Is the Future “AWS for Everything”?

A theme running through my book is the idea that efficiency improvements, and the various methods for making products cheaper over time, have historically been dependent on some degree of repetition, on running your production process over and over again. Higher production volume means larger, more efficient factories. It means more opportunities to use dedicated, high-speed, continuous process production equipment, or to implement efficiency-improving methods like Design for Manufacturing or Statistical Process Control. It means more incentive to develop new, better production technology. It means more opportunities to fall down the learning curve. The list goes on.

If you’re only going to run your process once, or just a handful of times, these opportunities are considerably narrowed. It’s obviously hard to justify the time and effort it takes to design a really efficient production process or invent some new manufacturing equipment if that process is constantly changing.

An example of this playing out in practice is the different cost trends of cars vs. car repair. In inflation-adjusted terms, cars have steadily gotten cheaper over time. The cost of car repair, on the other hand, has steadily gotten more expensive, rising mostly at the rate of overall wages (and recently, even faster).

Much of this difference comes down to the nature of the processes at work. Cars are manufactured via a repetitive, high-volume process that spits out nearly identical models by the hundreds of thousands or millions. Car manufacturers can justify spending billions of dollars designing a new model of car and the process for making it, because that cost will get spread out over a huge number of cars. Repairing a damaged car, on the other hand, is different: for a given model, any given repair process will be run a much smaller number of times, or maybe only once (since cars might get damaged in accidents in unique ways). A repair facility will need to accommodate a huge number of different models and model years, each damaged in different ways. There’s much less opportunity to design an efficient, highly automated repair process.

There are some complications to this basic pattern — the Toyota Production System and its descendents were designed to get mass-production-style benefits for a much more variable production process by making that process more flexible — but they don’t change the fundamental logic.

Thus, for things that we can repetitively produce in very large volumes — ...