SOCIAL MANUFACTURING New ways of sharing the value chain between firms and individuals by Hämäläinen, M., Mohajeri, B. & Nyberg, T. (Manuscript) Juhana HarmanenHelena HennoElli LeinoValeriya Zhuvertseva

What is social manufacturing? It is a concept describing firm-individual business models in......service industries...digital content production...manufacturing industries!

The objective of the article To build an empirically grounded theoretical framework that explains firm- individual business models in the context of manufacturing, To fill the theoretical gaps to explain this new type of cooperation. In addition, to analyze the sustainability of the outcomes related to these new business models.

Cases in the article ●SeeedStudio ○Electronic modules for makers to DIY projects ●Shapeways ○3D printing marketplace and service ●Quirky ○Product development and manufacturing ○Individuals as designers/inventors ●Fabbly.com ○Platform for buying and selling 3D printerfiles ●Kumpula solar power project ●Lijjat Papad ○Indian women’s cooperative manufacturing Indian flatbread ○Founded in 1959!

Concepts found in previous studies Distributed manufacturing Mass customization Personalization Peer production Prosumption Fabbing Personal fabrication Fab Labs Distributed manufacturing network of autonomous processing elements, with the capability of rapid dynamic reconfiguration deliver products and services that best meet individual customers’ needs with near mass production efficiency Personalization → select from a predefined set Mass Customization & Personalization

Concepts found in previous studies Distributed manufacturing Mass customization Personalization Peer production Prosumption Fabbing Personal fabrication Fab Labs Peer Production “Networked information economy” model of Production (open source software) collaborative authorship user-generated content Prosumption “Production + Consumption” Consumers are actively involved in creating values and values for their own consumption

Concepts found in previous studies Distributed manufacturing Mass customization Personalization Peer production Prosumption Fabbing Personal fabrication Fab Labs Personal Fabrication or Fabbing ability to design and produce own products, at home or in a workshop, and by using machinery FabLabs it is a worldwide network of open access digital manufacturing labs started by MIT

Platform Economy new collaborative modes of business Identified new concepts Platform economy Open innovation Crowdsourcing Produsage Sharing economy Co-creation Open Innovation

Crowdsourcing outsourcing a specific task to a “crowd” by making a public call Identified new concepts Platform economy Open innovation Crowdsourcing Produsage Sharing economy Co-creation Produsage user-led content creation (online publishing, knowledge management, multi-user gaming etc)

Sharing Economy economic model in which individuals are able to borrow or rent assets owned by other individuals or services provided by them Identified new concepts Platform economy Open innovation Crowdsourcing Produsage Sharing economy Co-creation active cooperation between firms and consumers → modifying own experiences about those products or services

Instructions The authors claim that social manufacturing presents a new dynamic with unique characteristics that are not fully covered by any of the existing concepts or theoretical frameworks Explain in detail and conceptually why the authors come up with this conclusion! What are the unique characteristics that the authors refer to?

Moreover, these business models are often facilitated by new technologies for knowledge-sharing and fabrication. Shared common characteristics (in cases) are referred to as social manufacturing all represent industries that included the processing of physical resources in large- scale production units, and thus have been previosly generally out of the reach of private individuals Second, as the result of new business models, private individuals in all the cases are now participating in the production as active contributors, cooperating with firms on at least one level of the value chain (ideation, R & D, design, or fabrication) 1 23

Characteristics in social manufacturing are described as Inclusive Dynamic Multilateral to fill in the knowledge gap between existing and new concepts

Inclusive characteristics in social manufacturing Inclusive, meaning that private individuals can self-select to cooperate with firms and contribute in all phases of the production value chain, whether in ideation, R&D, design, or fabrication, depending on the business model. Being inclusive, social manufacturing covers the phenomena, where individuals are significant contributors when cooperating, and also participate in physical fabrication.

Dynamic characteristics in social manufacturing Dynamic, meaning that the level of contribution between the individual and firm can vary over time to the extent that individuals can change from buyers to sellers. Being dynamic, social manufacturing accounts for the possible changes in the agency of individuals over time and in the role ambiguity that this induces, with buyer changing to seller or vice versa.

Multilateral characteristics in social manufacturing Multilateral, meaning that it might also include individual-firm-individual transactions, where individuals buy products through platforms owned by the firm, but also knowing the identity of the individual, who developed the product, and knowing that part of the payment goes to him or her. Being multilateral, social manufacturing includes the possibility for complex individual-firm-individual transactions, that go beyond the traditional dyadic relationships.

Discussion and conclusion These established frameworks do not sufficiently explain these emerging models for three main reasons. First, these concepts often fail to capture the idea of individuals actively sharing the value chain with firms. (Inclusive) This one-sidedness of all value being created by firms was already inherent in the value chain concept that Michael Porter introduced in The second reason is that these concepts do not account for the possibility that the agency can vary between the firm and individual over time. (Dynamic) The third reason is that the concept does not consider business models that include individual- firm-individual connections. (Multilateral) Introduced the term “social manufacturing” as a new concept for firm-individual manufacturing that is inclusive, dynamic, and multilateral, which thus fills the gaps that writers observed in the literature.

Critique and further research The previous concepts probably did not cover characteristics found by the authors because they did not exist previously. Therefore the social manufacturing -framework will also become more or less obsolete, when new businesses emerge. Case study: is this generalizable? Problems with social manufacturing business models: ●Environmental sustainability: will social manufacturing lead to a more “disposable” culture? ●Regulation and responsibility issues in firm-individual relationships

Key takeaways Social manufacturing is proposed as a new framework for firm-individual cooperation within manufacturing industries. The framework fills the theoretical gaps in the concepts used for distributed manufacturing, personal fabrication, and firm-individual cooperation in service and content production. Social manufacturing is inclusive, dynamic and multilateral. New types of business models are becoming available in the manufacturing field Social manufacturing requires: 1)Management of firm-individual cooperation 2) Engagement of the community