The Future in 3-D

A conversation with Richard D'Aveni, the Bakala Professor of Strategy.

Tuck alums might remember his bringing Sun Tzu, von Clausewitz, and Mao Tse-Tung into the classroom and his use of The Godfather as a tool to illustrate different approaches to strategic thinking. Currently, as part of his Advanced Competitive Strategy elective, D'Aveni brings in CEOs from differing industries to talk strategy from today's front lines. Why the mix? A Financial Times quote featured on his web page perhaps best encapsulates his teaching goal: "Once executives realize there are no set rules, they might be more willing to discard conventional ways of thinking." Now he sees a new, unconventional future—one whose linchpin is 3-D printing.

You’re working on a new book, based on your current research—can you tell us a bit about that research?

My current research is about how strategy and the economy will change with the advent of 3-D printing and industrial platforms that are being used to coordinate 3-D printing with the supply chain and ecosystem.

What made you focus on 3-D printing?

Three moments really enlightened me. The first was when I went to Barcelona to visit HP Inc. and saw what they could do with their MJF [Multi Jet Fusion] printing system: for example, a bar that sprays out 350 million dots of plastic per second per square inch. The next happened when I visited the Jabil Blue Sky Center in San Jose, California. They showed me a giant electronic screen that displayed how their entire supply-chain system worked: literally the entire company’s workflow and supply chain and supplier assessments on several dimensions, all instantly up on a huge wall. I thought, ‘Oh my gosh, it’s Skynet.’ And a third was my visit to Desktop Metal, in Burlington, Massachusetts. They are doing for metal 3-D printing what HP Inc. is doing for plastics. The methodology was slightly different but included something that sped up metal production by a hundredfold.

How did what those three companies do come together for you?

Between the technology that HP Inc. and Desktop Metal have and the incredible experience in manufacturing that Jabil has—it’s the third largest contract manufacturer in the world—you can see an entirely new world developing. Whereas traditional manufacturing would result in a product comprised of thousands of parts, 3-D printing can combine parts into a single complex part that couldn’t be made by traditional methods. So assembly may involve only 50 complex parts, rather than thousands, hence reducing labor costs.  The 3-D printing industry is working toward printing an entirely integrated, customizable product of just one part. And this is just the beginning: there are now printers capable of mass production of standardized parts and products at costs lower than conventional manufacturing, and others that can work at the atomic level, printing one atom at a time. It’s like a science-fiction movie.

How do you see this changing the economy?

In my forthcoming book, I’m predicting that 3-D printing and industrial platforms will enable very large, highly diversified companies that are much more widely diversified than conglomerates and that have operational synergies—which conglomerates, by definition, don’t have. These megaliths will take control of a significant portion of the economy. Hence the title, The Pan-Industrial Revolution: How New Manufacturing Titans Will Transform the World. Coupled together with software platforms, 3-D printing is going to allow both scale and scope, with no trade-off anymore between the two. A platform owner will be capable of offering all kinds of services—manufacturing software, additive-manufacturing services, as well as financing and data not available to the public—to members of wide collectives.
This will mean the rise of firms I call pan-industrials. These pan-industrials will use 3-D printing to blur product boundaries. And as the boundaries between products start to disappear, so too will industries disappear.

Will these pan-industrials develop their own platforms?

Some already are. General Electric is developing its own with Predix, Jabil is al-ready controlling its own manufacturing processes with its platform, and Siemens is developing its own additive manufacturing platform, Siemens NX. IBM Watson also has something called the Industrial Inter-net of Things platform. This is laden with artificial intelligence, but they don’t have the manufacturing knowledge that a GE or Jabil or Siemens has. My prediction is that the software houses are not going to win unless they have some way of bringing in tremendous manufacturing knowledge.

You’ve written elsewhere* that companies in this pan-industrial future will be organizing more around geography. Why is that?

With 3-D printing, you can get low cost without economies of scale, through reduced waste and because the cost of the 3-D printing equipment is much less than that in traditional manufacturing. And the low capital intensity of 3-D printing, combined with having everything monitored by a central platform around the world, will mean companies can have micro- or mini-factories in locations they couldn’t serve before, which also lowers shipping costs. And people will not only be able to produce something locally,  they will be able to modify the product for local needs.

How is all this changing the world of MBAs?

We’re at the same moment in time now as when the Tuck School started in 1900. And why did we need a Tuck School then? Because an agrarian economy was becoming an industrial economy. The same three things that came about at the beginning of the 20th century—industrial and transportation and communications changes—are going through radical revolution right now. And we have a tremendous opportunity to prepare MBAs for this future world of technology.

You’ve brought some of this into your Advanced Competitive Strategy elective, which is quite popular.

Much of what is touched on in strategy is economics based, but I’m teaching students that strategy can also be an art form. You make a move, I make a move; you make a countermove, I make a countermove. And through that dynamism, you end up breaking the rules of economic-based strategy. The purpose of my course is to develop students’ minds for strategic flexibility and different kinds of strategic thinking. The goal is to differentiate them from other MBAs. But the course is controversial, because I make students get outside the box, and I often take a perspective opposite to others.

And in the business world, they’re going to meet a lot of disruptive people.

That’s right. Look at the people who are founding today’s breakthrough companies. For the new paradigm, it’s going to take people who don’t fit the old norms.

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* Richard D’Aveni, “Choosing Scope Over Focus,” MIT Sloan Management Review, Summer 2017 (volume 58, issue 4)
Richard D’Aveni, “The 3-D Revolution,” Harvard Business Review, May 2015

*This article originally appeared in print in the winter 2018 issue of Tuck Today magazine.