Saturday, March 28, 2009

Somebody agrees with The Phantom.

I'm fond of posting that with manufacturing machinery getting so small and so cheap, big factories are going to mostly disappear and little small ones making custom stuff all connected to the Internet are going to be the wave of the future.  I've said it many many times.

Here's a dude that agrees with me
This week's unveiling of the Nano automobile produced in India by the Tata Group is transportation's inflection point. Like Stephen Jobs, Raj Tata and his gigantic conglomerate have come up with a cost-effective game-changer that will flatten all rivals. Like Henry Ford, he has designed a product that the workers on the assembly line can afford to buy, thus creating a perpetual economic growth machine.

Most revolutionary, however, is the Nano business model. These vehicles will be sold from the factory door in local economies, not dealerships. Local manufacturing will reduce costs and enhance buzz, include local partners and help promote successful sales. 

The bottom line is that captive markets run by oligopolies -and cars made by people making $70 an hour -- are no longer sustainable economically.

The business model that will work for carmakers is the Dell Computer model. Vehicles must be sold online, the supply chain must be global and assembly plants used to put together all the components and options from colours to bumpers that buyers have selected digitally and fully paid for.

The auto industry will be customized manufacturing, which will eliminate the waste and expense of second-guessing market appetites, consumer biases or discounting and marketing expenses to move inventories.

There you have it folks. You want a 1969 Camaro with an aluminum engine block, a blower, zoomie pipes and 500 horesepower, send an e-mail.  They take Paypal.

The Phantom


Simone said...

It occurs to me that another benefit of local manufacturing is quality control. The customer is the next door neighbor and therefore can ensure that quality is good enough for his/her purposes and not so good that it becomes a burdonsome additional expense. As well, local manufacturing will likely mean quick and flexible adaptation to changing tastes including in quality.

The Phantom said...

Definitely, Simone. Also, thanks to the web, local opinion becomes world wide. Example, look up Maytag Neptune series front-load washing machines. Don't get one, they suck.

Really, its the same things blogs are doing to the mainstream media, but with stuff instead of reporting.