Industry Trends

How on-demand manufacturing can drive business results

By June 8, 2020
On demand business results Hero scaled

On-demand manufacturing is an operational model that calculates production volume based on actual demand, rather than on projections. This approach takes advantage of recent developments in manufacturing technology to make small-volume, customized production a cost-effective option for product teams and engineers.

During the 20th century, the traditional approach to manufacturing allowed for the mass production of identical or similar parts. Costly and time-consuming tooling processes meant that custom parts and short-run production were often prohibitively expensive, in part because manufacturers based their projections for material and tooling needs on anticipated demand to maintain profit margins.

However, advances in digital manufacturing (namely the emergence of additive manufacturing processes) have made it possible to economically create parts on-demand, making customization and low-volume production feasible. Manufacturers who incorporate these technologies and services will be able to grow their businesses in strategic ways.

There are other benefits to on-demand manufacturing, as well. For the manufacturer, the approach eliminates the possibilities of over- or underproduction, avoids the capital expenses associated with building in-house production facilities, and allows them to outsource their needs to dedicated specialists.

Here’s how the on-demand manufacturing model can strengthen a business’ bottom line.

Lower inventory costs

As mentioned above, the on-demand approach removes the reliance on forecasting demand to determine the necessary production volume. Following the traditional model, manufacturers need to maintain an inventory of raw material to be able to fulfill orders in a timely manner. However, one significant advantage of using additive production to drive on-demand manufacturing is that it eliminates the need to store both raw materials and final products.

For subtractive manufacturing processes like CNC machining, materials need to be cut into workpieces large enough to be shaped into final parts. Warehousing sufficient pre-cut blocks for production can quickly become expensive, and can create excess material if market demands change abruptly. The advantage of additive manufacturing processes is that they create parts layer-by-layer, eliminating the need for housing workpieces and many other materials, and saving manufacturers money.

Enabling greater customization

The on-demand model also allows for smaller production runs, creating more opportunities for manufacturers by making it possible to produce a wider range of products, including specialized parts, components for niche markets, or customized pieces.

Additive production methods are especially integral in enabling such customization; with additive methods, product teams have a more cost-effective means by which to manufacture parts or products for individual users, giving them the tools to branch into specialized market sectors — such as medical, where additive manufacturing can be used to create orthodontics, orthotics, or prosthetics. Further, the raw materials used for additive processes offer greater compatibility with various part designs than pre-cut workpieces — many of which do not offer the sufficient size or shape required to create specific parts.

These advantages often directly benefit businesses’ bottom lines. In fact, research from McKinsey indicates that product customization can increase sales conversions by 30% or more for retail businesses.

Faster production

It’s not impossible to use traditional or subtractive methods for on-demand services, but doing so presents a number of challenges for manufacturers. Processes like CNC machining or injection molding require significant tooling and preparation before production can start, which drives up costs and extends the production timeline. If traditional methods are offered on-demand, tooling and production configurations will need to be defined immediately so that production can begin as soon as possible, without design revisions or other setbacks.

Using additive manufacturing processes, manufacturers can begin creating parts as soon as the CAD file is finalized — there’s no additional lead time or costs required before moving to production. Updates to part design do not result in costly or time-consuming tooling changes, giving additive manufacturing another advantage over traditional manufacturing.

On-demand manufacturing is driving innovation

The on-demand model is making it possible for manufacturers and their customers to create small volumes of parts or components for niche applications that have previously been considered too complicated or prohibitively expensive. The model is designed to scale as demand shifts, which essentially means that no job is too big or too small. Adopting to an on-demand model creates the operational agility to seamlessly meet changes in demand. Consider that on-demand manufacturers were able to quickly pivot their operations toward creating 3D-printed personal protective equipment (PPE) to meet the unprecedented demands of the COVID-19 pandemic.

Fast Radius offers a full-service on-demand digital manufacturing platform and a network of experienced engineers and designers ready to serve as extensions of any product team. We offer a range of additive and subtractive manufacturing services, and our teams of experts work closely with customers to ensure that every part is optimally designed, produced cost-effectively, and delivered quickly. Contact us today to get started on your next project.

Visit our online resource center to learn more about the applications enabled by on-demand manufacturing. There you’ll find information about the manufacturing services we provide, the materials we use, and where you can find our work in the real world.

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