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DON TAPSCOTT AND ANTHONY D. WILLIAMS

When it comes to motorcycles, China is king of the industry.

Motorcycle production has tripled to more than 15 million from five million vehicles a year since the mid-1990s. That's about 50 per cent of the global pie, making China the world's leader.

Meanwhile, the price of Chinese motorcycles built for the rapidly expanding Asian export market has dropped to $200 (U.S.) on average from $700. Not surprisingly, Chinese firms such as Lifan, Zongshen, and Jialing are now displacing well-known Japanese competitors such as Honda, Suzuki and Yamaha as the vehicle providers of choice.

In the rise of a fledgling motorcycle industry, numbers only tell half the story.

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The characteristics that make the Chinese motorcycle industry competitive also make for a particularly fascinating tale of how mass collaboration has the potential to reshape even the most stodgy manufacturing firms.

Unlike traditional manufacturing industries, where tightly regimented production hierarchies spit out end products under the command of a single leader, the Chinese motorcycle industry consists of hundreds of different companies that collaborate on motorcycle design and manufacturing.

While assemblers typically set out rough blueprints, suppliers of closely related components (like the frame and fairings) work in tandem to design and deliver complete subassemblies to final assemblers in tight intervals.

Decentralization allows for rapid iterations, experimentation and informal networking among adjacent suppliers, while assemblers integrate components and subsystems into finished products without having to impose much direction. If production problems arise, managers go to teahouses to iron out solutions, swap market intelligence, and co-ordinate ideas for future product designs.

The bottom line is that Chinese firms design and build new motorcycles faster and less expensively than conventional industry supply chains. The approach has been so successful that Honda, Suzuki and Yamaha, once dominant throughout Asia, have lost 40 per cent of their market share in the past 10 years.

The rise of highly collaborative ecosystems for designing and building physical things is not unique to China or the motorcycle industry in particular. Collaborative processes are emerging in industries where intellectual property is widely dispersed and production capacity is fragmented among hundreds of specialized firms.

Increasingly, lead producers in fields such as semiconductors, computers, cars, clothing and bicycles are responsible mainly for product concepts and marketing. They outsource manufacturing and many, if not all, aspects of component design. And they rely on a global plant floor consisting of hundreds of firms to assemble finished products.

Mass collaboration is the future of manufacturing, even for the most complicated product we can think of -- the new generation jumbo aircraft. Boeing is leading the way with its Boeing 787 Dreamliner by replacing its entire modus operandi with mind-boggling global collaborations.

Today's modern aircraft consist of tens of thousands of high-tech parts sourced from hundreds of specialized suppliers. In the past, companies like Boeing wrote detailed specifications for each part and asked suppliers to build to plan. Boeing gathered the parts on the plant floor and spent weeks assembling a single airplane.

Today, Boeing and its suppliers co-design airplanes from scratch and deliver complete subassemblies to Boeing's factory, where a single plane can be snapped together like Lego blocks in as little as three days. The design is co-innovated with its partners globally. Companies such as Spirit AeroSystems, owned primarily by Toronto-based Onex, are not just suppliers to Boeing -- they are more like peers collaborating with Boeing.

Like other leading manufacturers, Boeing is taking historic strides toward a new model of the corporation -- a truly global firm that breaks down national silos, deploys resources and capabilities globally, and harnesses the power of human capital across borders and organizational boundaries. For the firms in charge of co-ordinating these sprawling webs of value creation, innovation is less about inventing and building physical things and more about orchestrating good ideas.

The upshot is that, while Airbus is embroiled in difficulties, with some suggesting its new generation aircraft may never come to market, Boeing is now the darling of the industry.

Because mass collaboration applies to the world of atoms, not just the world of bits, manufacturers in other industries around the world need to rethink their business models. How will global plant floors and collaborative manufacturing techniques play out in markets such as health care, diesel earth-moving equipment, or construction? Use your imagination. As Boeing shows, the sky's the limit.

Don Tapscott is CEO of New Paradigm, a technology and business think tank, and the author of 10 books about information technology in business and society, including Paradigm Shift, Growing Up Digital.

source: globe and mail
 

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Thanks buddy for such a good post to write you have really work hard fro it and i agree with you that China is really king of the industry.
 
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