The Revolution In A Box

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Jacobs saw the potential--he hadn't forgotten everything he learned in the '80s--and offered an all-or-nothing deal to buy out Pyramid. It sounded like a deal with the devil. But Kirila knew he needed someone with deep pockets and a commitment to make VEC bigger.

By all accounts, the gamble has already proved worthwhile. For 25 years, the Genmar factory at Little Falls, Minn., has used the same caustic, grubby process to churn out Wellcraft and Glastron fiber-glass runabouts. Men and women in blue coveralls layer or spray fiber glass over each hull. Half-finished boats are scattered around the warehouse, overshadowed by stacks of used molds. The stench of styrene is overpowering. The manual layering process is so imprecise that each hull is different; imperfections have to be corrected by hand.

Next door, at a VEC test site that has produced 1,000 hulls in the past year, the air is clean. It's quiet. Three technicians in smart yellow shirts and blue jeans supervise two VEC cells. One man watches a monitor that shows injection flow, temperature and pressure levels. If something goes wrong, an alarm rings in Little Falls and at the VEC solutions center, 1,400 miles south. Kirila's experts regularly tap into the Little Falls plant via the Internet to adjust production settings and troubleshoot problems.

Every 35 min., each cell produces a new hull; next door it takes eight hours and at least twice as many people to finish one. Each completely recyclable plastic mold produces a dozen boats; next door it takes a mold per boat, and each year thousands of used molds have to be buried in landfills. Each VEC hull is so strong that Genmar has announced a lifetime warranty instead of the normal five years.

Next month Genmar will unveil the world's first automated boat plant at Little Falls, a sprawling 100,000-sq.-ft. facility that will turn out 10,000 boats a year. Jacobs has invested more than $30 million so far, but no matter. Says he: "This is game-changing technology, period." He and Kirila have been inundated with inquiries from competitors wanting a piece of the VEC action. Other calls have come from the likes of Ford, Volvo, Owens-Corning and Gulfstream. Household-products and construction-materials companies want in too. Elsewhere, advanced manufacturers like Rockwell are experimenting with remote engineering. Honeywell already offers remote monitoring for certain automated plants. Says Kirila: "VEC is just the first of many new operating systems to come."

The VEC process could reorder manufacturing because it allows low-volume manufacturers to cut retooling costs for new products. If the boatbuilding example is any indication, it could mean labor reductions of up to 50%. Most of all, it shows that intellectual capital can be transmitted anywhere to make anything.

"We've always had giant brick-and-mortar factories close to the source of raw materials or communication," says Richard Morley, one of America's leading manufacturing experts. "This kind of technology means we can manufacture at the point of consumption."