Very interesting article! Since downtime in oil and gas operations is so expensive, being able to reduce lead time for repair parts has huge upside. For this reason, I think 3D printing could have a lot of application in O&G. One concern I have is that since 3D printed parts will not have the same material properties as their conventionally manufactured counterparts, making these parts meet specifications may require some design changes. This may reduce interchangeability between 3D printed and conventional parts, which makes it more difficult to roll out new parts without expensive redesigns.
I also agree with your concerns about quality control of 3D printed parts. The way I would mitigate this is to look for applications where on-site QC capabilities are already available (e.g. pressure test). The supply chain benefits of 3D printing can be demonstrated using existing equipment (even on a narrower set of applications). That would make it easier to build a business case for buying new equipment and expanding to new product areas later.
I agree that the role of a dispatcher is vital to improve curtailment, but I am curious how that would work in a heavily state-owned system where mandated production targets have been the norm. Imposing free-market structures in this environment seems like a balancing act for the government.
It is interesting that China chose to localize turbine and nacelle production due to high shipping costs. This gives them a valuable production capability, but are they able to leverage these capabilities outside of China? If the shipping costs are high to import the product, presumably it would also be cost-prohibitive to export. One possibility would be to open up wind factories outside of China, with economical access to large wind markets (such as in Europe). I wonder if their production processes would translate well to other countries, where the labor costs and other external factors are substantially different.
I agree that improving snow-making capabilities is a good medium-term solution to mitigate risk for Vail Resorts. The investments they are making in technology and water rights help support this strategy. In the long run, it is very likely that ski seasons at current properties will still get shorter as temperatures warm. One way to mitigate this, is to open new resorts in locations with better long-term prospects, such as further north in Canada. To do so, they would need to buy land, and make significant investments to develop the resorts and the infrastructure required to get people there. They should work with the Canadian government to support these investments, as the government would likely be interested in the improved tourism revenue potential. Opening new resorts could cannibalize sales from existing resorts, but if existing resorts are already operating at capacity this could be an alternative to expansion at existing properties.
Interesting to consider how 3d printing can be applied to mass-production. You brought up some great points about flexibility in design, and reduced shipping / time to market. Another advantage is that 3d printing allows for designs that are not possible to produce with conventional injection molding. This can allow for reduced raw material usage and performance improvements through lighter weight designs.
Although it seems cool from a marketing standpoint, I don’t think putting 3D printers in the store makes sense operationally. First, dis-aggregating production will inevitably cause more variability in demand for an individual machine. This will lower machine utilization overall, and high demand for an individual machine could actually lengthen the throughput time for some orders. I also agree that store employees may not be the candidates for operating the machines. I would recommend that Adidas leverage their store employees to take measurements and drive orders for the shoes, but that they maintain centralized production.
One concern is that I don’t expect they will be able to 3D print the entire shoe. If they still need to source the fabric portion of the shoe from overseas, it seems as though the supply chain benefit is greatly reduced. If Adidas can move to a single material for the entire shoe, perhaps they can overcome this, but that design seems to lend itself only to more niche shoe categories. Another concern I have is that low cycle times will lead to low output and drive up costs. The carbon3D printer that Adidas is currently using costs around $40k per month to lease . From past experience, I estimate it would take around 1 hour to produce a pair of shoe soles. Assuming 30 days in a month and running 24 hours a day, this still means that the machine time would make the COGS for the soles alone $55, and that doesn’t count material costs or labor. Although I expect Adidas can negotiate better pricing with carbon3D, and that technology improvements will drive costs down over time, it is still hard to imagine the costs being attractive compared to injection molding. My recommendation is that Adidas focus on specialty applications where they can reap the full benefits of 3D printing and customers are less price sensitive–such as elite running.
Ultimately, I believe that the BE-4 will become the primary engine supplied for the ULA Vulcan. Blue Origin has more recent experience developing new engines, having proven its ability to develop a throttle-able rocket engine with the flight-tested BE-3. By comparison, Aerojet Rocketdyne has not developed a new ground-up engine in over a decade. Additionally, the BE-4 using LNG for propellant, which is between 1/4 and 1/3 the cost of the RP-1 used in the AR1, adding a further recurring cost advantage to the BE-4. The AR1 is currently about two years behind the BE-4 in development schedule. Given the currently strained relationships with Russia, it would be difficult for Congress to continue approving ULA’s sanction exemptions once an American-sourced alternative is available.
By partnering with Blue Origin, ULA is effectively subsidizing a future competitor’s development efforts. Blue Origin has demonstrated it’s suborbital RLV platform with the New Shepard, and once the New Glenn is mission-ready will be able to compete directly with ULA for launch contracts. As you mentioned, the recurring cost savings from the Blue Origin RLV will put significant market pressure on ULA. Although ULA is claiming that its recoverable engine plan will bring Vulcan launch costs within range of the reusable booster concepts, it is completely untested and not ready for its first test flight until at least 2024. This gives Blue Origin 4-5 years to refine its process for restoring New Glenn 1st stage boosters (in addition to the experience the company already gains from testing New Shepard rockets), which will likely generate additional cost benefits.
ULA’s best hope is to continue to leverage their longstanding relationships with NASA and the DoD, and proven track record of handling projects relevant to national security interests. Aerojet Rocketdyne would be a natural partner for this effort, but unless the partnership can deliver on their promise of cost parity, it may be too little too late.
We often hear about autonomous vehicles, but I enjoyed your discussion of how J.B. Hunt is utilizing technology to automate dispatch. I think your suggestion to automate other ancillary logistics tasks, such as quoting and invoicing, is spot on. However, I would worry about partnering with a third-party for these technologies, since it will make integration with their other systems more difficult and they could be vulnerable if those companies are acquired. Perhaps J.B. Hunt could consider acquiring project44 and omnitracs, and develop these technologies in-house to maintain a competitive advantage? They could also leverage that talent to bolster their own 360 Marketplace efforts.
In the long run, J.B. Hunt faces a significant threat to their industry leadership as a result of driverless technologies. As far as I know, they are not actively developing autonomous vehicles in-house. For J.B. Hunt to maintain its edge in this futuristic scenario, it needs access to driverless technology at a reasonable price, and to continue to control the customer relationship. As far as sourcing the technology, I believe J.B. Hunt should avoid the temptation to single-source. Although having a single supplier for their autonomous vehicles could help reduce operating costs through economies of scale, it will also give that technology provider significant leverage over J.B. Hunt and potentially erode margins over time. As far as controlling the customer relationship, I see the the efforts to improve information systems for drivers that you discussed as laying the groundwork to communicate efficiently to a fleet of autonomous vehicles in the future. If they can continue to drive these efficiency improvements in the customer-facing roles, then they will make themselves more difficult to displace.