Lets take automobiles because it is an industry with high barriers to
entry.
Let us say there are 50,000 parts to a car which costs $4,000 in
materials and $4,000 in labor to manufacture. A new startup company
could use laser sintering to manufacture the metal parts and
Stereolithography to make all the rubberized parts, leaving cloth,
tires, and wiring to be bought from third parties. Let us also say that
one laser sintering station and one stereolithography machine could
produce the parts for a single car per day. It would therefore take 30
sets of machines to produce 10,000 cars per year. At a selling price of
$15,000 per car, $150,000,000 in revenue would be generated to produce
with $80 million in costs. The thirty sets of machines at $400,000
would cost $12,000,000. Compare this $12 million to maybe $50 million
in large presses and infrastructure that it took to previously make the
50,000 parts.
There is the difference. Only $12 million in capital equpiment needs to
be amortized versus $50 million. 10,000 cars would amortize the
manufacturing equipment at $1,200 per car versus $5,000 per car the old
way. Therefore smaller batches could be produced profitably. Regional
manufacturing versus national/global would become profitable.
Of course I have no idea how accurate any of these numbers are but you
get the idea. Lower capital equipment costs lowers the volume necessary
to amortize these costs.
Steve
Marshall Burns wrote:
> Steve, I agree with what you wrote today. In the glossary of some
> new writing I am working on, I have the following items, which are
> along the lines of what you were saying: Industrial
> revolution. The economic era arising from the harnessing of
> mechanical power. Characterized by centralized production,
> proliferation of wealth, and loss of individuality. Fabricator
> revolution. The economic era arising from the ability to give shape
> and structure to matter automatically. Characterized by distributed
> production, proliferation of wealth, and individual freedom.
> Therefore, the fabber revolution undoes the centralization and loss of
> individuality brought about by the industrial revolution, but it also
> continues and increases the proliferation of wealth started by the
> previous revolution. I am interested in your further comments.
>
> Best regards,
> Marshall Burns
> Marshall@Ennex
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