Manufacturing has traditionally been dominated by big businesses with plenty of cash. Manufacturers would only take large production orders and give price breaks to those who could afford to pay the most. There has been no way for small businesses to compete.
Since recently, this is no longer the case. Digitization and robotics are beginning to create a level playing field, giving small businesses and entrepreneurs access to manufacturing resources. They can now evaluate potential manufacturers and suppliers with a simple online search. After selecting a supplier, small businesses can also customize their products to different market segments.
Factors That Make Small Business Manufacturing Possible
Small businesses previously had to pool their resources together to create production orders large enough for manufacturers to even accept them. Now, with additive manufacturing, IoT, and blockchain technology along with automation, small businesses can independently manufacture their own products through their own supply chains.
Certain products can be made using additive manufacturing, also known as 3D printing. Additive manufacturing is less costly than subtractive manufacturing, where materials get cut or molded into individual parts, which are then used to construct the final product. Once entrepreneurs digitize their product ideas, they can order them to be 3D printed using raw materials on a small budget.
With smart factories using cloud-networked sensors, artificial intelligence, IoT, vision systems and GPS, robots have replaced manual labor. With the only costs going towards R&D and maintenance, smart manufacturing has gotten much cheaper. These cost savings allow small businesses to join the manufacturing ecosystem and quickly fulfill orders for their customers.
In addition to 3D printing and automation, blockchain technology offers many advantages to both manufacturers and entrepreneurs. Manufacturers benefit from reliable execution of production orders using standardized protocols and automated processes using smart contracts. Small businesses no longer need a trusted intermediary to transfer their digital assets between manufacturers and suppliers. Therefore, they can enjoy lower barriers to entry and faster to-market times.
How This Could Play Out
Tom is an entrepreneur who has a fantastic idea for a product, which is already in demand. Now he needs to manufacture his product in order to make sales.
Before Industry 4.0, Tom would have to search for and evaluate potential suppliers. When he needs to construct his own supply chain, he also has to negotiate contracts with individual suppliers and manufacturers. Even if he could successfully convince a manufacturer to accept his order, he still has to keep track of everything and stay on top of every component of his supply chain.
That’s a lot of work for a small business entrepreneur. He may not be able to afford it. He also fears that someone else may steal his idea—and his market.
Enter digitization, automation, and blockchain technology.
Now, Tom can upload his digital product idea to secure cloud storage or a smart contract. One function of a smart contract is to secure Tom’s ownership of the product idea or digital asset, preventing intellectual property theft.
Additionally, Tom now has a plethora of manufacturing options on a highly transparent blockchain-based production network. He can choose one based on ratings, price, location, social standards, and CO2 footprint. Once he decides on a manufacturer, Tom can execute a smart contract to automate production. Now he can launch his product and fulfill orders as quickly and affordably as ever.