Why Production has levelled the Playing Field

This commoditisation of quality is the result from a democratisation of production tools.

Whereas developing and manufacturing products that meet our quality requirements used to be rocket science, today, some products can be assembled like an Ikea Billy shelf.

Why?

Resources as a Service

First, entry barriers have been taken down across many areas. Optimized factories and supply chains are now available even to smaller companies. What had to be built up in-house in the past is now available as a service.

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Virtual Plants

Foxconn and the likes enable companies to source high-quality components without operating sophisticated plants. With lower capital requirements the playing field is not reserved to the big guys any more

Virtual IT Resources

Each of these suppliers or service providers is a specialist in its field. Each of them has optimised its operations. Through the magic of specialisation they can provide the most efficient services, much more cost efficiently than a fully integrated super tanker.

Startups  can access these  services and focus on those functions that provide them an edge in their business. If they have to realign their offering, then they are much quicker to do so.

Outsourcing and resources as service eliminates traditional entry barriers and competitive advantages.

Peak Efficiency

In addition, higher quality at affordable cost was driven by efficiencies in production. But there is a limit to how efficient we can become. True, there is always room for improvement. But then, is this still what really sets the company apart? And if it’s a head to head race for the last piece, is that an attractive industry to be in?

These are just some of the patterns. But they help us see the bigger shifts, and they help us see why new success factors, like the one we explored earlier have gained in importance.
If you want to have a feel for what is changing in an industry, keep looking at what type of people they are hiring. Of course, you can also look at their press releases. But the recruiting site is where they are most honest, this is where the work gets done.

This is the end of our short history lesson. The next part will take us back into the present day. We will see some of the main drivers of success of today’s businesses.