Announced earlier this year, the Digital Manufacturing and Design Innovation Institute (DMDII) is a Chicago-based manufacturing hub that will bring together public, educational and private interests to accelerate innovation and reduce development time and costs. Learn how all manufacturing will benefit from the research and development based at this digital lab.

1. Digital Manufacturing and
Design Innovation Institute
William P. King
wpk@Illinois.edu
"I’m here to announce that we’re
building Iron Man…
Not really. Maybe. It’s classified."
—President Obama

2. $320 MILLION
$70 million cooperative agreement
with the U.S. DOD and matching
$250 million from industry,
academia, government and
community partners.
6 OF THE
TOP 20
Engineering schools in the
country, with more than 12%
of all engineering & computer
science students graduating
annually in the U.S.
220,000 Partners, and more, ready to
connect with the more than 185
small and medium sized
businesses that have joined
already.
MORE THAN 315
Local, regional, and national
organizations, community
colleges, and MEP networks
have committed their support.
The Partnership
500+ Companies
Committing to participate.

3. HISTORICAL MANUFACTURING
• Linear process through design, make, and deliver
• Commoditization of labor

4. TODAY’S MANUFACTURING
• Materials: Rising costs and supply
constraints
• Production Overcapacity: reduced
profitability
• Labor: Increasing costs globally, skills
gap
• Outsourcing: separation of designers
and makers has slowed innovation
• Barriers for Sharing Data and
Information: technology, skills,
incentives, security, trust, IP, standards

5. FUTURE MANUFACTURING
• Digital link between design and
fabrication
• Connected machines, factories,
and supply chains
• Transparency into supplier
factories
• Data aggregation, analysis, and
action across the product lifecycle
• Leverage the power of data
analytics and networks to do
more with existing resources

6. Manufacturing already generates more data than any other sector
Petabytes
Manufacturing
Government
Bankin
g
Communications and
Media
Retai
l
Professional
Services
Securities and Investment
Services
Healthcar
e
Educatio
n
Insurance
Transportation
Wholesal
e
Utilitie
s
Resource Industries
Consumer and Recreational
Services
Constructio
n
424
397
336
276
273
256
245
166
116
87
207
375
773
776
911
1,812
Annual new data stored by sector, 2010
1 Discrete manufacturing constitutes 1072 petabytes; Process manufacturing 740 petabytes
SOURCE: IDC; McKinsey Global Institute analysis

7. WHAT IS DIGITAL MANUFACTURING?
END OF
LIFE
REUSE
RECYCLE
END OF
LIFE
REUSE
RECYCLE
11001011
PRODUCT LIFECYCLE
AFTER-SALES
SERVICE
AFTER-SALES
SERVICE
110100100100011110110101011110111110
SELL &
DELIVER
SELL &
DELIVER
10101101101000010100100100101111011111010101111011111010111110
1111
FAFBABRRICIACTAETE
FAFBABRRICICATAETE
FAFBABRRICICATAETE
QQUUALAILFIYFY
01010100110101010110110101010010010010100100100011110101010111101111101011111011111010
ASASSESMEMBBLELE
10110110101010101000001101101110110110110101010010100100101111010100100011110101011110111110101111101111101011111011
FAFBABRRICICATAETE
000100101010111101010100110101100100111101101000100100011010101011011010101000101010110110101101001111011111010111110111110101111101111101011
DEDSEISGIGNN
101111011010011110111011010111011001110110010110100100011010101011011010101001001000111101010010100100100011110101111111101111101011111011111010111110111110101111101111
101011111
DATA ACROSS THE PRODUCT LIFECYCLE
DATA
INFORMATION
DECISIONS
VALUE

8. Utilization of high performance
computing to model materials,
products and processes to
enable “design with
manufacturing in mind”.
INTELLIGENT MACHINING
(IM)
ADVANCED ANALYSIS
(AA)
Integration of smart sensors
and controls to enable
equipment to automatically
sense and understand current
production environment in order
to conduct “self-aware
manufacturing”.
THREE FOCUS AREAS
ADVANCED MANUFACTURING ENTERPRISE
(AME)
Information systems integration
throughout the product lifecycle.
Digital links between design
and fabrication.
Smart factory and supply chain
management.
OPEN SOURCE PLATFORM
CYBER PHYSICAL SECURITY
DIGITAL
COMMONS Meet industry and national
An open source software
platform that enables
data aggregation,
analysis, and action.
needs for security, trust, and IP
protection within the
manufacturing environment.
CYBER
PHYSICAL
DMDII Technology Thrust Areas

9. DMDII Guiding principles
A
B
C
D
E
F
Start with the business need: Entire strategy is focused on how the application of
advanced manufacturing technologies can solve specific business problems
(i.e., “market pull” versus “technology-push”)
Build and cultivate a diverse, distinctive, industry-led team: Assembled
collaborative & committed team of advanced manufacturing firms across sectors,
large & small, public-private. Flexible models to allow everyone to participate.
Co-create the value proposition & strategy: Enlist the industry partners to define
the strategy, operating model, project approach to build buy-in along the way
Build an aligned industry roadmap: identifying a common set of problems across
partnership, and aligning on an industry technology and project roadmap
Bias to action… and creating demand: place a premium on speed and efficiency
in launch and operation, getting to tangible impact soon through demonstration
projects, which show what is possible and create demand for broader adoption
Self-sufficiency through impact: doing the above will yield a high-value institute,
that will create value – not just from membership fees, but from value it creates

10. Despite the recognition of importance for digital design and manufacturing,
most organizations feel they lack the necessary capabilities
14%
81%
Organizations
with "high"
digital
capability
today
Participants
indicating digital
ops is a critical
driver
of future
competitiveness

11. We surveyed decision-makers on where value will come from and their
current level of maturity
▪ The survey leverages a detailed library
of ~100 potential drivers of value
along the value chain… as well as
prompting for additional levers
New business
creation
Product
develop-ment
Sourcing Production Supply
chain Service End-of-life/
disposal
Example
Drivers
▪ Tracking
and vis-ualization
for the
"reverse
logistics“
supply
chain for
part
disposal
▪ Predictive
analytics for
field main-tenance
▪ Real time
product
use/tracking
in the field
▪ Real-time
data
collection/
analysis &
operator
feedback
▪ Advanced
quality con-trol/
analysis
for process
optimization
▪ Supplier
identifica-tion
&
selection
▪ Cost trans-parency
▪ Contract
compliance
▪ Collabora-tive
innova-tion,
i.e.,
crowd-sourcing
▪ Advanced
modeling
and simula-tion
tools
▪ “Smart”
products
that send/
receive data
during use
▪ New service
business to
leverage
data
▪ Joint plann-ing
and
forecasting
▪ Inventory &
working
capital
optimization
▪ Customer
demand-sensing
For each step of the value chain (with particular depth in manufacturing production), the tool identifies
a. The most important areas of opportunity in your organization
b. Current organizational maturity
c. Current improvement projects underway

12. Value will be derived across the full ‘value chain’ Importance rankings from
New business creation
Sourcing Capital
Quality
@ Cyber security
Marketplaces and web-platforms
& resource
produc-tivity
End-of-life/
Disposal
Produc-tion
Product
develop-ment
and
R&D
Supply
chain
manag-ement
Service
survey results
High Med Low
SOURCE: McKinsey survey of ~170 digital design and manufacturing leaders, DMDI

13. Value will be derived across the full ‘value chain’
“Where is the greatest value going to be derived along the value chain after implementation of digital
manufacturing solutions?”
31
Little/no value Considerable
45
39
32
38
31
38
35
36
29
27
30
30
18
49
33
29
35
24
27
19
21
19
23
19
14
12
4
-6
-11
-5
-12
-17
-23
-20
-24
-23
-24
-27
-26
-36
-32
-40
-37
-10
-7
-12
-12
-13
-17
-12
-18
-12
-17
-13
-35
Product design & development
Production (operations)
Production (capital productivity)
New "digital" business innovation
Research & discovery
Supply chain management
Service
Resource productivity & sustainability
Operations strategy & management
Collaboration platform
Human capital
Risk management
Sourcing
End-of-life/disposal
Modest
Significant
Product design, operations, capital productivity, R&D, and supply
chain management were highlighted as areas of greatest value

14. Successful digital leaders anchor their digital strategy back to clear sources
of value
Revenue
improvement
Higher product availability/up-time
Profit business
drivers
Cost
reduction
Product innovation & customer
satisfaction
Time to market
Revenue expansion of existing
Manufacturing & supply chain costs
(labor, material, overhead, G&A)
Product quality
Delivery and service performance
Higher
capital
utilization
Improved asset utilization
Reduced equipment investment
Increased inventory turnover
Fixed capital
Working
capital
Improved cash-to-cash cycle
For the processes and capabilities
that drive each branch, measures of
improvement include:
• Efficiency
• Effectiveness
• Speed
• Agility (ability to change for upside
benefit or downside protection)
• Risk profile

15. Little/no importance
Important
Very important
Most critical
Digital is starting a paradigm shift: from operations
as a cost & execution vehicle… to also an engine
for innovation & growth
“From a business metric perspective (e.g., cost, revenue), how important a driver
can digital design & mfg be in creating value in each of these areas?”
45
31
30
38
44
36
42
27
39
35
17
30
24
12
-17
-18
-27
-26
-15
Operations agility -4
Revenue expansion of
existing business
Product quality -4
-31
-23
-5
-7
-12
-5
-14
Product innovation
Time to market for
new products
Cost (manufacturing,
supply chain, capital)
Service levels
Revenue &
Growth drivers
Conventional
cost and
quality drivers

16. Organizations realize that technology creates no value…on
its own
Capability
Dimensions
Clear strategy, plan to drive
competitive advantage
Cascade strategy into a well-resourced
plan, with aligned
metrics & accountability
Skills and structure to develop
solution and extract value
Devices, apps and platforms
to deliver Digital initiatives
Information assets and
associated management

17. Example DMDII Projects bring together a collection of partners to solve a real
problem, with tangible impact... “market pull” rather than “technology push”
Sample of potential applied research projects Sample impact
Real-time
shop floor
advanced
analytics
1
Intelligent
machine
‘plug & play’
solution
2
Next-gen
product &
process
design
3
Reduce rework and
labor costs by up to
30%; $1MM over the life
of the vehicle per hour
saved in production
Reduce current 50%
scrap rate by half
Reduce total system
cost by 10-15%;
accelerate time to
market
• Team: Two top 5 US Defense companies, one leading European
aerospace company, two Top 20 engineering schools
• Bring mobile computing and advanced analytics to shop floor
decision-making, allowing real-time adjustments to complex vehicle
system assembly
• Team: Two major global industrial conglomerates, industry-leading
software company, two major manufacturing research universities
• Develop ‘plug & play’ hardware/software solution for adaptive
machining
̶ Allows machines to adjust based on unique shape of each
cast/blank part
̶ Interoperable across CNC machines
• Team: Major global aerospace company, Top 3 aeronautical
engineering school, state-Federal research partnerships
• Design refresh of helicopter engine; 2 core innovations
̶ Advanced analytics and modeling software: compare as
designed, as made, as assembled, as serviced data
̶ Collaboration software: real-time exchange & co-design

18. Sources of value from digital tech – voices of manufacturing leaders
“What will be the most important drivers of future value from digital design and manufacturing?”
• “Next generation product design with ability to
simultaneously model and optimize for:
• Manufacturability and reliability
• Affordability through lifecycle (including production
and maintenance post-sale)
• Reduce design/purchasing risk by testing
technology earlier and cheaper”
• “Moving to a growth vs. cost story:
• A new era post-commoditization with suppliers driving
to the next level of supplier collaboration
• Move from cost-focus to:
• New product introduction focus
• Speed to market focus
• Rapid prototyping and virtual testing”
• Connected customers with digitally enabled
products, sharing data with manufacturers in real-time
drives:
• Proactive steps to address potential quality issues
• Opportunities for new business models (e.g., selling
services)
• Informs marketing of key trends to react to
• “Manufacturing feedback loops back to design:
• Make-design link established
• 3D design capability reducing cost in the make-design
link and improve quality
• Product performance data feeds new product
innovation”
• “Ability to adapt to key system perturbations
• Improved macro forecasting
• Downtime reduction between product families
• Respond to changes in customer preferences
• Reduced design/manufacturing constraints”
• “Big data definition/standards, new interoperable
plat-forms, analytics, & best practice standards), to
drive:
• Production efficiency
• Response time to customer feedback (from
years/months  months/days)”
• “Ability to change/improve agility:
• Reduce non-value added change/rework
• Execute value-add changes quickly
• Allow for more experimentation
• Proactive measurement/adaptability”

19. DMDII Facility to Open February 2015