Why On-Demand Could Be the Future of Manufacturing

We live in an increasingly on-demand world.

If you can remember a time before the Internet, you might also remember renting videos and patronizing record stores. If you’re a gamer, you might vaguely recall purchasing compact discs (or even cartridges or floppy disks) in oversized cardboard boxes from brick-and-mortar retailers.

Nowadays, most people don’t think twice about the fact that they no longer own physical copies of their entertainment, but the trend toward service-based models doesn’t end there. Meal prep deliveries—in which customers receive the exact ingredients they need to prepare a meal, no more, no less—are on the rise, and the Right to Repair movement is a direct consequence of the blurring line between products and services.

In light of these changes, and with so many companies aiming to becoming “The Uber of ____”, it’s worth pausing to ask whether a similar transformation is in the works for the manufacturing sector.

Will a service-based model become the dominant paradigm in the impending fourth industrial revolution?

On-Demand Manufacturing

The idea of offering short-run manufactured parts on demand has been around for quite some time—arguably as long as there have been blacksmiths. It’s appealing for the same reason as meal prep delivery: you get exactly what you need, exactly when you need it. For manufacturers, that means less inventory to maintain and reduced downtime due to machine failure.

Today, there’s a whole industry built around quick turnaround on-demand manufacturing services, including companies such as Proto Labs, Plethora, Star Rapid, Xometry, and 3ERP. Much of the growth in this industry can be attributed to the falling costs of 3D printing and the development of additive manufacturing as a production process.

The success of HP’s MultiJet Fusion printers with on-demand manufacturers is a case in point. The fact that UPS, of all companies, has been developing its own on-demand manufacturing network further reinforces the notion that on-demand is very much in demand.

Could this approach become the norm?

To find out, engineering.com spoke with John Kawola, President of Ultimaker North America, and Gordon Styles, President and Founder of Star Rapid.

The Changing Manufacturing Landscape

While Kawola acknowledged Proto Labs as a pioneer in on-demand manufacturing, he believes the key to the company’s success can be found on the Web rather than the shop floor. “What Proto Labs did differently was that they were one of the first to implement a quoting engine that allowed them to work with their customers,” he explained. “That worked really well because a lot of the cost associated with buying manufactured parts is the overhead of talking to the engineer, getting a quote, doing the first sample; all that back-and-forth means there’s a huge amount of upfront overhead. Arguably, the disruption that Proto Labs was able to act on was eliminating that overhead, and they’ve really succeeded in doing that.”

Nowadays, it’s not uncommon for on-demand manufacturers to feature a quoting engine on their websites. Indeed, it seems to be a trend in the industry. Along with Proto Labs, Plethora, Star Rapid, Xometry, and 3ERP all offer some variation of an online quoting engine.

On the question of whether the growth of 3D printing is leading manufacturing toward an on-demand model, Kawola was more equivocal:

“I think that’s hard to know, but all these new technologies—3D printing, robotics, etc.—are making that choice viable: setting up a lot of small factories around the country versus a few, big, centralized ones,” he said. “Companies can now choose whether they want to build one big factory or multiple small ones, based on their customers’ needs. They still have to weigh a lot of things to make that decision: how fast people want parts, how much inventory you want to carry, shipping costs, etc. Amazon used to choose where to locate warehouses based on cheap land, taxes, and labor. That’s still part of their strategy, but they’re also strategically placing them so they’ll be one day from everybody.”

Zero Lead Time

If you’re wondering whether manufacturing could shift to an on-demand model, you can confront that question head-on by looking at trends in the sector as a whole. But you can also take a subtler approach and ask what would have to change on shop floors in order for on-demand to become the norm.

Setting aside specific advancements in additive manufacturing and CAD/CAM software, the key enabler for on-demand manufacturing is lead time. After all, reduced lead time is a benefit that additive manufacturing and on-line quoting share in common. What would it take for manufacturers to offer significantly shorter lead times?

Styles had an intriguing answer:

“There’s a huge movement in, for example, CNC milling, turning, the whole CNC area, towards being able to make a one-off very, very quickly,” he explained. “For example, we were just doing 150 sets of an aluminum product with five parts, and we were given two weeks to make the lot. So there’s a move now to do something that’s somewhat illogical, which is to have 50 to 100 percent more machines than you need. So, when a big project lands, it can go right on the machine with no queue time. This is the big thing in manufacturing now: zero queue time. Of course that’s been the selling point for Proto Labs ever since it was founded in 1999.”

Zero lead time might sound unrealistic for most job shops, but, as Styles indicates, there’s a straightforward way to accomplish it: just add more machines. In a world where getting approval for new equipment is always an uphill battle, the prospect of increasing your production capacity by 50 or even 100 percent sounds impossible, but Star Rapid has found a way to make it work.

“Nowadays, you always need to have 50 to 100 percent more machines that you’ll ever need,” he said. “One of our key suppliers will even install them free of charge with a lock and a code. That way, if you need the machine, it’s already up and running. You just take the lock off, tell them, ‘I just opened up such-and-such machine,’ and then you get an invoice for the time the next morning. Even that supplier is riding this trend: they put machines in for us for free and when we need them, we just take the lock off and pay for it then. It’s all about having more machines than you need.”

Service-Based Manufacturing

A century ago, if you wanted a simple metal bracket, you’d need to find a millwright—possibly even a blacksmith—probably through word-of-mouth. Obviously, they’d need to be close by. You might have been able to call them up, but only if they had a working phone. You wouldn’t be able to specify your process and you’d probably be limited to three material options: high carbon steel, low carbon steel, or cast iron.

Within the next century, you’ll be able to sketch a design on a cocktail napkin, upload a picture of it and have dozens, if not hundreds, of quotes from companies from around the world. Add another day or two (maybe less) and your finished part, manufactured to your exact specifications, will be delivered right to your door. As a manufacturer living in such a world, why wouldn’t you opt to build more, smaller factories than fewer, larger ones?

Posted by:  Ian Wright for Manufacturing.com.