Industrial Game Changers in the Sociosphere

Jan. 9, 2012
New Organizational Structures Based on Self-Organizing Communities Are Emerging to Complement Traditional Hierarchies
About the Author
Dirk Schaefer is on the faculty of the George W. Woodruff School of Mechanical Engineering, Georgia Institute of Technology, in Atlanta. Contact him at [email protected].
By Dirk Schaefer

With continuing globalization, product development is becoming not only increasingly complex and dynamic, but also significantly more competitive. New product development paradigms and associated competencies required to compete are emerging at a mind-boggling rate.

Complex social networks have formed over the Internet through blogs, discussion boards, wikis, and networks such as Facebook, LinkedIn, YouTube and more. Individuals who have never met in person collaborate on the development of complex products and services.

New organizational structures based on self-organizing communities are emerging to complement traditional hierarchies. I'll briefly outline some of these game changers, and hope to elaborate on some of these points later in the year.

Open Innovation

Crowd sourcing moves tasks traditionally performed by specific individuals to a community through an open call. The idea is that it attracts those who are most fit to perform tasks or solve problems, and provide fresh and innovative ideas. It can tap a significantly higher talent pool than any one company is likely to have. Procter & Gamble, for example, created its own platform years ago for crowd sourcing called Connect + Develop.

Closely related to crowd sourcing is mass collaboration. Here, the idea is to harness the intelligence and ideas of many to find innovative solutions to complex problems. Online encyclopedia Wikipedia is one of the most prominent examples, but there are many other examples of projects related to the development of real world products.

Both crowd sourcing and mass collaboration foster "open innovation," a term coined by UC Berkeley's Henry Chesbrough. According to his definition, open innovation is "a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market." The central idea is that companies cannot afford to rely entirely on their own research. Likewise, internal inventions not being used should be taken outside the company.

Crowd sourcing, mass collaboration and open innovation might be appealing, but there are two major issues that make companies shy away from them: intellectual property, which can be tricky waters to navigate, and a lack of new business models. Although people might agree that putting together an online encyclopedia in a share-to-gain fashion is a neat thing to do, designing and manufacturing equipment, for example, in this way is not quite so straightforward—at least not yet.

Cloud Computing

Myriad software packages are available to facilitate all sorts of online collaboration, both for professional and personal purposes. They range from simple video communication tools such as Skype to more complex collaboration suites such as Wiggio, up to full-blown product design solutions, such as Dassault Systèmes' Catia V6 in concert with its cloud-based collaboration platform swYm.

Cloud computing, originally conceptualized in the 1960s, is a fancy marketing term for networked computers that provide services (or resources) through the Internet to a network of clients who use them. The three most prominent cloud computing application areas are software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS). Clouds can be public, private or a hybrid of the two.

Recently, cloud computing has been used for computer-aided product development. In addition to running CAD systems as a service in the cloud, other business-related, everything-as-a-service models have started to emerge. One such model relates to manufacturing, and aims at using physical resources—such as 3D printers for additive manufacturing, mills, lathes, and other manufacturing-related equipment—through the cloud. Long-term, computer-aided product development is expected to become predominantly cloud-based. It is a promising new model to facilitate globally distributed design and manufacture processes.