Jack Strauser’s relationship with the Chinese manufacturing industry is incredibly tense. Strauser, founder and CEO of Florida-based company Dok Solution, believes a Chinese factory stole his electronic charging station designs and then offered them to a U.S. distributor, who now sells them.
“I don’t have a million dollars to just throw around to defend my patent,” says Strauser. “I’ll spend every dime I have, but I have a lot of patents. It could financially ruin me.”
Strauser is currently preparing to take the U.S. distributor to trial for patent infringement, with the claim that its main factory in Shenzhen poached his designs. But he fears that his small company may not be able to fight back against his much larger opponent. It’s a David and Goliath story that, in many ways, reflects the greater mass production economy.
Reports about the faltering Chinese economy, the world’s leader in mass production, bring up questions over whether tectonic shifts are coming to transform the manufacturing sector. And given the sharp increase in global hardware startups since 2012, it remains to be seen if small businesses, like Strauser’s, have applied enough pressure yet on the manufacturing world to favor their interests. Rapid prototyping tools—namely desktop 3-D printers—have bolstered small businesses’ paths to market in recent years. While China’s manufacturing activity declines, is there an opportunity for 3-D printing to transform manufacturing even further?
“Digital printing is excellent, for me, to put my invention in a CAD design and have it made so I can get the samples. That’s where it saves money in the United States,” says Strauser, who has over 25 years of experience in manufacturing.
Strauser’s charging docks are good candidates for 3-D printing. Reduced to their components, his docks comprise a few pieces of plastic and some electronics. A 3-D printer could handle everything except the assembly and the electronic components—the resistors, capacitors, and inductors—which would need to be ordered separately, from China or elsewhere.
Yet Strauser’s production lines will remain firmly planted in Chinese factories. A 3-D printer wouldn’t be able to handle the volumes of plastic Strauser needs to meet his clients’ volume demands within an acceptable timeframe and with a good quality standard; his distributors ask for a 2,000-item minimum. Mass production, he says, is the only method that can accommodate that volume at a reasonable price point, so he’s staying in China for that, choosing to struggle to keep his business afloat in the sea of factories and companies there.
None of the companies we work with would accept the quality of products that comes off a 3-D printer.
For now, looks like the pace of change in the consumer electronics industry will be glacial erosion, rather than seismic. “There’s no device that you’re using today that can be 3-D printed to the standard you’re going to accept as the consumer,” says Liam Casey, founder and CEO of PCH International, a company that creates manufacturing and retail solutions for growing businesses. One of its main activities is linking its clients to manufacturers in China. “None of the companies we work with would accept the quality of products that comes off a 3-D printer.”
Outside of the prototyping phase, only certain industries, like medical and aerospace, have been able to derive value from 3-D printed products; they thrive on customized, one-off parts. Consumer electronics businesses, on the other hand, are confronting 3-D printing’s limits now that they are transitioning from prototyping and beginning to use the technology for on-demand production.
A Brooklyn startup called BotFactory sells a tool that enables inventors to produce printed circuit boards on demand. Though it doesn’t exclusively use 3-D printing, BotFactory’s on-demand production principle is the same: The inventor loads a design, and the system instantly starts making the product. First, a user loads her PCB design into a web-based form. Then, a machine prints the connections onto any flat surface with conductive ink. Finally, a robotic arm automatically places the electronic components into the appropriate spots on the board.
But BotFactory acknowledges that its system is only suitable for prototypes and low volumes; printing anything larger than 1,000 pieces in a reasonable amount of time would require several of BotFactory’s $2,999 machines working under human supervision. For many smaller companies, outsourcing to China for high-volume projects is worth the time and cost savings.
Proponents of the local manufacturing movement say that production trends are firmly pointed away from China’s mass production economy. Startups want to produce their products close to their designers, cut down on the amount of inventory they store, and reduce delivery times.
“It’s going to be on demand, it’s going to be local, distribution is going to be free, basically,” says Brian Garret, cofounder of 3D Hubs, a Dutch startup that connects people who want to 3-D print with local 3-D printers within its online network. In 2013, 3D Hubs’s network had just nine printers. This year, the network surpassed 22,000 printers, giving 1 billion people access to 3-D printers within 10 miles of their homes. It is the world’s largest network of 3-D printers.
Garret has his eyes set on upsetting global, commercial delivery times, aiming to attract companies with Asian manufacturing operations, like Nike and Ikea, as clients. Meanwhile, in February, Amazon filed a patent for delivery trucks that would be outfitted with 3-D printers, yet another move in the company’s quest to realize on-demand delivery perfection. But it’s not clear exactly when these projects will materialize.
A startup called CloudDDM built its 3-D printer farm within one of UPS’s logistics hubs in Louisville, Kentucky. Mitch Free, CloudDDM’s CEO, says he can print until 1:00 A.M. everyday and have parts sent to any client in the United States by 10:00 a.m. using UPS’s priority service. He now has 100 printers that run with little supervision.
No one wants to keep inventory; when they need more, they can just order more.
“We are doing low-volume production, creating high-quality parts, with high-grade thermoplastics,” Free says. Any high-volume orders are out of his capacity range, but he claims that’s not an issue; businesses want to stock fewer items on their shelves. “No one wants to keep inventory; when they need more they can just order more,” Free says.
While 3-D printing seems to be stalling in the consumer electronics industry, another technology is gaining traction: digital manufacturing. A central component for on-demand production, digital manufacturing uses the tools of big data, sensors, and communication technology to automate as much of the manufacturing process as possible.
This past May, the Chinese government announced its “Made in China 2025” plan, which would modernize its manufacturing sector with digital technology to compete with emerging trends in competing countries. Casey says that China’s manufacturing practices have already been evolving from the black box reputation it earned in the 1980s. The Chinese manufacturers that PCH International works with have made their production processes more transparent and are enthusiastic about supporting their clients’ brands and quality standards.
And digital manufacturing’s prevalence in the U.S. small business space is also growing. This year, Phoenix-based Local Motors 3-D printed an entire car chassis in just 44 hours, for its electric car, the Strati. Local Motors hopes to clear U.S. auto regulations in 2016 to produce the car for consumers at its expanding web of “microfactories,” hyperlocal spaces that integrate all of the aspects of design, manufacturing, and retail. Etsy, meanwhile, launched its Etsy Manufacturing business in September to match Etsy sellers to small manufacturers.
And Brooklyn’s Maker’s Row specializes in digital manufacturing to facilitate startups’ transition to the manufacturing phase. “You can develop your product online, you can pull a supply chain together online, and you can correspond with everyone,” says Matthew Burnett, Maker’s Row’s CEO and cofounder.
For now, Dok’s Strauser still goes to China five or six times per year. Lately, however, he has had trouble finding reliable factories to work with, witnessing firsthand how they are struggling to stay open, amid pressure to increase domestic wages and accommodate labor law changes. Over the years, he has moved from factory to factory, juggling three to four contractors at a time. If he had the money, he says, he would manufacture as much as he could in the United States. And 3-D printing wouldn’t be a part of the process.
This article was written by Tina Amirtha from Fast Company and was legally licensed through the NewsCred publisher network.