Special Seminar May 25, 1995 

Present Shock�s Emerging Opportunities

A talk prepared especially for:
The Graduate Program in Advanced Manufacturing
The University of California, San Diego
James E. Cook

Visiting Lecturer

 Contents 2 of 25 

 Present Shock's Opportunities 3 of 25 


 Toffler�s Challenge 4 of 25 

Disposable Products


From Barbie dolls to soda bottles, cameras, tooth brushes and towels.


Overwhelming Choices


Mind boggling menus, overflowing racks of clothes, and even more (possible) models than cars.


Rootless Society


Malls in the country and abandonment of inner cities, all for upward mobility.


Frantic Lifestyles


Fast food, few friends, at least two jobs per family, and less time for kids.


 Our Response 5 of 25 


Recyclable Products


instead of


Disposable Products


Consumer Designs


instead of


Overwhelming Choices


Permanent Community


instead of


Rootless Society


Self-paced Living


instead of


Frantic Lifestyles

  Uncertain Future
  Wealth Distribution
  Reality Crisis

 Our Opportunity 6 of 25 


Permanent Communities


enabled by


Telecommunting and its enablers, the Internet and Personal Computers.


Self-Paced Living


enabled by


Self-paced working/ buying/ paying/ planning/ corresponding/ and playing at and near the home thanks to Cellular Phones, Portable Computers, and "Valet Knowbots."


Recyclable Products


enabled by


Systematic collection and processing, and a "life cycle" design mentality encompassing new products, materials and natural resources.


Consumer Designs


enabled by


"Outlet Factories" which rapidly construct and assemble custom designs for a lower cost thanks to CAD/CAM, Virtual Reality, and "Preference Knowbots."


 Designs vs. Guesses 7 of 25 


 Outlet Factories? 8 of 25 

  Consumer Designs   instead of

Producers� Guesses  
  Resulting in   the elimination of:

Product Hunting,  
  Compromise Buying,  
  Salesperson Friction,  
  Inventory Write-Offs,  
  Distribution Middlemen,  
  Coordination Costs, and  
  Wasted Material, Fuel, Space and Labor
It requires that Consumers ,   one by one ,   Activate Production !

 Consumer Activated Production - Examples 9 of 25 

      It's already happening whenever you:  

l   Order a pizza or drive up to a fast food restaurant  

l   Go to Lenscrafters for custom eye glasses  

l   Customize a "Sentiment Card" or "Child�s Storybook"  

l   Call 1-800-FLOWERS for a bouquet delivery  

l   Match paint to a patch or make a door key  
    l   Get pictures printed in an hour right at the store  
  Note:        At the same cost as Producer Driven Products, you will always get:

what you want ,   when you want ,   where you want !

 Consumer Activated Production - Satisfaction 10 of 25 

  Producer Driven Production (what you�re accustomed to today)  
    occurs with limited variety and high uncertainty (of  
    having on-hand what you, the consumer, wants).


  Consumer Activated Production occurs with unlimited,  
    but bounded, variety and high certainty (of delivering
    what you want, when you want it, to where you want it).


 Consumer Activated Production - Enabling 11 of 25 

      It's enabled by:  

l   Well managed expectations  

l   Robotic selection and  experiencing  aids  

l   Very versatile materials  

l   Very modular parts  

l   Rapid assembly designs  
    l   Rapid assemblying machines (and tools)  
Coincidentally, this is where the opportunity is!

 Paradigms in Retailing 12 of 25 


 Value Adding in Paradigms 13 of 25 

Traditional: Producer Driven Production (PDP)

Extracting ® Refining ® Producing ® Assembling ® Distributing �® Retailing ® Consuming  
% abs. value: 10   15   25   50   60   90   100
% value added:   +5   +10   +25   +10   +30   +10  

Future: Consumer Activated Production (CAP)

Extracting ® Refining ® Producing ® Assembling �  �  �   �  �  � ® E-tailing ® Consuming  
% abs. value: 10   15   25   95   100
% value added:   +5   +10   +70   +5  

    Note: The numbers shown are pro forma percentages of the "manufacturer�s suggested retail price."

 Evolution of the Value Chain 14 of 25 

  "Mass Merchandising" (1950-1980)
Extracting ® Refining ® Producing ® Assembling ® Distributing ® Retailing ® Consuming Ø 
  I n d e p e n d e n t    |
  Dumping  ¿ 

  "Discount Merchandising" (1970-2000)
Extracting ® Refining ® Producing ® Assembling �® Distributing ® Retailing ® Consuming Ø 
  C o o r d i n a t e d   a la  WalMart    |
  Dumping  ¿ 

  "Factory Outlet" (1990-2020)
Extracting ® Refining ® Producing �® Assembling ®  "PUSH FORWARD"  ® Retailing ® Consuming Ø 
  I n t e g r a t e d   a la  L. L. Bean    |
  Dumping  ¿ 

  "Outlet Factory" (2010-204?)
Extracting ® Refining ® Producing �® Assembling «   " RESONATE "   « E-tailing « Consuming Ø 
     ↑� ↑� ↑   C y b e r n a t e d   a la  Amazon    |
     ↑� ↑ ↑   ¾    ¾   ¾   ¾    ¾   ¾   ¾    ¾   ¾   ¾    ¾   ¾   ¾    ¾   ¾   ¾    ¾   ¾   ¾ Recycling  ¿ 

  "Community Factory" (203?-20??)
Harvesting �® Refining ® Producing    " P U L L "    E-trolling « Consuming ® Assembling  Ø 
  � � � ↑� ↑� ↑ O r g a n a t e d   a la  Craigslist        ↑� ↑ ↑   ¾    �   ¾      ↑     ↑  |
     ↑� ↑� ↑   ¾   ¾   ¾   ¾ �  "PUSH BACK"  �  Recycling Redistributing   ¿

 Locus of the Value Adding 15 of 25 


  "Mass Merchandising" (1950-1980)   Paradigm: Independent   Exemplar: "Main Street"
Extractor ® Refiner ® Producer ® Assembler ® Distributor ® Retailer ® Consumer Ø 


  "Discount Merchandising" (1970-2000)   Paradigm: Coordinated   Exemplar: WalMart
Extractor ® Refiner ® Producer ® Assembler ® Distributor ® Retailer ® Consumer Ø 


  "Factory Outlet" (1990-2020)   Paradigm: Integrated   Exemplar: L. L. Bean
Extractor ® Refiner ® Producer �® Assembler ®  "PUSH FORWARD"  ® Retailer ® Consumer Ø 

  "Outlet Factory" (2010-204?)   Paradigm: Cybernated   Exemplar: Amazon
Extractor ® Refiner ® Producer Assembler «   " RESONATE "   « E-tailer « Consumer Ø 


  "Community Factory" (203?-20??)   Paradigm: Organated   Exemplar: Craigslist, Open Source Ecology
Harvester ® Refiner �® Producer    " P U L L "     E-troller Consumer ® Assembler Ø 

 Economics & Diffusion 16 of 25 


 The Defining Economics 17 of 25 
Traditional: Producer Driven Production (PDP)
  PDP WASTE = Retail and Distribution losses due to:
        obsolete, stolen, discounted, damaged, and carrying inventory plus
transportation, packaging, acquisition, and coordination costs plus
collateral "traffic" losses and the differential costs of salespersons.
    +     Assembly and Producer losses due to:

    transition, quantization, and coordination costs
    +     Consumer losses due to:

    hunting, compromising, and salesperson induced costs.
Future: Consumer Activated Production (CAP)
  CAP WASTE = Retail losses due to:
        idle assembly equipment and workers plus the differential costs
of labor and assembly space, and the sales rate limiting of customizing.

When PDP WASTE exceeds CAP WASTE ,  then do CAP ,  IF you have the WILL ...

 The Diffusion Dynamics 18 of 25 

 The Growth Picture 19 of 25 

 The Technological Opportunities 20 of 25 


 The Technological Challenges 21 of 25 

    CAP requires Designs AND Simulations of:
  Esthetically Delightful Products in "Real (and Virtual) World" Contexts

composed of:
  Very Versatile Materials, and

Highly Mix-and-Matchable Modules
  poised for:
  Rapid Assembly (in minutes) of Exactly What the Consumer Wants!

It's a return to the habitat of the 1950s with "Green" thrown in for good measure!

 The Computer Sciences Opportunities 22 of 25 

Design Software (CAD) to "invent" products and modules,

Engineering Software (CAE) to test products and design materials,

Manufacturing Software (CAM) to make the modules,

Animation Software to assemble and simulate products in contexts, and

"Knowbots" Software (AI) to guide selection of preferences.

 The Material Sciences Opportunities 23 of 25 

Designer materials  (alloys, polymers, dyes, ... ) which are:

Versatile  (in strength, texture, color, ... ),

Reversible  (in color, form, composition, ... ),

Separable  (into constituents, fractions, ... ),

Concentratable  (by extraction of a commodity ... ), and

Energy efficient  during recycling.

 The Mechanical Design Opportunities 24 of 25 

Modules  Modules which are:


Machine and Manually assemblyable  (rapidly, robotically and foolproof),

Adaptable  (to a wide range of contexts), and

Esthetically pleasing 

 The End 25 of 25 

Thank you!

Please, take this thought originated by Eden Phillpotts (1862-1960) with you:

"The universe is full of magical things patiently waiting for our wits to grow sharper."

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