Back to the Future: How We can Synergize the Current Polarized Politics While Integrating Technology

 Currently, the political situation in the United States is similar to the political chaos in the 1850s—moving toward the Civil War.  Like the Civil War, it is a war between economic architectures, “crony” capitalism and Marx’s Communism.   However, there is a better way, returning to the organizational economic architecture of the founding fathers, in particular Thomas Jefferson.

There is a second overriding issue, of which we are all aware, the change from the Age of Print to the Digital Age that is creating more cultural (and even biological) change than most people are aware of.  Right now, the smart phone is becoming the third lobe of our brains.  It remembers the phone numbers of our contacts, it enables us good asynchronous communications with them (in the form of text messages and email), it tells us the weather (current and future), it sings to us the music we want to hear, it even tells us where to drive our vehicles, and so much more.

But it also knows where we are, what we are doing, what we’re interested in, and who we are doing it with.  In the near future it will enable politicians and bureaucrats to control all our activities; that is unless advanced artificial intelligence enables the technology to take over and reduce humanity to slaves of the singularity.

Again, there is a better way.  My book, Jeffersonian Economic Architecture in the Digital Age discusses an alternative.  It starts, in part 1, with a new theory of the definition and source of economic value. In this part economic value and wealth is defined as a direct result of knowledge. An increase in knowledge increases the organization’s ability to survive and thrive.  It goes on to demonstrate that this concept and theory is very likely to be true.

Part 2 describes and discusses organizational architecture.  This architecture applies equally to individuals and nations throughout human history.  It starts with a static enterprise architecture based on the IDEF0 model.  It details the functions and components of that architecture to show how it interlinks these functions of input, process, output, control and mechanisms.  It then adds a process to the architecture using the OODA (observe, orient, decide and act) loop, to produce an organizational architecture.  Further, it shows how by using this model any organization can become more effective in what it’s producing and more cost-efficient in how it produces it.

Part 3 uses this organizational architecture model within the historical context of humanity to support the reality of organizational model.

Part 4 interlinks this organizational model with both the Declaration of Independence—mostly written by Thomas Jefferson—The US Constitution—of which he was involved—with recent technological concepts of Services Oriented Architecture and Cloud Computing to produce a political/economic architecture that allows and enables everyone the “pursuit of happiness” wherein “pursuit” means work at what they want to do and have a talent for.  It also means that there will be a great many more millionaires and very few billionaires, that is, it enables sharing the wealth rather than forcing the wealth through governmental redistribution taxes.

While it would be nice to receive royalties from the sale of this book, my purpose for writing it is my hope the people will take a serious look at the political right and left, and technology change, and consider the far-reaching consequences of not starting from the concepts in this book to transform the political/economic system without having a pyric civil war.

I would appreciate any thoughts or ideas you have on this paper or on Jeffersonian Economic Architecture in the Digital Age.

The Digital Future: Services Oriented Architecture and Mass Customization, Part 5A

From Previous Parts

Part 1 discussed the four ages of mankind.  The first was the Age of Speech; for the first time humans could “learn by listening” rather than “learn by doing”; that is, data could be accumulated, communicated, and stored by verbal communications.  It also transformed the hunting and gathering into an economic architecture of small somewhat settled communities over the course of 300,000 years.   Settlement produced first significant increase in economic activity, wealth per capita, and in the academics in the form of the shaman for tribal organization.

The second, the Age of Writing, produced a quantum leap in data and information that could be accumulated, communicated, and stored.  This was over a period of at least 6,500 years.  During this time, academic activity evolved from everyone working to survive to a diversity of jobs and trades and the economic stratification of political organizations.   Again, the total wealth of humanity took a leap of orders of magnitude as the economic architectures of city states, then countries, and then empires evolved.  The academics evolved from the shaman, to priests, clerics, researchers, mathematicians, and universities (e.g. the Museum at Alexandria ~ 370 BC and the University of Bologna, 1088) and libraries.

The third, the Age of Print, started with Gutenberg’s press in 1455, but blossomed with Luther’s radical admonition that everyone should “read” the bible about 1517.  Suddenly, the quantity of information and knowledge to a leap of several orders of magnitude as all types of ideas were accumulated, communicated, and stored.

Part 2 dealt with history of Services Oriented Architecture (SOA) as it developed hand in glove with computing architecture—a natural fit.

 Part 3 A, deals with how SOA works with mass customization of products, systems, and services. 

Part 3 B, discussed the three economic architectures, infrastructure, mass production, and mass customization will be employed in the Digital Age.

Part 4 discussed how the Mass Customization (Services Oriented Architecture) will change the culture within which the individual lives.

Part 5A and B will discuss the effects of the  paradigm shift to Mass Customization (Services Oriented Architecture) will effect various industries and the Mass Production Culture currently in vogue. In Part 5A I will forecast how I see Mass Customization will effect Golf Club, Education, Retailing, and Entertainment industries.

Future Mass Customization Changes to Various Industries

The Services Oriented Architecture model used in Mass Customization will sooner or later completely supplant the mass production architecture in most industries in the Digital Age.  It will affect all industries to a certain degree.  The following are examples that I see coming; some are currently changing. 

Mass Customization of Golf Clubs

Recently, I saw a new ad on TV for Golf Clubs.  This was not from a golf club manufacturer, but from a golf club Mass Customizer.  The ad claimed that the firm would match the grips, the shafts and the heads to the golfer.  While I’m not sure how they do this, they are advertizing Mass Customized golf clubs.  This is the future in the Digital Age.

Mass Customization of Education

Education is likely to see change as massive and discontinuous as the change from the Age of Writing to the Age of Print.  Currently, education, from elementary schools to university, is based in the Age of Print’s Mass Production.

All children are offered the same education from the same books and taught by teachers that went through roughly identical class work of learn by listening. The problem is that people learn in one of two ways, by listening (which includes reading) and by doing.  The Mass Production education of the Age of Print focused primarily only on learning by listening (which includes reading).  The result is that many students are left behind.

These students are the ones that learn by doing.  They are the ones who looked down upon because they take “shop class”, “auto mechanics” or others of this ilk.  And these are the people that take the “blue collar” jobs, like carpenters, and plumbers; the ones that actually maintain portions of the infrastructure that everyone needs.

In the Digital Age, there will be Mass Customization of education will lead away from degree-based education toward individual certification on any topic.  There will no longer be bachelors, masters, or doctorates in any “discipline”.  Alternatively, with a certain level of certification the student could “earn” a bachelors, masters, or doctorate.

Apprenticeships

Actually, this is currently happening, though as a sub-culture of education.  And it is happening in two ways.  The first is the oldest method of education, apprenticeships and internships; yes, learn by doing.  The second is technology.

The “learn by doing” method never really stopped being used since before the dawn of human civilization.  However, with the advent of Mass Production education, it fell out of fashion, relegated to the backwaters of high school and college education.  It was turned over to “trade schools”; and the graduates of these programs and schools are considered inferior to “college graduates” and paid accordingly.

However, the best, not only in trades, like carpentry, painting (Yes painting, cars ,walls, and boats), plumbing, and brick laying, but also “fine arts”, dance, composing music, and so on, are trades and should not be treated as anything else.  In fact, even today most of the best composers, (best being defined as those that are most well known in their time, and made or make the most money, learned by doing. 

None of the great master composers of the baroque or romantic periods went to college.  Instead, “they studied under…” These composers were and are well known and made money during their life time.  In my opinion, the best symphonic composer of the late twentieth and early twenty first centuries, John Williams, studied composing privately.  Taylor Swift is one of many highly successful composers who never finished high school, yet made it because she learned her craft by doing within the milieu of a composing studio.  Like rap-poets of the 1990s through today, didn’t go to college and study poetry, they learned by doing.

Additionally, today there is a movement among some groups of parents to home-school their children.  Again, this has gone on since before the dawn of history, but, as I will discuss shortly, will be much more available due to the Digital Age Technology.

 So why not have publicly funded music academies, or better yet, music academies funded from the purchase of music; have dance schools funded by dance, and so on.  In fact, to some extent, we do.  So why can you get a Ph.D. in musicology, or an MFA in dance, but no masters or doctorates for plumbing, etc?  Getting rid of all of the “arts departments” in colleges would save a huge amount of public dollars in indirect costs etc, the same way getting “trades” out of colleges has.

Digital Age Technology

 Now the Digital Age technology comes into play.  Already there are hundreds of courses “on line” for every grade from 1^st grade to graduate school.  And this is only at the start of the Digital Age when only early adopters are trying these classes out.

As these become more mainstream and accepted these “classes” will become much more customized to the individual students, needs, wants, proclivities, and language, that is, mass customization of classes.  I envision a time when students in Tel Aviv, Teheran, Nairobi, Nantucket, Keflavik, and Kiev all take the same class across the Internet, interact with the “teacher” and each other in their own language, but understanding each other through a translation function built into the software.

I put “teacher” in quotes because a teaching function can be implemented using data showing what the student’s interests are, what type of learning they are best at, and so on.  So, for example, in teaching math, “the teacher” can choose “story problems” that interest the student.  If the student learns better with images, then “the teacher” can teach with images; if the student learns better by listening or reading, then “the teacher” can use those methods.

 

Students will be able to learn in group sessions, if that is the best way for them to learn, or in tutorial/coaching sessions, if they learn better (quicker with better retention) in individual settings.  So with technology, Mass Customization of education is possible.

It is impossible for me to describe all of the ins and outs of how I envision the functions of technology to be assembled for each and every student, even at a high level, because there are over 7 billion ways of learning by 7 billion bedroom biological experiments.  I may try in another post.

It will not be until all elementary, secondary, colleges and universities are disbanded that Mass Customization of education will take place—as radical as that sounds, because it will require a rebellion against the current educational system that produces “parts” for governmental and business organizations.

Mass Customization of Retailing

As described earlier, the clothing industry will change radically in the Digital Age.  Customers will be able to order almost any clothing and accessories custom-made for their bodies across the Internet.

Up to a point, this will serve all customer types better than “heading to the mall”.   As I describe in my dissertation, there are three types of customers, hunters, comparative shoppers, and shoppers.

 The Internet/web serves the hunter type (the ones that have a specific set of requirements) because they can find the part or component quickly and easily; even compare costs.  It serves the comparative shopper type (the ones that have a fuzzy or an incomplete set of requirements) well because they can comparison shop quite readily on “the Net”.  However, it will not serve those shoppers who treat shopping as a recreational or interpersonal activity.  This is at least in the near future, though it might be better in the future.

Already, today, Amazon, Google, and others are serving as the Internet’s concierge service, analogous to the concierge services in a hotel.  These inform customers of the products, systems, and services that best meet their requirements, in terms of function, cost, and schedule.

A little further down the line, necessary consumables like food, will come to the customer using one of two procedures or a combination of both.  The first is a method that could only be implemented in the Digital Age; having the person decide on a menu, having the “smart” cupboards and refrigerator check the inventory to ascertain that all of the ingredients are available, and order ones that are not for home delivery (by drone???).  Obviously this will include completely catered meals.  For many people this may mean a large reduction in the kitchen footprint.

The second is for customer’s that want to comparative shop.  They will still be able to “go to the market”.  However, “the market” will be like current “farmers’ markets” in the U.S. and markets in the rest of the world.  They will be filled with vendors instead of shelves.  These will be for “foodies” and other comparative shoppers that want to choose their fresh foods.

I suspect that in the next 20 to 30 years, town centers and most shopping malls will go under the bulldozer (Have a CAT D10 renovation?).  They will be replaced by these types of markets, by group entertainment centers of all sorts, and by barbers, hair dressers, auto service centers, and other services.  If you think about it, this is what applying SOA (Mass Customization) to the physical footprint of retail industry should look like.

This does not mean that “brick and mortar” stores will entirely disappear.  From the description above, it’s readily apparent that there will be a need for a town center.  I suspect that these town centers will have the physical architecture more akin to the medieval and current European towns than to the American sprawl of large and strip malls. And since, as discussed above, major cities will become cost ineffective and obsolete, there will be a return to a grid of small cities and towns.

Further in the future, I think there will be opportunities for customers to look at the products in virtual reality (already a customer may try out a system or service before purchasing).  But the concierge service provided on the Internet will be focused on understanding the customer’s requirements before recommending a product, system, or service.

Mass Customization of Entertainment

When broadband cabling came into vogue, before the real acceptance of the Internet, it was used to provide more television channels with higher quality video and audio.  So the “cable” companies combined the broadband cabling system (a utility and therefore using the Infrastructure Architecture) overlaid with content (using Mass Production Architecture).  And local governments treated the cable companies as utilities, not content providers, so they agreed to allow them to be monopolies.

Initially, adding content was to market the cable to potential customers; they could get more of what they wanted to see (e.g., sports) on cable in local areas.  However, small cable companies were “bought out” by other cable companies, which have turned into large cable monopolies that are only semi-regulated.

These companies provide their “customers” with content bundles.  This means that someone who likes history, science, and travel must also pay for sports and “news spin-doctoring biased” channels for which they have no requirements.  This means that to get the channels the customer wants, they must “rent” and upgraded bundle (or package).  This, again, has many channels the customer does not want, coupled in the bundle with the one or two that he or she does want.

Then, to add insult to injury, they added an increasing amount of advertizing on each channel, to the point that the actual program material runs about the same as a half hour program did in the 1960s and 70s.  Additionally, they’ve nearly doubled the cost of “the bundles” including the basic bundle.  One consequence of this is that the entertainer’s (e.g., actors, athletes) salaries have skyrocketed; but so, too have that of the content providers and the cable companies; all this defrauding at the expense of the customer.

There are two methods for resolving these monopolist behavior, laws and regulation, or market forces.  First, we could legislate the separation of content provisioning from the communications infrastructure, legislate against bundling of content, and break up large content providing companies, and communications infrastructure utilities.

The other alternative is to let economics take its course.  With the advent of the high-speed Internet and WIFI systems, allowing data streaming of video, and Netflix, Hulu, and especially YouTube the natural course of entertainment is toward Mass Customization of entertainment, rather than Mass Production of entertainment. In the process there will be many more “channels” to meet all types of customer interest (requirements); that is, the entertainment market will be a plethora of niche markets.

 A good example of this is the SV Delos channel on YouTube.  This series started out as a Video-log of the sail of SV Delos and because its creator did an increasing professional job with the assistance of the rest of the Delos crew has produced an income stream sufficient to enable the young crew to sail without the need to stop to make freedom chips (money).  They work at creating videos and subscribers support them because they enjoy the videos.

Eventually, maybe in 50 years, maybe in 10 years, the utility functions of the current entertainment empires will be separated from the content provisioning and the content provisioning will separate into services, some providing the actual content, some providing services (e.g., animation, editing, and so on) to the content providers.

A Look ahead to Part 5B

As you can see from my forecasts, Mass Customization is and will continue to drastically change the architecture of the industrial complex that creates value and thus wealth for humankind.  However, like the transition from the Age of Writing to the Age of Print, the transformation of industries and cultures during the transition from the Age of Print to the Digital Age will create stresses on the current cultures that will break out into war, destruction, and all sorts of problems, unless these are recognized early.  Putting too many rules and regulations in place, like the liberal religion wants, like the Catholics before, will create additional stress that will definitely lead to civil strife.

But at the end, and if we can make it, the economic world will have a much higher level of wealth for all people.  Please keep this warning in mind.  I will repeat this warning at the end of Part 5B.

In Part 5B I will forecast how Mass Customization will effect, transportation, housing (and cities), healthcare, and space.

The Digital Future: Services Oriented Architecture and Mass Customization, Part 4

From Previous Parts

Part 1 discussed the four ages of mankind.  The first was the Age of Speech; for the first time humans could “learn by listening” rather than “learn by doing”; that is, data could be accumulated, communicated, and stored by verbal communications.  It also transformed the hunting and gathering into an economic architecture of small somewhat settled communities over the course of 300,000 years.   Settlement produced first significant increase in economic activity, wealth per capita, and in the academics in the form of the shaman for tribal organization.

The second, the Age of Writing, produced a quantum leap in data and information that could be accumulated, communicated, and stored.  This was over a period of at least 6,500 years.  During this time, academic activity evolved from everyone working to survive to a diversity of jobs and trades and the economic stratification of political organizations.   Again, the total wealth of humanity took a leap of orders of magnitude as the economic architectures of city states, then countries, and then empires evolved.  The academics evolved from the shaman, to priests, clerics, researchers, mathematicians, and universities (e.g. the Museum at Alexandria ~ 370 BC and the University of Bologna, 1088) and libraries.

The third, the Age of Print, started with Gutenberg’s press in 1455, but blossomed with Luther’s radical admonition that everyone should “read” the bible about 1517.  Suddenly, the quantity of information and knowledge to a leap of several orders of magnitude as all types of ideas were accumulated, communicated, and stored.

 

Part 2 dealt with history of Services Oriented Architecture (SOA) as it developed hand in glove with computing architecture—a natural fit.

Part 3 A, deals with how SOA works with mass customization of products, systems, and services.

Part 3 B, discussed the three economic architectures, infrastructure, mass production, and mass customization will be employed in the Digital Age.

This part, Part 4 discusses how the Mass Customization (Services Oriented Architecture) will change the culture within which the individual lives.

Changes for the Individual in the Digital Age

As can already be seen the Digital Age and the Mass Customization (Services Oriented Architecture) will change human culture; and will likely change it as much as the cultural change with the discontinuity caused the move from the Age of Writing to the Age of Print.

Already children, those below the age of 21, spend as much or more time interacting with others through their informational interfaces, (smart phone) as they do in direct contact with their peers and elders.  They have little idea what a dictionary or an encyclopedia are, using a web browser and search engine instead.  Additionally, they no longer learn cursive writing, except perhaps to sign their name; they have little need for this artifact from the Age of Writing.  They will continue to shop online more and go to the malls less; with some exceptions that I will discuss later.

The Economics of the Digital Age

 The economics of the Digital Age will change drastically.  There is a paradigm shift with the discontinuity caused by the revolutionary changes of Mass Customization.  And it is a shift only whispered about in the financial markets and by economic gurus.

During the Age of Print, and especially with Mass Production, there was always a need for an increasing customer base.  This was based on the increase in the economies of scale as production increased.  At the time this increased the need for additional labor.  In short, the total wealth and the general wealth of a culturally/political/geographically cohesive organization increased with increased population.  This is with the caveat that the organization had access to the raw materials.

An additional factor, already discussed in this paper was the skill-level of the population, that is, the education by listening and by doing.

So in the Age of Print, the creation of wealth (the amount of value) of a country was linked to:

·         The population size and its increase

·         The integration of society (not its diversity)

·         The ability to have access to raw materials and  to transport the finished goods to markets

·         The Security of the country

So much for wealth creation in the Age of Print.

In the Digital Age the creation of wealth will have different linkages.  The reason for this is the overlay of Mass Customization (Services Oriented Architecture) Architecture over the current Mass Production Architecture and Infrastructure Architecture.  And it will replace them in much of the economy.  I will give a few examples in the next section of this paper.

One thing that will happen is that economies of knowledge will continue to replace economies of scale as I’ve already described.  What this means is what I’ve discussed in one of the later chapters in my Book, Organizational Economics: the Formation of Wealth, that a great many small firms will replace the Fortune 500 of today.

 

In the future, either confederations of small organizations (using orchestration as a guiding principle) or concierge-based alliances of small organizations (using choreography as a guiding principle) will create both giant and small products, systems, and services. Additionally, I would expect that in some or many instances, alliances of confederations to implement the greatest/largest projects and programs.

Both confederations and alliances will require standardization of contract laws, regulations, and business rules to operate effectively.  Knowing the government and the current power and lobbying power of Wall Street (financial firms), large corporations, and unions, the ride to full acceptance of this new economic architecture will put the most fantastic roller coaster to shame just as moving from the Age of Writing to the Age of Print did.

In the end, these current economic empires will fall, just like the political/economic power of King and Pope did.  And since this is a revolutionary change, (while I hope not), there may be revolutions, counter-revolutions, and strife caused by it.

The New Order

At the end there will be a new order of economic activities.  It will be very much more a meritocracy not caused by policy but by “the invisible hand” (in evolution it is called natural selection).  In totality, there will be much more wealth because the knowledge of individuals will be turned into value.

 Additionally, it will be a version of “Jeffersonian Democracy.”  There will be a great many small independent firms, and so there will be a great many owners of these firms, in the way Jefferson envisioned it for small farmers/land owners.  This means a resurgence of the “middle class” as small business owners.

These small businesses will need to fully understand the requirements of their customers and tailor their product, system, or service to meet those requirements.  Consortium/confederation and alliance program manage process will be wrapped around the customer’s product, system, or service requirements, instead of focusing primarily on cost, schedule, and the finance engineers bottom line.

It also means that the Mass Customizers will focus more attention on meeting the customers’ requirements than advertising to tell the customer what the customer should want, which is their product, system, or service.

Government will provide security and infrastructure (meaning physical, cyber, and basic research).  Everything else will change based on Mass Customization (SOA) Architecture.  This includes many industries that most people think of as infrastructure-based, including education and medicine.  These two among several I will describe in more detail in the next section.

In economic terms, the result could be that the GDP will fall, while the GDP per person and the wealth of people generally, will increase.  The reason is that knowledge of the steps in a process breeds tooling to make the steps simpler, easier, and faster.  Tooling is the economic equivalent of weapons being a “force multiplier” in the military.  In the economic case, tooling is a “process multiplier”, as first discussed by Adam Smith.

As a process multiplier, tooling enables the same number of workers to create orders of magnitude more uniform quality products, faster and therefore cheaper.  But tooling costs stored value (i.e., money).  This is the reason that the Mass Production Architecture and money are linked and called Capitalism. (Aside: It probably should be called something else like Value Creation because it isn’t a form of idealism or utopianism, like socialism or communism, and it isn’t a religion like Liberalism, it’s a proven model of the way things actually work, at least in part.)

Throughout the Age of Print tooling was constantly improved and refined.  In the early and mid-1950s, there was an ongoing controversy as to whether analog (mechanical) or digital computers were the wave of the future—that’s how good the mechanism became. (Aside: And it is a clear demonstration of the Superiority Principle: “The first instance of a superior principle is always inferior to a mature example of an inferior principle.”)

Then, in the 1960s to 1990s, enter the CNC machine, that is, the Computer Numerically Controlled machine.  At this same time robotics was being hyped as the way to continue to reduce costs for Mass Production in the future.

In the 1960s through the 1990s, the Mass Production Architecture (and paradigm) focused on a totally automated factory, with little or no warehousing because everything would be JIT (Just In Time).  I worked on two or three such projects during that time, wrote a number of articles the future of the automated factory based on my experiences, and worked on several national and international standards committees.

In 1985 and 1986 I worked on a paperless shop floor information system that became the information backbone of a state of the art factory.  It not only integrated the shop floor systems, but had communications linkages with the engineering and MRP (Materials Resource Planning) systems. It won the Society of Manufacturing Engineers Lead Award in 1987.

I read about the GM’s fully automated engine plant that built to produce a single engine.  The assembly line was a mile and a half long, but without a single worker.  I thought this might be a poor investment because I could already see the glimmer of the Digital Age on the horizon.

Subsequently, I visited The GM SATURN plant.  This plant was both state of the art and attuned to Mass Customization (SOA) Architecture.  It could produce multiple types of engines off a single assembly line and it could produce (within reason) multiple types of vehicles.  While it wasn’t totally automated, at assembly stations with workers, the stations were set up ergonomically so that petite or large workers could work at the station comfortably.  Unfortunately, the SATURN product either did not meet the customers’ requirements or was not properly marketed.

In the future, all manufacturing will be somewhat the same, but also quite different.  There will be two key differences.  The first is the standardization of contractual, requirements, and design interfaces among the various functions of the confederation and/or alliance. 

   

The second is that there will be standardization of highly business sensitive communications across a physical and logical network separate from the current Internet.  The interfaces for users will be locked down both in terms of communications protocols and data formats.  No documents or interpersonal communications (e.g. e-mail) will be allowed.

These two key differences will enable and support both business confederations and alliances the agility to act quickly to customers’ requirements, the heart of the Mass Customization (SOA) Architecture.

Changes to Habits (Cultures)

In the Digital Age there will be significant cultural change.  I will discuss two of these changes.

Home office/business

Beyond these two key requirements for the successful implementation of Mass Customization using Services Oriented Architecture, a third, only slightly less important is product transportation.  In the future, allied organizations are less likely to be collocated and therefore transportation of their output to final assembly and to the customer enables and supports Mass Customization.

In the Age of Print collocation was of seminal importance.  In a paper I wrote (Industrial Location Behavior and Spatial Evolution, Journal of Industrial Economics, Vol. 5 (1977) pp. 295-312.) I discuss how a region around Detroit MI became the center of the automotive industry, though initially there were auto manufacturers all over the country.  The reason was simple; it was the center of innovation, the way “silicon valley” has been for information technology.

Now there is no need for geographically regions to be the centers of innovation; I know.  By 1990, I had the personnel of the advanced data communication laboratory I managed, working from home most of the time.  By 2003, I was leading nationwide software development teams and producing software that met the customers “product” requirements and their “business” requirements (cost and schedule).  So, I know there is no need to collocate software development personnel in a high cost, high tax state where the environmental restrictions are such that houses can’t be built and people live in RVs.

In the Digital Age, centers of innovation will occur in virtual space.  Personnel can work from home, wherever home happens to be.  For example, this means that someone who wants to sail around the world, but has a high tech design job can do both.  That is he or she will be able to design the latest widget from the middle of the Pacific Ocean.  Finance and work on various financial markets can already be done from anywhere, so there is really no need for the New York Stock Exchange being located in New York. It could be located in eastern Kentucky or in West Virginia, with backup systems in Mississippi.  This would mean a lower cost of living and lower taxes for all.

Additionally, this means that there will be less or no need for office buildings.  Since people can work from their homes in home offices, or from wherever and get the same tasks and activities accomplished, it’s pretty silly to spend money because of an “edifice complex”.

I would see the “great cities” and regions diminish in size and population, while small and medium cities and regions regain population.

Developmental versus operational/maintenance

That doesn’t mean that there won’t be all facilities, just that facilities will be sized for the product that the organizations are implementing; i.e., you can’t build an aircraft carrier in a bathtub.

Consequently, for the near-term future these plants and the infrastructure supporting them, supporting the communication, and the rest of the physical and information infrastructure will require maintenance personnel.

In the Digital Age there will be two general categories of jobs/workers.  Not White Collar and Blue Collar, but Developmental and Operational/Maintenance.

In fact, most jobs will be in the operational/maintenance category.  This will include plumbers, lawyers, electricians, nurses, auto mechanics, medical doctors, landscape maintenance, and so on.  Most of these jobs will be structured after the Mass Customization Architecture.

For example, when the doctor provides the analysis of an illness together with a customer’s DNA, the pharmacist will manufacture a dosage of one or several medicines (or drugs) in exactly the formulation that will best target the disease, heal the customer, with the least side effects.  While some of these “drugs” may be mass produced, most will be formulated at the pharmacy from various chemicals.  This means that every pill will be produced for just one person.  This is an example of the future in the Digital Age.

Relatively few people will be involved in development of new products, systems, or services on Earth.  These will be talented out-of-the-box thinkers and doers.  And they will not be what we think of today as “college educated”.  In all likelihood, there will be no such thing as a college degree in the future.  Education too will be on a Mass Customization basis, as I will discuss in the next section of this paper.

The Digital Future: Services Oriented Architecture and Mass Customization, Part 3 B

From Previous Parts

Part 1 discussed the four ages of mankind.  The first was the Age of Speech; for the first time humans could “learn by listening” rather than “learn by doing”; that is, data could be accumulated, communicated, and stored by verbal communications.  It also transformed the hunting and gathering into an economic architecture of small somewhat settled communities over the course of 300,000 years.   Settlement produced first significant increase in economic activity, wealth per capita, and in the academics in the form of the shaman for tribal organization.

The second, the Age of Writing, produced a quantum leap in data and information that could be accumulated, communicated, and stored.  This was over a period of at least 6,500 years.  During this time, academic activity evolved from everyone working to survive to a diversity of jobs and trades and the economic stratification of political organizations.   Again, the total wealth of humanity took a leap of orders of magnitude as the economic architectures of city states, then countries, and then empires evolved.  The academics evolved from the shaman, to priests, clerics, researchers, mathematicians, and universities (e.g. the Museum at Alexandria ~ 370 BC and the University of Bologna, 1088) and libraries. 

The third, the Age of Print, started with Gutenberg’s press in 1455, but blossomed with Luther’s radical admonition that everyone should “read” the bible about 1517.  Suddenly, the quantity of information and knowledge to a leap of several orders of magnitude as all types of ideas were accumulated, communicated, and stored. 

Part 2 dealt with history of Services Oriented Architecture (SOA) as it developed hand in glove with computing architecture—a natural fit.

 Part 3 A, deals with how SOA works with mass customization of products, systems, and services.  This part, Part 3 B, will show where the three economic architectures, infrastructure, mass production, and mass customization will be employed in the Digital Age.

The Classes Architectures of the Future

Now let’s look at the three archetypal architectures.

Infrastructure Architecture (Monolithic Architecture)

The first archetypal architecture is Infrastructure Architecture, which might also be called “well regulated monopoly architecture”, “utility architecture”, “government architecture”, “Medieval architecture”, “Socialist architecture”, “Communist Architecture”, “Dictatorial architecture”, or “Barbarian architecture”.  In software it’s termed “Monolithic Architecture”.  Yes, that’s a lot of names for the same economic architecture.

I prefer to call this model “Infrastructure Architecture”.  It is an architecture where the function is governed as a single unit. 

The infrastructure/government architecture is by far the oldest of the architectures.  It’s beginnings are built into the DNA of all living things—it could be called the “wolf pack” model.  Humans used from the time they formed bands (and probably before speech) until 1455 with the start of the Age of Print.

Its foundation is risk reduction through a secure existence.  However, this risk reduction also always includes a highly structured, inflexible, with a great deal of not always uniform (can be differentially, See Animal Farm) regulations.  This reduces data, information, and knowledge creation to zero.

In the Digital Age it has a role akin to the business/finance concept of “the cost of doing business”.  A portion of the infrastructure can be identified as “a function that all people with a territorial organization use equally, that enables and supports the creation of value and wealth within the territory, and for which there is no possible way to create a competing function”.

There are really three sub-categories of Infrastructure Architecture, physical, security, and standards and policies.

10,000 years ago or more, the physical infrastructure consisted of building and maintaining the trails to fields surrounding a village and building and maintaining the walls around it.  Now the physical infrastructure has become highly complex.

Clearly, roads, bridges, tunnels, airports, ports, electrical systems, voice and data cable systems (i.e., telephone land lines and data lines) are examples of the physical infrastructure.  There is no indication in the US Constitution that the physical infrastructure should be included within the purview of government.  And there are examples of nongovernmental physical infrastructure architectures.

In the US railroads are examples of well regulated monopolies, while in Europe they are government owned and operated.  In the US railroads are privately owned, operated, and maintained.  And they have a good many governing rules, tariffs, and regulations about how these and even how much the railroads can charge for transporting products. 

Until the mid-1960s the US telecommunications infrastructure was also a “well run monopoly”.  Then the US courts broke it up.

Since the mid-1980s the US cable networks became examples of not so well regulated monopolies.  In the mid-1980s a whole series of very small cable companies contracted with local governments for monopoly rights to build out the local cable infrastructure.  They claimed, maybe correctly, that this is the only way they could afford to string the cable.

However, once they built out the physical network, they started bundling content that the customer might or might not want into packages.  So that if customers wanted all of the sports channels, they would pay for the home shopping networks and Spanish language channels as well.  Additionally, if they wanted all of the sports channels, then they pay for several premium packages.  Because they are a monopoly, they have been able to get away with this and for continually upping the package prices.

So far, there has been minimal governmental intervention and no competition.  However, this is changing and will continue to change, as I will discuss in part 5 of this series. 

Next there is the security infrastructure—everyone needs security to produce value and wealth.  It would include military for external security and police for internal security.  Security is the seminal reason for having a government to start with—much to the chagrin of anarchists.   Without external security—every man (and woman) for himself (or herself), it becomes who can wield the biggest club and impregnate the most women that will survive and perhaps prosper.

With the possible apocryphal exception of the prostitution, the oldest two professions were the farmer, who grew the food and the soldier who ensured the farmer kept enough food to survive; there being barbarians who figured out that it was easier to take food than to grow food.

For internal security there were judges who settled disputes and constables who enforced the judges’ decisions, if it came to that.  In fact, in the Jewish Bible, in the section of the history of the Israelites, there is a book entitled, Judges, that in a small way discussed how the judges operated in a period starting from  between 1400 BC to 1200 BC.

Then there is the standards and policies infrastructure.  These standards and policies define the way citizens and others within a territorial organization interact with one another.  Among the first things written in the Age of Writing were governmental laws, codes, regulations, and rules; witness The Code of Hammurabi.  Standards and policies define the “rules of engagement” for economic and social activities within the territorial/political organization.  In fact, I would submit this is what government is all about.

In the Age of Writing, this “political” role expanded to include a legislative function.  Initially, this was in some form of a dictator, usually called a King.  The King served in two political functions, legislative and enforcement.  Since, every dictatorial power has had these two functions.

The delegates to the US Constitutional convention understood this.  Consequently, they separated the functions of government into three branches, legislative, executive (executing the rules and regulations), and the judicial.  How this is supposed to work was included in the US Constitution, both in the preamble and within sections of the document.

The infrastructure architecture may also include other functions.  For example, education, that is, formal learning by listening came into its own during the Age of Print.  The reason is that printing allowed for the mass production of books.  Once Martin Luther insisted that all people read and interpret the Bible on their own, rather than accepting the “authority of the clergy”, there was a need to teach reading on a mass production basis; which consequently led mass education. 

In countries where there was and is mass education, the people create value, and therefore wealth, much more easily and create much more.  So most people believe that is the only way anyone can learn during the Age of Print and still do.  This “ain’t necessarily so” in the Digital Age as I will discuss later.

Another one of the “other” functions is Basic Research as opposed to applied research for development.  This may well be and will continue to be part of the infrastructure supporting the knowledge-base and therefore the economic-base of a country, that is, part of the infrastructure of a country in the Digital Age.

Commodity Products Architecture (Mass Production Architecture)

The second architecture is Commodity Products Architecture, which is the Mass Production Architecture as described by Adam Smith and discussed above. Beyond infrastructure, there will be products, systems, and services that don’t really lend themselves to mass customization. 

For example, screws, nuts, and bolts.  While there are a great variety of these, they are built to “must meet” standards, standard lengths, materials, sizes, thread size, and so on.  Since these are manufactured to standards, they lend themselves to the mass production process architecture.  They will always have economies of scale, thus barriers to entry.

A second example is agricultural products.  Despite what the “natural foolish foodies” think, all food eaten by humans today is GMO, even the organic.  For 10 of thousands of years, the process of human selection of crops to grow for their food has led to all plants being hybridized. And for thousands of years they have been hybridized to increase the grain’s flavor and the quantity produced per plant.

This last, when coupled with the industrialization of the farm, so as to feed ever greater numbers of people better food, has led to food being turned into a commodity with the same economies of scale and barriers to entry as any other mass production industry.

A third example is really raw materials.  This includes all of the ores, all of the petroleum products, sand and gravel, and lumber.  These will continue to have the Mass Production Architecture of the Age of Print.

Mass Customization Architecture (Services Oriented Architecture)

The third architecture is Mass Customization Architecture that will replace much of the current Mass Production Architecture in the Digital Age.  Most consumer products, systems, and services will use Mass Customization.  And so too will be any significant or high cost development activities.

There has always been Customization Architecture especially in the construction of large products, housing, ships, and so on, and expensive items, like jewelry, gowns, or armor.  And in most cases these still are.  However, the Mass Customization Architecture of the Digital Age will reduce the cost and time of production, while increasing the quality (My definition, which is a clarification of Phil Crosby’s definition of Quality is “Conformance to the Customer’s requirements).

The reason for consumer products is that Mass Customization enables and supports the implementation of products, systems, and services that meet a given customer’s specific requirements, rather than the satificing (i.e., sort of meeting their requirements) model of mass production.

Already, a person can upload pictures of themselves, choose the material, pay for the clothing and shortly custom fit shirts and dresses appear via UPS.  The next step will allow them to choose the style, neck line and so on, by viewing the virtual garment on their own image.  When they have found the perfect (meaning it meets all their requirements) they can order it.  As this method for buying clothes catches on mass customization will massively disrupt the clothing industry.

Likewise, building houses has almost always been about custom creation.  However, in the 1950s  builders , like Levitt, who built Levittown  NY, worked to find ways to replicate the mass production architecture of Henry Ford’s Model T. 

These builders attempt to use the Mass Production Architecture become more cost efficient in constructing houses.  They constructed a great many identical houses, even looking at ways to reduce the cost of wiring by nickels—I know I live in a  Levitt-built house—while barely meeting the building codes of the time.  They then sold the houses at enough less to attract a great many first time buyers.  Since, builders have been building subdivisions all over using a semi-mass production architecture.

However, in the Digital Age construction will be on a mass customization path.  Today, most houses in subdivisions are built on 3 to 5 different models with the customer being allowed to add many options.

Requirements and Mass Customization

The discussion above, proves that identification and management of requirements is imperative for successful Mass Customization Architecture; that is, “You can’t customize a product, system, or service to the customer’s requirements if you don’t know what those requirements are.”  However, right now nearly all suppliers are poor at helping the customer identify their requirements.  This leads to poor quality with many defects and an unhappy customer.  (aside: This is the reason I developed the prototype of a requirements identification and management tool, called CARRMA that I discussed in several other posts.)

Economies of Scale versus Economies of Knowledge

In the Digital Age with Mass Customization, economies of knowledge will supplant economies of scale in the creation and production of products, systems, and services. 

An example of this is carbon fiber for use in aircraft.  I was peripherally involved with the integration of two major US defense contractors.  At the time, one firm, with their finance engineering buried in Mass Production Architecture, built an internal carbon fiber laboratory for RD&T and prototyping of carbon fiber products.  The other built a laboratory for testing and prototyping products, but contracted with startups for the research and development of both for the carbon fiber and the resin formulations.

In comparing the output from the two efforts, the prototypes from the internal lab was of inferior quality and higher cost when compared with the one that brought several knowledge-based organization together.

Another example comes from steel production, one of the best known examples of Mass Production.  When Andrew Carnegie applied Henry Bessemer’s steel making process into his vertically integrated ironworks he created a cost efficient process for making steel.  Still today, steel plants are among the largest industrial facilities.

 Between 1955 and 1966 a company called Nucor Inc. created a knowledge-base steel company that went about creating mass customized steel products in small batches.  The chemistry of steel had evolved into at least dozens of steel specification, requiring very exacting combinations of materials at very specific temperatures.  Each specified steel had very specific characteristics and uses.  Large integrated steel works were not designed to create the small batches required.  Nucor used its knowledge and innovated methods and processes for creating these small batches.  It has ended up being one of the world’s largest steel producers.

This example demonstrates that the economies of knowledge and Mass Customization can and will out produce economies of scale even for products that seem to require economies of scale and mass production.  

Total automation of Product Manufacturing

Obviously, industry, especially in the industrialized world, is heading for totally automated production facilities. Again, let’s look at the steel plants.  The few that are left in the US now have fewer than 100 people employed, where in the late 1800s and early 1900s there were thousands.  The reason is automation.  Operationally, there are a few people sitting in an air-conditioned control room, but still many performing maintenance.   In the future there will be fewer maintenance personnel because the optional systems and equipment will become more and more self-healing.

Complex architectures

During the period of the paradigm  shift from Mass Production to Mass Customization Architecture for the creation and manufacture of products, systems, and services (and after) there will be an interaction among all three architectures.  The infrastructure (monolithic)  architecture will provide the physical and security infrastructure for all the organizations within the borders of a political unit, the commodity (mass production) architecture will provide those products that can only be produced cost efficiently at a large scale, while Mass Customization (Services Oriented) Architecture will provide and produce all products to meet the requirements of the individual customer/end user.

Looking Forward

In Part 4 I will some of the effects of the Digital Age and Mass Customization (SOA) Architecture on the individual.  In  Part 5 I will provide a number of examples of how Mass Customization, based on SOA, will effect a number of industries.

The Digital Future: Services Oriented Architecture and Mass Customization, Part 3A

From Parts 1 and 2

Part 1 discussed the four ages of mankind.  The first was the Age of Speech; for the first time humans could “learn by listening” rather than “learn by doing”; that is, data could be accumulated, communicated, and stored by verbal communications.  It also transformed the hunting and gathering into an economic architecture of small somewhat settled communities over the course of 300,000 years.   Settlement produced first significant increase in economic activity, wealth per capita, and in the academics in the form of the shaman for tribal organization.

The second, the Age of Writing, produced a quantum leap in data and information that could be accumulated, communicated, and stored.  This was over a period of at least 6,500 years.  During this time, academic activity evolved from everyone working to survive to a diversity of jobs and trades and the economic stratification of political organizations.   Again, the total wealth of humanity took a leap of orders of magnitude as the economic architectures of city states, then countries, and then empires evolved.  The academics evolved from the shaman, to priests, clerics, researchers, mathematicians, and universities (e.g. the Museum at Alexandria ~ 370 BC and the University of Bologna, 1088) and libraries.

The third, the Age of Print, started with Gutenberg’s press in 1455, but blossomed with Luther’s radical admonition that everyone should “read” the bible about 1517.  Suddenly, the quantity of information and knowledge to a leap of several orders of magnitude as all types of ideas were accumulated, communicated, and stored.
 

Part 2 dealt with history of Services Oriented Architecture (SOA) as it developed hand in glove with computing architecture—a natural fit.

This part, Part 3 A, deals with how SOA works with mass customization of products, systems, and services.  Part 3 B, will show where the three economic architectures, infrastructure, mass production, and mass customization will be employed in the Digital Age.

Mass Customization Using Services Oriented Architecture

As I will attempt to demonstrate, Services Oriented Architecture (SOA), while beginning its life as an architecture for computer applications, is really a new economic system that will supplant Capitalism as the economic engine.  That is to say, the prescriptive economic architectures of socialism and communism do not have the ability to create value; just redistribute it so that everyone is in the same economic class…destitute.

Mass Production Architecture

I’m positing that in the Digital Age mass customization will replace mass production for products, systems, and services.  This does not mean that mass production will go the way of the dodo.  In fact there will be three architectures, infrastructure, mass production, and mass customization.

Many times, many people may want and are willing to pay for the same or nearly identical items.  As Adam Smith discussed, the reason the mass production produced so much wealth is that mass production is cost efficient, or as many economists point out, there are economies of scale.  Economies of scale result from turning the process of manufacturing a produce into discrete steps or activities.
    

Adam Smith discussed this concept in the first chapter of An Inquiry into the Nature and Causes of the Wealth of Nations.  He showed how the same number of individuals could make an order of magnitude more pins per day when each one performed only one step in the process and repeated that step of each pin.
 

According to Adam Smith, once the process for creating a product is divided into discrete steps, many individuals will “figure out” how to create tooling to improve their step of the process.  While Adam Smith did not document this step, he implied that the business owner, the one selling the product and employing the personnel, would then purchase the tooling.  Again, the productivity of each worker using the tooling increases. 

Since Adam Smith’s time, economists have been fascinated with these two concepts.  The first Adam Smith called the “Division of Labor”.  The second has no name so I call this effect “process multiplication”.  The reason is that tooling increases the effectiveness of labor the way a gun increases the effectiveness of a soldier—the military calls this effect “force multiplication”.

The more tooling that is used in the process, the more the tooling costs.  The more it costs, the more product is produce (hopefully) and more cost efficiently.  This cost efficiency means the product costs less to produce.

Because the production process has been tooling intensive, it has also become capital intensive—tooling costs money and a lot of expensive tooling costs a lot of money (capital—hence Capitalism).  Actually, there is no such thing as Capitalism; it’s really mass production architecture.  Since it is capital intensive, anyone who does not have the money to purchase the tools can’t produce the product as cost efficiently.  This leads to both the concepts of Economies of Scale, (i.e., the greater the quantity of product you make, the better the division of labor and process multiplication of more tooling), and the Barrier to Entry caused by the need to have the money to buy the tooling to produce the product cost competitively.

The reason for this brief recitation of a significant portion of the mass production architecture is that for the near and mid-terms there will be certain sectors of the economy where mass production will continue to make sense—it will continue to be the most cost efficient architecture for producing a certain class of products.

The Day before Mass Customization

In the early 1990s, I worked with the Strategic Supply Chain Management (SSCM) Project.  The goal of this team was to find ways to improve the cost efficiency of mass production systems.  This included the development and implementation of products.  The reason for the formation of this project was to counter the gains in market share by the Japanese and other foreigners.

The team came to several conclusions.  First, Just In Time (JIT) manufacturing was an imperative.  JIT means that the subcomponents of a product are manufactured as they are needed for the assembly of a product in response to a customer order—all of this in near real time.  JIT means that warehousing costs are completely eliminated.

I had already worked on two projects of this type.  The first in 1984 and 85 created a paperless product line for a major office furniture company (The design of this line won the Society of Manufacturing Engineers Lead Award in 1987).  In 1986 and 1987, I worked on a program for the US Navy, called Rapid Access to Manufactured Parts, (RAMP).  It too, was using JIT concepts.

The SSCM team came to two other conclusions.  First, that standardized contractual clauses should be agreed to by contractor and subcontractor before any contracts are bid on.  In other words, there should be a team, built by and around the contractor to “go after” proposed projects.

Second, that a better customer requirements identification and management process is needed to effectively and cost efficiently manage a supply chain.  These are two items that are required for the digital age and mass customization.  While the first has gained a very small amount of traction, businesses in the US, at least, have paid no attention to the second.  Sometime in the near future it will become self-evident that this is a problem.

While the static and dynamic architecture of mass production, as described by Adam Smith, and incorporated into the US Constitution, has served the United States and the rest of the world well, it will be supplanted by the mass customization using Services Oriented Architecture in the Digital Age.

Mass customization is creating products, systems and services tailor-made to the customer’s requirements.  Actually, this was tried by the US automotive industry after WWII with limited success. In the 1950s and 60s the “option list” for automobiles was quite long.  For example, you could order a car only with power steering but not power brakes, with an AM or with an AM/FM radio.  Every option was individually priced.  So each customer could get a vehicle that met their exact requirements.

However, the Japanese took advantage of the inherent costs in terms of time to fulfill orders, defects caused by not meeting the customer requirements, etc., by reducing the costs of their vehicles and decreasing the delivery time through offering bundled packages of options, among other things.

Now, customers could only order a sun roof if they accepted a power seat on the driver’s side, even if they didn’t want because the seat was part of the bundle or package that include the sun roof.  In the future, this will not be the case.

Mass Customization

In the 1990s, I became a member of several international standards committees.  The first was the Agile Manufacturing Enterprise Forum, at Lehigh University.  Their definition of agile manufacturing was “an organization that has created the processes, tools, and training to enable it to respond quickly to customer needs and market changes while still controlling costs and quality.”  The team determined that this is accomplished by assembling a consortium of small organizations (businesses, consultants, and possibly academics).  This consortium would as a team on create products, systems, and services.

The next team that I joined, The Next Generation Manufacturing Project (NGM), elaborated on the consortium concept.  This project focused on how to create an agile manufacturing enterprise.  It concluded that there are two ways to create design/development/implementation/manufacturing consortiums.  These happen to be identical with the ways that programming languages were implemented in the 1960s and with the ways services are assembled in SOA.

The first method for assembling services into a program is called “Orchestration”.  Orchestration is gathering all of the needed software functional components together, then ordering and structuring them into the program that performs the task require by the customer.  In the older programming technology this would be called compiling a program; that is, converting all of the instructions into machine code before executing the program.

For mass customization, orchestration is assembling a team or consortium of small and entrepreneurial organizations, then creating the product, system, or service.  Because it’s mass customization and not mass production the team creates only one item.

Currently, one of the better examples of organizations that use the orchestration form of business architecture, are custom car shops.  In fact, there is one television channel where half its shows are of shops that create custom cars.  In these shows, a customer starts with something that was well used, badly abused, to complete junk.  The customer tells the custom car shop owner his or her requirements and the owner tells the customer the approximate cost.

When the vehicle, in whatever condition comes into the shop, the shop’s team disassembles it entirely.  They send all of the metal body components to a member of the consortium that functions as a “sand” blaster and epoxy coater, send the engine and other mechanical components to a shop that functions as the engine and mechanical parts rebuild center, send seats and other interior components to a shop that functions as the interior restoration and customization center, and tosses the parts that can’t be salvaged.

When the metal body comes back to the shop, generally, there is rust and damage, which didn’t show prior to the blasting that will need to be repaired.  Additionally, if the job is to “customize” as opposed to “restore” the vehicle a body shop function will need to change the bodies shape to enable the customization.    Frequently, this is the function of the shop.

If, for example, a fender is in too poor condition to be repaired, then the shop may go to a junkyard to find the part or may go to an organization that just manufactures metal components that are no longer available.  This is yet another function of the consortium.

When the body work is completed, the shop will send the vehicle’s body, sometimes it engine and mechanical components out to a paint shop; and if there are chrome parts, they may be sent to a shop specializing in chroming parts—two more functions of the consortium.  Frequently, for customized vehicles a new exhaust system needs to be constructed—yet one more function; and finally the vehicle is assembled in its restored or custom form.

Since these custom car shops (especially those with good to great reputations) have a fairly constant stream of customers, they can set up agreements (read contracts, with standard contractual clauses) as to who does what part of the work, the timeframes required, and the costs, prior to starting a job.  In effect, the consortium functions as a single unit, the way services assembled for execution function as a program.  So we could call this organizational architecture, the Orchestration Mass Customization Architecture.

The second method for assembling software services is called “Choreography”.   Choreography differs from orchestration in that the core organization—the one accountable to the customer for the product, system, or service—organizes the team on an as required basis.  At the start of the effort it does not have a consortium in place.  Instead, the core organization adds functional services as it deems necessary.

Most times, core organizations engaged in research and development or creative content activities use choreographic organizational architecture.  This would include research institutes, creation of exotic materials, the initial development of an entire new field of engineering, like ocean engineering or space engineering, and, most familiar to most people, the creation of entertainment content.

The motion picture and now the video content industry have long used choreographic organizational architecture.  To start, a “screenwriter” authors or adapts a story from a book to the “must meet” requirements for a video or movie; that is, that it fits within a time-frame, that much of the background of the story is told dialog and so on.

Once the screenwriter has a script, he or she will send it out to producers.  If a producer likes the script, that is, in general “make money”, he or she will assemble a team to produce the film or video.  This team is assembled as needed, not like the old studio system where a team has been preassembled. 

Actually, these days and going forward, more videos will be produced by “amateurs” using current and near future technology.  This is very likely going to undermine the entire “entertainment industry”.  This is the next step from the studio system, to customer centric entertainment.

The Three Economic Architectures of the Digital Age

In Part 3 B, I will describe how the three architectures that I have defined will work together in the Digital Age to provide unprecedented value to the largest number of people possible.