’ driving fundamental changes to fashion and retail businesses.

    For slower retailers and fashion houses, this move to digital commerce threatens their very existence.

    ‘Digital commerce’ is more than just e-commerce in the view of Olivier, Vice President of Consumer Goods and Retail of the French 3D design software house, it’s a bringing together of technologies that alter the relationship between customers, retailers and designers along with the manufacturing and logistics companies that bring the products to market.

    Retail’s two big challenges

    Olivier sees the two biggest challenges to the retail industry as being the 2009 downturn of the global economy and the rise of the connected consumer.

    The downturn forced manufacturers and retailers to examine their supply chains, product design and manufacturing to squeeze out inefficiencies along with understanding consumer sentiment better.

    Designing for inner beauty

    “They found they could work differently with suppliers, how do I design for cost?” Asks Olivier, “how do I work on designing for what we call for ‘inner beauty’ and maybe change the inner design to take out costs without hurting performance or visual performance?” Olivier asked.

    “Those brands who survived are those who learned to do both things very well – work better with consumers and work better with their supplier base.”

    Who has the power?

    “Consumers on the other hand found ‘we have the power’ coming out of the down global economy,” says Olivier. “When consumers buy on price then brand loyalty gets strained.”

    The connected consumer also adds further risks for retailers as customers are now better informed than ever before.

    “If retailers aren’t careful, she knows more about the product than the poor staff on the floor does and she knows which stores have it in inventory than the poor staff on the floor does.”

    Bringing together the digital continuum

    One of Olivier’s areas of expertise is in Product Lifecycle Management (PLM) – planning the design, manufacturing, marketing and retirement of various products.

    A notable feature of modern the modern consumer goods industry is the compressed life cycle of products, “it used to be a life cycle was 18 months,” says Olivier. “The goal was to get it below 12 months, for many brands it’s now 12 weeks.”

    A scenario Olivier gives is the design process where a rapid virtual prototype can be shared across manufacturers, store managers and focus group.

    “I can create models in 3D and look at different options,” says Olivier. “How’s the outsoul of this shoe going to perform with this upper? Is it comfortable if I make changes? I might send a sample to a 3D printer before I make the mould.”

    “I can share it with my visual display teams and my store managers and I can share it before I commit to production and get feedback from my stores and I can share it with my consumer focus groups. ”

    “Now I have the power to do that weeks or months in advance before having to put the knife to the goods.” States Olivier, “that’s a completely different way of connecting the way companies think about product, bring it to life and bring it to market.”

    “Those are the kinds of things we’re enabling when I talk about bringing together the different points of the digital continuum.”

    “Now I’m in store I want to take the same images to educate my sales staff. I want them to take a tablet device and show the consumer what is in inventory, not just in this store, and I can have it shipped to their home within 24 hours.”

    “So that’s why I’m saying ‘digital commerce’,” says Olivier. “It could be online, it could be a kiosk in the store, it could be an iPad the sales assistant has in front of them.”

    Susan Olivier’s digital commerce model is the present day reality of retail – today’s merchant has to be across consumers’ sentiment along with working closely with suppliers to get products to get products to the customer quickly. The old ways of selling goods, particularly fashion, are over.

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  • Farewell to the knowledge economy

    Farewell to the knowledge economy

    One of the mantras of the 1980s was the future of western nations lay in becoming ‘knowledge economies’, unfortunately things don’t look like they are turning out that way.

    As the developed economies moved their manufacturing offshore – first to Japan and Korea, then Mexico and finally China – the promise to displaced Western factory workers was the replacement jobs would be in vaguely knowledge based industries like call centres and backoffice computer work.

    From the 1990s on, those jobs also started to go overseas  to lower cost centres in India, the Phillipines and other countries.

    When the internet became ubiquitous in the developed world in the late 1990s, the creative industries – musicians, artists and writers – found income dried up as their work became commoditised by digital distribution channels.

    Now the professions are being affected by combination of offshoring, artificial intelligence and automated processes. Many of the jobs that were done by highly paid accountants and lawyers can now be done by computers or in places not dissimilar to those that took away the call centre jobs twenty years ago.

    So it turns out the knowledge economy isn’t the key to riches after all and the future turns out to be more complex than what we thought in the 1990s.

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  • Bringing social networking to life

    Bringing social networking to life

    One of the highlights of the 2013 Australian Microsoft TechEd was a startup panel featuring local startups CoOpRating, Project Tripod and Nubis.

    All three startups are interesting projects and Nubis in particular illustrated how various internet and smartphone technologies which are coming together.

    Nubis is an Augmented Reality platform that projects social media onto the viewer of a smartphone’s camera. By pointing the camera at someone, the idea is a user can bring up details about a person.

    “We’re bringing social networking to life,” says founder Uzi Bar-On.

    As part of their Alphega project, Nubis has teamed with Glass Up, an Italian startup attempting to create a Google Glass competitor, the aim is to create a wearable computer that feeds social media information to the wearer.

    While it’s not clear what the benefits will be of that – or whether Glass Up, Nubis or Alphega will be successful – the project is interesting as it brings together Augmented Reality, geolocation, wearable technologies and social media.

    Over the next few years we’ll be seeing more products like Alphega tying together different technologies and using the Internet of Everything to talk to each other.

    It’s these sort of projects that will show us how our businesses and lives are going to change over the next decade as smart people figure out the ways to mash together these technologies.

    Paul travelled to Microsoft TechEd 2013 courtesy of Microsoft Australia

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