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Manufacturing Technology Committee
Chandler, Arizona Facility

2005 A: The Net Rush

The Internet boom lasts and lasts; the quick and nimble create vast wealth from primarily virtual assets

Structure of Commerce

• Exponential increases in processing, storage, networks, information connectivity, education, and knowledge drive enormous wealth creation
• We have not reached limits to this boom that feeds on virtual resources; it is a sustained, great expansion of historic proportions
• Network economics drive major changes in business strategy: incremental cost to serve new customer is zero; value increases as square of network size
• New companies born of the digital age dominate the new economy; first movers retain an advantage as new opportunities keep expanding
• Incumbents invest heavily in digital age startups
  • If they buy a startup, they don't assimilate them
  • If an e-business is created inside, they isolate it and eventually spin it off
• Old company cores shrink slowly
• There are many "startup generators" that pump out a steady stream of digital age wealth creators
• Build-to-order manufacturing is increasingly common as everyone expects fulfillment of custom orders very quickly

Business Architecture

• Business leaders must manage to market cap: top-line not bottom-line focus; develop the perception of momentum; strategy in motion-strategy is revisited every quarter and decisions are made quickly
• Competition is based more on the future than the present; competition is like a virtual hockey game in which everyone is skating toward a constantly moving puck
• Speed is essential: move in big chunks
  • Rely on the infrastructure of others
  • Drive very fast product/service development
  • Dispose often and quickly of prior-year systems and products
  • Optimize everything for speed, agility, growth
• Build capacity and volume, even if you have to sustain large losses
• New digital age high flyers attract the best and the brightest; serious brain drain from incumbents accelerates their demise
• Managing virtual assets and information flows brings far greater returns than managing physical assets and cash flows
• Goal-focused culture: leaders are dreamers who can hit the numbers

Enablers

• Rapid feedback on markets, channels, campaigns, product/service usage, and quality drives development
• Venture markets expand rapidly outside the US
• Information and knowledge management systems accelerate learning, training, and decision making
• Legal and financial frameworks are now able to cope with digital age instruments and risks
• Basic technologies have continued to increase in performance exponentially