Between evolving technologies and lean strategies, it makes sense that manufacturing would adopt an on-demand model. It’s known to unite the best of other models, like the streamlined operations from just-in-time, and the waste minimalization of lean. On-demand manufacturing specifically supports the shorter life cycles and mass customization we see in today’s supply chain.
There are a couple of things to keep in mind when evaluating whether this model will benefit you.
First, you need to consider this from the perspective of total cost of ownership. This complete picture of costs is a better measure of your ROI. Becky Cater’s article in rdmag.com, “How On-Demand Manufacturing Can Reduce Costs, Improve Supply Chain Efficiency,” gives an explanation of TCO and why you should pay attention to it:
“TCO takes into account the direct and indirect costs of acquiring and using a part or piece of equipment throughout its life cycle.”
Further: “One factor driving that trend is that supply chain costs likely are greater than most companies think, according to the U.S. Commerce Department’s Manufacturing Extension Partnership (MEP). Surveys indicate that using only purchase price—without taking total cost of ownership into account—can underestimate hidden costs by 20 percent, MEP has stated. That’s why, in the view of MEP and others, total cost of ownership provides a more complete and comprehensive measurement of visible and hidden costs. To help companies understand the cost of sourcing decisions—from labor costs to product quality to political and security risks—the Commerce Department launched an online tool known as Assess Costs Everywhere (ACE).”
Second, because of this model’s ability to quickly produce prototypes and quick-turn, low-volume production parts, it is especially advantageous for certain industries to use it:
- Medical device (both large corporations and the startups that support them)
- Small, innovative design shops servicing multiple industries
Depending on your industry and how you use this model, on-demand is touted for many benefits:
- Reduce cost and complexity of working with multiple vendors by using the same supplier throughout the cycle
- Instant quotes and easy cost modeling – Decrease non-value-added tasks like requesting and receiving quotes from suppliers; interactive online capabilities accelerate process drastically
- Reduce inventory cost by purchasing parts in the exact quantities needed at a given time
- No minimum order requirements
- Rapid, friction-free prototyping (3D printing is one way this is possible, which reduces lead times by 50% to 80%)
- Improve pilot production – when possible, using close approximations by substituting CNC molding or 3D printing for parts that will ultimately be molded expedites the process
Overall, successful use of this method will make meeting KPIs like on-time performance easier for manufacturers. This not only improves the success of these companies, but also helps grow the manufacturing sector in the US.
Industries like medical device, aerospace, lighting, and electronics can have unique packaging and shipping challenges. If you’re looking to improve the reliability and protection of your packaging to save money and better your client relationships, connect with Packnet. Our engineers are experts at custom solutions that reap long-term rewards. Call 952.944.9124 or email us at CustomPackagingSolutions@packnetltd.com.