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Overview of MIT's Production in the Innovation Economy (PIE) Initiative

Prof. Olivier de Weckdeweck@mit.edu

October 27, 20116th Annual LMP Manufacturing Summit

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Presentation Outline• Personal Observations on Manufacturing• MIT Production in the Innovation Economy

(PIE) Study – Overview– 1: Scan of Advanced Manufacturing Technologies– 2: Early Production Decisions in Startup Firms

• Discussion

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Personal Observations on Manufacturing1. Superplastic Forming

versus High-Speed Machining

2. Swiss F/A-18 Program Experience

3. Flexibility in Component Manufacturing

Understanding Cost Drivers

Globalization and Supply Chains

Product Families and PlatformsVariety and Intermediate Volumes

Hauser D., de Weck O.L., “Flexibility in component manufacturing systems: evaluation framework and case study”, Journal of Intelligent Manufacturing, 18 (3), 421-432, June 2007

Top 15 Countries in Manufacturing

Production in the Innovation Economy

In 2010 China and US traded places

What future for manufacturing in the U.S.?

• Productivity drives it down the road that agriculture has already taken• Labor costs (and other costs) drive it to Asia• The example of other advanced industrial countries (Germany, Japan ...)• Do new industries (e.g. clean-tech, smart medical devices) require closer

integration of R&D, production and operations?• Will the finance model for IT (VCs) work for these new industries?• Do we have the skills and productive capabilities needed for these new

industries in the U.S.?• Why should we care?

Production in the Innovation Economy

PIE Overview

• MIT’s President Susan Hockfield initiates the project in late 2010• Model: Made in America Study (1986-1989)

– The MIT Commission on Industrial Productivity• PIE is asking: How can the U.S. create more value from innovation?• Three Phase Study; Interim Report, Spring 2012• $3M budget mainly foundations (CCNY, Kauffman) and gifts• Co-Chairs: Suzanne Berger, Phillip Sharp; Olivier de Weck, Exec.

Director; 18 leading MIT faculty and the head of the MIT Corp.• Cross Disciplinary: engineering, science, economics, political

science, management, biology

Production in the Innovation Economy

Innovation

EconomyProductionServices

manufacturing-related services non-manufacturing

services

job growth

Income distribution

scale-up / scale-down challenge

capital, labor, skills

R&D investment Government Policy

Regional clusters

Entrepreneurshiplabor relations

PIE Study Architecture

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1 3

4

5 6

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X Study Module

Innovation Economy

job growth

Income distribution

Regional clusters

Entrepreneurshiplabor relations

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Module 1: Internal Scan at MIT (Summer 2011)

Electro sprayThrusters (Lozano, AA)

20 labs interviewed

Continuous Manufacturing ofPharmaceuticals (B. Trout, ChemE)

Nanophosphate Li-Ion Batteries( YM Chiang, DMSE)

Mix of Product and Process Innovations

Layer-by-LayerAssy of Bio-materials (R. Cohen, ChemE)

MEMS CompliantActuators (Culpepper, LMP)

Nano-engineered Surfaces(K. Varanasi, MechE)

Nano-spinning of polymers(G. Rutledge, ChemE)

Continuous Flow Batteries (YMC) Liquid Metal Batteries(Don Sadoway, DMSE)

Silicon-Ribbon PV cells

Organic Photovoltaic's(Bulovic/Gleason) EECS,

Rodney BrooksCSAIL – Humanoid Robotics

RFID-technology Auto-ID

Sarma (MechE), Williams(CEE,ESD)

Robotics for Composite Layup (J. Shah, AA)

Alumnimum Recycling under comp. uncertaintyJ. Clark, R. Kirchain (MSL)

Nano-materialsBio-manufacturingPharmaceuticalsBatteriesRoboticsSolar/SustainableSupply Chains

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Initial Trends from MIT and U.S. University Scan

1. Development of new materials and surfaces at the micro- and nano-scale2. Reducing CAPEX requirements for manufacturing of high quality objects in small

batch sizes with high levels of “niche” customization3. Improving efficiency of existing manufacturing with less energy use and waste4. Increased use of smart automation during manufacturing, but also advanced

robots as a product5. Enabling technologies that might create new manufacturing ecosystems (ion

thrusters, grid storage, thin film solar cells)6. New differentiators for success besides cost are customization, design, and

service7. Role of the internet in creating an open eco-system for design, example:

(http://www.mfg.com)

Jonté Craighead (UROP) conducted a web-survey of other U.S. Universities

Too much happening at MIT to be complete – will conduct a campus wide survey (similar to MITEI) to elicit from the bottom-up who is doing what related to adv. manufacturing

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TraditionalManufacturing(20th century)

raw materialsfrom nature

parts finishedproductsFabrication Assembly

AdvancedManufacturing(21th century)

raw materialsfrom nature

parts finishedproductsFabrication Assembly

MaterialDesign

syntheticmaterials

Bundling Integratedsolutions

servicessoftware

continuous

Recyclingrecoveredmaterials

What is Advanced Manufacturing?

Advanced Manufacturing is the creation of integrated solutions that require the production of physical artifacts coupled with valued-added services and software, potentially exploiting custom-designed and recycled materials.

Module 2: Innovation Pathways to Production – Research Questions

• What are the strategic decisions made by entrepreneurial firms at as they move from invention/innovation to early production stages?

• For the initial set of production capabilities are these developed in-house, via a contracting or licensing relationship, or with a large strategic partner, e.g. in the form of a joint venture?

• What are the key factors shaping these decisions? • How stable are early production decisions typically? Do they

freeze downstream production configurations or are they often overturned as new opportunities arise?

• Data set of 228 MIT Startups between 1997-2010 (TLO)

Production in the Innovation Economy

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Pathways to Production• Initial guess at a decision tree/taxonomy

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Summary and Discussion• U.S. Manufacturing is critical to our future• Renewed interest in manufacturing at the national scale

(PCAST, AMP) and at MIT• MIT has launched the PIE Study as a major initiative

– Empirical study to establish better understanding of link between upstream innovation, manufacturing and global markets

– How do we impact “manufacturing” education in a positive way?• Expect initial recommendations in early 2012

http://web.mit.edu/pie

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Backup Charts

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Comparison of Advanced Manufacturing Technologies / Promising areas mentioned in recent mfg reports

PCAST (6/2011) IfM Cambridge UK (3/2011)

DARPA Mfg Prgms (9/2011)

NSF (+$ ACA, 12/2010)

U Mich /NSF WS (5/2010)

Nano-Scale* Carbon Materials

SustainableManufacturing

Advanced MfgPharmaceuticals

Advanced Materials Design

Re-Manufacturing (Recycling)

Flexible* Electronics

Bio- and Nano-enabled mfg

Mask-less Nano-Lithography

Nano-manufacturing

Scale-up and continuous mfg

Next generationOptoelectronics*

Modeling and Simulation

META- Design5 x speedup

Next-generationRobotics

Modeling & Simulation & LCC

Nano-enabled Medical Devices*

Rapid and responsive Mfg

Foundries forCyber-phys Sys.

Smart Building Technologies

Adv. Robotics /Smart Automation

Mfg and Aging (Japan)

“Full-Scale Rapid”Prototyping

Mfg for Anti-Piracy (Germany)

Conclusion: There is a lot of similarity amongst reports in terms of what research areas are considered to be important in advanced manufacturing, but what should be included in advanced manufacturing scope?

*PCAST mentions that these technologies are subject to potential “market failure”

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Typical profile of successful growth firm

Year1 5 10 15

# employees [FTE]

100

1,000

Revenue ($M)

maturation

Initial scale-up

negative cash-flow

plateau

Later scale-up