SIEMENS

Your company has created the world’s first open source production vehicle – the Rally Fighter, and the world’s first crowd-derived combat-support vehicle, the XC2V, which is now being tested. How did you come up with the idea of bringing crowdsourcing to vehicle manufacturing?

Rogers: Vehicles are complex systems that are characterized by long lead times for their development. The traditional way to develop a vehicle is to raise a billion dollars, hire the best engineers, build a big factory, and hope that you can sell your product. I think that’s a brute force approach. With crowdsourcing, instead – what we call co-creation – you realize that if you had a better handle on what people wanted and if you had a way of keeping them informed about events over a lengthy development period, you would probably come up with a product that would have a higher level of acceptance than if you did not do this.

So co-creation is all about tapping into what customers really want, not to mention the creativity of the crowd?

Rogers: Most people assume that we do crowdsourcing to get good ideas for free. First of all, the ideas are not free. But more importantly, the driving force behind our business is that future customers are involved in what we’re building. There is also a collective dynamic at work here. When you have a finite team, you have limited ability. But when you have a huge community you have the potential of aggregating just the right people in a very organic way.

What motivates members of your community to get involved?

Rogers: Money, recognition, resume padding, or simply the desire to tinker. Customers such as BMW and Peterbilt trucks come to us. They offer prize money for a design that solves a problem. In principle, anyone participating in such a project can make a lot of money for 3 or 4 weeks of work. But what’s important is that even if your idea is not chosen, you’ve had an opportunity to be part of the action. And some of the awards are tiered, meaning that you can say that you were among the top players.

How did Local Motors, which was founded only about five years ago, get a contract to build the prototype for the XC2V?

Rogers: The reason is that a non-traditional business can break into any field where there is a great need that is not being met. Not only did we show the U.S. Defense Advanced Research Projects Agency – DARPA – that a troop transporter could be built on schedule and under budget, but we gave them a process by means of which this could be done over and over again.

In what ways has Siemens – particularly Solid Edge computer-aided design (CAD) software – helped Local Motors put crowdsourcing to work?

Rogers: There are a lot of products on the market that make people think that CAD has come to the masses. But the truth of the matter is that such systems have vast limitations. In fact, they just don’t work. You can’t use them to design solid models of things that can be machined and built and put through computer-aided vetting. At Local Motors we needed a professional design tool, and that’s what Solid Edge is. The other factor is that, even with high-end CAD systems, the preconception about collaboration has been that it involves only about 100 people – maybe 1000. But what was never considered – until now – was the dynamics of a team that might have many tens of thousands of people working with different CAD systems. With this in mind, we worked with Siemens to provide our community with a platform hub that can import non-native formats. But Siemens also made it possible – through development of a Solid Edge version called Design1 – to offer professional grade CAD services to our members on a rental basis. What’s more, Design1 can be downloaded rapidly all over the world. So people can work offline. And that is a key point. Competitors don’t offer that. Their design software is too big for downloads. As a result, our members can, for instance, post a design, even a thumbnail, but at the same time allow another user to call up that image in a browser and see it in 3D, take measurements from it, and then comment on it. So it is a very valuable co-creation tool.

President Obama has referred to the XC2V as an example of how collaboration between the military and industry can enhance the competitiveness of U.S. manufacturing. Was he right?

Rogers: Absolutely! I think that what he meant was that the key to competitiveness is not so much in companies, as it is in people’s minds. And if you can unlock their creativity through crowdsourcing, then industry can be as competitive as the most creative individuals. I also think that the President knows that this has to go beyond the military, and that this should be applicable to the manufacturing sector as a whole.

How are simulation, collaborative software tools, and high-speed communications changing manufacturing?

Rogers: I want to make one point clear before I answer. The idea of digital manufacturing and the idea of open collaboration are two separate notions. It is important to keep that in mind. Now, simulation and modeling and advanced software and communications are essential technologies for manufacturing; but there’ another key technology: scanning. Fifty percent of the time you start out with something that already exists and you need to get a 3D virtual version of it quickly. Put it all together – including scanning – and you have the ingredients for revolutionary change.

Three-D printing, also known as additive manufacturing, is opening the door to rapid prototyping and inexpensive, individualized products. Is it a game-changing technology?

Rogers: The level of enthusiasm for additive manufacturing may be a little overblown. There are traditional technologies that are excellent. And they are not going away. But additive manufacturing fills a gap in some key areas such as inventory reduction and reducing the cost of complexity. In my opinion, traditional and additive manufacturing will probably coexist in the future. But ultimately, the combination of digital manufacturing and the ability to share data in high-bandwidth lines will truly revolutionize manufacturing.

What will be the most fundamental change in the auto industry over the next twenty years?

Rogers: The key development will be the change in the minimum efficient scale for the production of vehicles. What that means is that if you have to invest a billion dollars to develop a car, then you will have to sell a lot of cars to cover that cost. But if you only had to invest one million dollars, then you could afford to sell a lot fewer cars. The trends we’ve been discussing are carrying us in that direction. If the minimum efficient scale is altered, it changes the whole notion of economies of scale. What you are left with is an economy of scope. I think that is what we are looking at. Over the next 20 years we will see an explosion in product diversity and individualization. The tools we’ve been talking about – crowdsourcing, better scanning, better post-production software, and hybrid production technologies – will drive it.