There is a revolution going on in hardware manufacturing, in some ways similar to the one that spawned the software developers of Silicon Valley. This one is based on a micro-factory concept that has its roots in a movement started by entrepreneur Eric Ries called 'lean start-up'.

The premise of lean start-up is not whether or not a product can be built, but rather whether it should be built. And micro-factories – small-scale operations that do not exceed desktop size and produce small-scale products – allow manufacturers to explore this option. The micro-factory concept was coined by Japan's Mechanical Engineer Laboratory (MEL) in 1990 and since has been driven by research institutes and universities around the world.

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GE Appliances has seized on this ideology and is creating its first micro-factory, FirstBuild, which could be the first significant factory of its kind in the world.

Opened in July 2014 in Louisville, Kentucky, FirstBuild is wholly owned by GE Appliances in partnership with open-source hardware innovator Local Motors. “That partnership is significant to FirstBuild,” says Kevin Nolan, GE vice-president of technology. “Jay Rogers, CEO of Local Motors, was the genesis for us doing this. Local Motors is more than a factory, it's also a design house.”

Pioneer partner

Local Motors, based in Phoenix, Arizona, is a trailblazer in the micro-factory concept and focuses on the automobile industry. The company operates a micro-factory in Knoxville, Tennessee, and a mobile factory (mobi-factory) that moves from place to place. In addition, it has a growing global network of micro-factories that are charged with designing and manufacturing concept automobiles and bicycles in small quantities. It describes its factories as places where innovators “create amazing products and consumers come to marvel and shop”. In fact, Local Motors recently created the world’s first 3D-printed car from its micro-factory in Knoxville.

The concept works well for GE Appliances. “GE is looking to innovate faster, drive lower cost developments, and get closer to consumers in terms of knowing what they like and don’t like,” says Mr Nolan. It also wants to scale down its R&D and build products that sell.

There are benefits to going to smaller scale. When a company launches a new product, it typically has to build 20,000 units. Risk can be high, especially if the product developed misses the mark on consumer needs and wants.

“That does not lead to much experimentation once the product has been launched and investment made in its manufacturing platform,” says Mr Nolan. “Micro-factories, on the other hand, allow for more tests and design changes, based on consumer input. We thought if we incorporated that with appliance development, we would have something powerful.”

The micro-factory concept is not the same as incubator space, which is often associated with universities and R&D centres and is focused on early-stage companies. “Generally, incubators involve an equity position,” says James Reddish, vice-president, economic and workforce development at Greater Louisville Inc. “Micro-factories are less programmatic and less formal. GE engineers work there on new concepts, but folks come off the street to innovate. The idea is for smart people of different educational backgrounds to run into each other organically and generate innovation.”

Where it’s at

FirstBuild’s Louisville location is critical. It is easily accessible to engineering and advanced manufacturing students and those who want to be part of a local network of people interested in innovation and design. Covering 3000 square metres, the space is tiny compared with that normally needed for appliance manufacturing. It has three distinct spaces: a coffee shop and gathering spot where users can share ideas, an area where staff can work on design and develop concepts, and a showroom where products can be sold.

Louisville offers the company numerous advantages. Mr Reddish points out that GE chose Louisville because its headquarters and Appliance Park are in the city. The company also recently chose to bring manufacturing activity back from China to Kentucky. “There’s a strong partnership with the University of Louisville engineering school,” he says. “The university promotes manufacturing, particularly innovation and engineering.”

Another advantage is that Louisville is involved in the makerspace movement via its LVL 1 Makership programme. Also known as 'hackerspaces', 'hackspaces' or 'fablabs', makerspaces are open community labs and workshops that are operated by communities comprising a whole host of digitally or scientifically minded people. Such design-it-yourself spaces are popping up around the US and are fostered by Maker Faire events that bring the participants together. “It’s a big movement where people make crazy things,” says Mr Nolan.

Independent of FirstBuild or Local Motors, the makerspaces facility in Louisville is open 24 hours a day, seven days a week. The concept was even honoured at the White House in June when president Barack Obama hosted the first ever White House Maker Faire. “What’s significant is these elements came together to make this a perfect storm for First Build in Louisville,” says Mr Reddish.  

Power to the people

The micro-factory’s collection of three-dimensional printers and advanced manufacturing equipment is available for high school students and hobbyist who want to work, learn and innovate. “It’s like creating an artist movement for techies,” says Mr Nolan. “The fact that people can sell what they create fuels the pump and encourages them to keep designing and building.”  

GE leases the space, and hopes to bring 12 new products out of the micro-factory, one which can be scaled up for mass production. Crucially, GE compensates contributors for their idea. “We are careful in that if someone adds intellectual property, they are compensated,” Mr Nolan stresses. Ideas that can be patented have a different value to design rendering. “If it’s not a win-win for everyone, this will not be sustainable,” he adds.

Micro-factories may not yet be popping up around the world, but makerspaces are being nurtured in places such as the Middle East, north Africa and Turkey.

GE has launched its own makerspace, GE Garages, which is essentially a roadshow highlighting the latest inventions and manufacturing in technology such as 3D printers and welding and laser cutters, and offering hands-on educational opportunities for participants. The programme has been taken primarily to universities and cities such as Chicago and Houston in conjunction with tech partners such as Quirky and Autodesk.

In 2014, the company also began taking GE Garages overseas as part of its IDEA (Industry and Entrepreneurship Development in Algeria) initiative, a first-of-a-kind scheme intended to nurture innovation in the energy sector. The programme also appeared for three weeks in Lagos, Nigeria, in June where it offered 42 classes, events and workshops.