Personal Manufacturing - Business Models
Hod Lipson & Melba Kurman:
"Not all custom manufacturing is profitable and the majority of today’s personal fabrication makers do not make a substantial profit from their efforts. What factors would stand in the way of profitability for a small manufacturing business that makes custom objects for one or few customers?
When the economies of scale of mass production are removed, custom manufacturers will have to earn enough to compensate for the hidden costs of artisan-scale production.
New business models based on personal-scale manufacturing technologies will have to content with the following challenges:
- A requested custom object may be design-wise, too far outside the manufacturer’s
area of specialization. If a small manufacturer invests in a substantial learning curve, new materials and machine configuration, he would have to charge a high prices for the custom goods he produces. If the price is too high, consumers will switch back to mass produced objects or find a custom manufacturer who’s cheaper.
- When the customer receives her completed custom product, it may not be what
she had in mind. The product may not be worthwhile without an accompanying ecosystem or support infrastructure. The product’s performance may offer unwanted surprises.
- If a custom product turns out poorly or hurts somebody, it reflects badly on the
manufacturer. Legally, the manufacturer may be at risk.
- If a customer knowingly or unknowingly copies a copyrighted or patented design,
the manufacturer is unwittingly participating in an violation of intellectual property. Most small-scale manufacturers do not have the skill, time nor resources to do a comprehensive patent search before creating custom products.
- Unintentional IP violations since manufacturer likely won’t have the resources of
expertise to do a patent search before making a single, custom product
Some of these challenges could be alleviated if small-scale manufacturing companies formed a manufacturing collective to share costs and resources. Manufacturing coops could form around a particular industry or product (say a particular Boeing jet).
Each participating manufacturer would have a few personal-scale manufacturing machines in their shop and would specialize in their particular part.' (http://web.mae.cornell.edu/lipson/FactoryAtHome.pdf)