What’s on-demand manufacturing? How does on-demand manufacturing work?

This article will focus on the concept of on-demand manufacturing and its application to custom manufacturing. I will try to show you how on-demand manufacturing works,

This article will focus on the concept of on-demand manufacturing and its application to custom manufacturing. I will try to show you how on-demand manufacturing works, allowing buyers and engineers to place orders for a variety of mechanical parts through an on-demand manufacturing services platform. This results in immediate part pricing, DFM feedback, quick turnaround times, high visibility of order status, and instant part pricing.

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What’s on-demand manufacturing? How it work? 

On-demand manufacturing allows goods to be produced when and where they are needed. Traditional manufacturing is expensive, which requires large quantities of products to make and store in warehouses until they are ready for shipping. On-demand manufacturing is a more flexible and customizable option that allows you to create unique products.

On-demand manufacturing, also known as manufacturing on-demand, custom manufacturing, or cloud manufacturing. A system that allows products to be manufactured only when they are needed. This is in contrast with traditional manufacturing, which involves large-scale production and storage in order to be sold, distributed, and delivered.

Manufacturing on Demand (MOD) is a relatively new concept in the manufacturing industry. It is a revolutionary concept that allows buyers and engineers to interact with suppliers, especially when it comes to custom-fabricated products. Cloud-based platforms and technologies have changed the landscape of manufacturing. They can eliminate delays in quoting, improve efficiency in supplier management, and increase visibility for orders in the supply chain. All this is managed from a simple online platform that’s accessible from anywhere.

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On-demand Manufacturing vs. traditional manufacturing models

On-Demand Manufacturing vs. Traditional

Let’s start by looking at the on-demand manufacturing process and contrast it with the traditional approach used when requesting a custom-made part or product from suppliers.

On-demand manufacturing is different from traditional manufacturing in many ways. The traditional manufacturing model uses large quantities of parts and store them in an inventory for sale or delivery. Large quantities allow for economies of scale, which helps to lower unit costs. Can be spread fixed costs over large production outputs. 

This approach has the disadvantage that physical inventory must be stored and managed, increasing the overall cost. In some industries, where products have a short shelf life or are likely to become obsolete quickly, poor planning can lead to excess inventory that is not sold or disposed of at a discounted price to clear warehouse space.

Traditional manufacturers can present quoting problems, particularly for custom products. Buyers and engineers must contact suppliers to request quotations, then follow up with production questions and negotiate the price. On-Demand manufacturing business models can offer an instant quote to product developers.

Instead of manufacturing parts in large quantities and keeping them in stock, the on-demand manufacturing model is focused on producing what customers actually need. Customers can access the manufacturing process via a digital platform and cloud technology. Customers can order exactly what they need, which allows them to adopt a just in time (JIT) manufacturing strategy throughout their supply chain.

The on-demand model is based on a platform-based approach, transforming many aspects of the manufacturing process that have been frustrating for buyers and engineers.

Parameter Traditional Manufacturing Approach on-Demand Manufacturing Approach Sourcing approach: The buyer must source potential conventional manufacturing suppliers. The demand manufacturing platform uses existing manufacturing partners to fulfill the order.

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The Advantages of On-Demand Manufacturing

On-demand manufacturing has many advantages over traditional manufacturing

The advantages of on-demand manufacturing are evident from the above contrast. The platform centralizes and automates the communications between buyer and seller to the maximum extent possible. This eliminates inefficiencies and delays inherent in communication at every stage of the production process. It results in a simplified process with many key benefits, such as:

Quick turnaround on quotes – instantly – instant quote or within a very short time after uploading a CAD modeling. 

The demand manufacturing companies allow for dramatic reductions in lead times and better management of available resources among suppliers.

One point of contact who handles all aspects of the production process, improving communications

Agility – Having access to a prefabricated global supplier network provides buyers with agile production and the ability to shift critical supply chains production processes to other locations when needed.

On-demand platforms reduce overhead in the supply chain – buyers can avoid setting up a supply network for a new product by using an on-demand platform. The platform handles that process automatically, which lowers internal costs and increases headcount.

Customers can reduce inventory costs by reducing inventory. With quick turnaround times for parts and low minimum orders quantities (MOQs), buyers are able to minimize inventory, thereby freeing valuable capital for more productive uses.

Instant feedback on Design for Manufacturability (DFM), for each part, uploaded to the platform.

You can access a vast network of verified suppliers through one online source to provide a broad range of manufacturing services.

Flexibility when choosing between domestic and global production

The demand model allows transparent visibility into the production status

Access to all historical order data stored in the cloud, including 3D and 2-D files, inspection reports, and DFM feedback.

All suppliers within the network are subject to standard quality control procedures

Customers can reduce inventory costs by reducing inventory. With quick turnaround times for parts and low minimum order quantities (MOQs), buyers can minimize inventory, freeing valuable capital for more productive uses.

During the initial assessment of manufacturing partners’ capabilities, there should be clear communication of customer requirements to manufacturing partners. Demand services offer clear communication to customers and partners regarding the initial evaluation of potential manufacturing partners.

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3 Advantages of On-Demand Production 

Over the past decade, on-demand manufacturing (also known as cloud manufacturing) has emerged and is starting to revolutionize supply chain management. MarketWatch predicts that the global cloud manufacturing market will reach $112 billion in 2024 due to the rapid growth of eCommerce and changing consumer preferences. It is an astonishing 19.8 percent annual growth rate.

The on-demand model allows goods to be produced when and where they are needed. Traditional manufacturing is expensive, which requires large quantities of products to make and store in warehouses until they are ready for shipping. On-demand manufacturing is a more flexible and cost-effective way to create unique products.

There are many factors that have contributed to the rapid growth of on-demand production, including e-commerce. When the COVID-19 pandemic radically changed the e-commerce market landscape, the market was already steadily growing. Online sales increased 18% in 2019 and reached $709 billion in 2020.

E-commerce has revolutionized the customer experience by allowing customers to compare and review a greater variety of products. Consumers expect personalized products more and more. Brands can adapt to changing consumer demands by allowing them to meet the growing demand for small-batch and customized goods.

Many other factors contribute to the increasing adoption of on-demand production, such as decreasing printing costs, increased government support for the modernization of manufacturing industries, and rising consumer demand for handmade goods in mass-produced countries. Businesses also need to use cloud-based solutions to grow their manufacturing company’s productivity.

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 Lower the cost of managing and stocking inventory 

On-demand production eliminates the need for storage of materials and goods. Brands no longer need to guess what consumers will want each season and store inventory. Instead, they can meet that demand immediately by placing orders when it is requested. On-demand reduces the need for forecasting new product volumes and meeting minimum order requirements. It also allows brands to avoid the cost of warehousing and can direct staffing resources to other tasks.

 Reduce Landfill Waste and End Overproduction 

Traditional manufacturing requires brands to estimate each customer’s demand for each product. It can lead to excessive production, especially in fashion, where trends and styles can change quickly. Many items end up in landfills or are burned if they are not purchased. Nearly 87 percent of textile materials go unutilized, which amounts to more than $100 billion in lost opportunities annually. On-demand manufacturing allows companies only to produce what they order. That eliminates unnecessary production and environmentally damaging waste. Cloud manufacturing allows companies to create a shorter, more efficient supply chain.

 Streamline Operations 

On-demand manufacturing services allow brands to outsource their supply chains. This will enable brands to focus more on their core competencies, such as design, marketing, and selling. Companies of all sizes can also benefit from on-demand, as it allows them to quickly test out new designs and ideas in a cost-effective manner. On-demand allows startups and small businesses to go to market quickly due to its efficiency and ease. On-demand manufacturing can be a great way to scale your business, especially for businesses in the apparel or home goods industries, which have seen significant growth in the last year.

Limitations to the on-demand production model 

On-demand production requires less stock and requires less upfront investment. However, there is less margin for error. As any error could have an impact on the manufacturer’s ability to produce, manufacturers are more dependent upon their supply chains to keep their promises.

On-demand manufacturers are more vulnerable to supply shocks such as material shortages and sudden increases in the price of raw materials. While maintaining low inventories can be suitable for a manufacturer’s bottom lines, effective implementation of an “on-demand” model requires more coordination throughout the supply chain.

This often means that manufacturers need to invest in IT solutions as cloud-based technology that notify suppliers automatically when an order has been placed. This synchronized approach allows manufacturers the flexibility to scale production quickly and economically to meet consumer demand even when it is not expected.

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Questions

Does on-demand manufacturing have the potential to solve fashion’s waste problem? 

Not all products are “crowd-pleasers”. Manufacturing on-demand allows you to produce a product as soon as you know it will sell. For popular products, less waste equals more space in your warehouse and your retail stores.

Also, on-demand manufacturing saves a lot of money that could have been spent manufacturing products that are not used. Because they cannot manufacture products they haven’t sold, manufacturers can be sure that 100% of their products will be sold.

Why is On-Demand Manufacturing Beneficial?

On-demand manufacturing has the advantage that they don’t have to keep a lot of stock. They can increase production as necessary when there is demand. On-demand manufacturing may not meet the production needs of large companies that need to produce large quantities of products in a consistent volume. A business that is in such a situation would be better off investing in a traditional manufacturing process.

Because it is easier for businesses to forecast their profits accurately, on-demand manufacturing allows them to maintain consistent margins. On-demand manufacturing reduces the risk that a company will end up with excess inventory. This forces them to mark down costs or absorb the loss.

Also, on-demand manufacturing saves a lot of money that could have been spent manufacturing products that are not used. Because they cannot manufacture products they haven’t sold, manufacturers can be sure that 100% of their products will sell.

How does On-Demand Manufacturing work best?

On-demand manufacturing allows goods to be produced when and where they are needed. Traditional manufacturing is expensive, which requires large quantities of products to make and store in warehouses until they are ready for shipping. On-demand manufacturing is a more flexible and cost-effective way to create unique products.

The on-demand model eliminates the need to mark down products or offer discounts at the end of your selling season, which is especially useful if you have a no-discount policy. On-demand manufacturing allows you to produce the finished products that your customers want, which is both more efficient and saves money.

engineer-controls-robotic-arms-by-augmented-reality-industry-technology | What's on-demand manufacturing? How does on-demand manufacturing work?

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