Using On-Demand Manufacturing to Control Market Demand, Inventory costs and Supply Chain in Your Business
Managing demand and supply in today’s booming economy can be quite tedious. As a business, you will have to use a number of data and metrics to produce and store inventory, constantly hoping for a fairly balanced market with no sudden spikes in demand, raw material scarcity and even supply deadlines.
As markets are less likely to remain stable, one of the ways that businesses manage to deal with mass manufacturing deadlines, procurement challenges and cost optimization is On-demand or Just-in-time manufacturing. With an on-demand approach, your business scan successfully scale through inventory and supply requirements by using the power of digital manufacturing suppliers like Firstpart.
On-demand manufacturing harnesses the digitization of traditional manufacturing services like sheet metal, injection molding, CNC machining, urethane casting and 3D printing to deliver your inventory parts just in time for assembly. In other instances, on-demand service providers can even help to produce mass units of your product in a matter of days. Let’s take an even deeper look at how on-demand manufacturing services can help manage your inventory costs and bolster your supply chain.
• Do away with MOQs
MOQs refer to Minimum order quantities. This is the lowers level of part you can order from a supplier before they can proceed with your order. Minimum order quantities help the supplier to ensure that they don’t run at a level where production is not optimal; It keeps them from executing orders that would otherwise be cost-inefficient for them.
One of the benefits of on-demand manufacturing and just-in-time production is the lack of MOQs. When you chose to get your parts on demand, without MOQs, you get to effectively manage your inventory, market volatility and demand spikes. You are not obligated to run more units of a part that you do not really need just to help traditional suppliers meet their cost-savings.
Consequently, you can lower your production and inventory costs to cover only what is needed and put the extra funds into other aspects of your business.
• Gain access to mass customization
On-demand manufacturing allows you to enjoy mass customization and meet customer demands that require a personalized effort because of the inventory flexibility. In traditional mass manufacturing, companies stock a mix of high-volume standard materials and low quantity customizable parts. With the just-in-time approach, customer orders that can easily be customized without any fear of overstocking the warehouse with specialized parts that may only be required in small units. With digital manufacturing, production processes that need a bespoke part can be turnaround quickly by having suppliers to manufacture the exact part tailored to specifications. This way, companies can do away with the need to become highly reactive and meet design customization needs seamlessly.
• Lower inventory costs
On-demand manufacturing helps to lower inventory costs as businesses do not need to stock up on parts and spares unnecessarily. This way, warehouse costs can become non-existent or significantly minimal because all your parts are manufactured just-in-time for their end use. With on-demand manufacturing, you don’t need to incur storage cost. You also mitigate the risk of having excess inventory when an order is cancelled.
When you chose on-demand manufacturing, the cost of managing your inventory becomes reduced. You can avoid the stress of haulage costs, arrangement challenges and shipping charges. Shipping directly from your on-demand supplier can also optimize your supply chain and help to ensure speedy delivery.
• Instant quotation and Rapid Prototyping
On-demand manufacturing services allow you to get instant quotation for your projects and take advantage of rapid prototyping. Through technologies like CNC machining and 3D printing, you can prototype and test your project one piece at a time before deciding to spend more money on your idea.
The lack of a minimum order quantity means that you can produce one prototype at a time, showcase on your platforms and get feedbacks. The result of your feedbacks will inform the need to prototype another design or proceed with what you currently have at hand.
• Eliminate waste
On-demand manufacturing can help businesses eliminate waste and manage space. First, by ordering for parts only when the need arises, businesses are no longer faced with finding ideas on how to offload excess inventory. This means no more discounted sales just to rid your warehouse of the leftover materials.
• Improved cashflow
On-demand manufacturing allows you access to improved cashflows by freeing up monies that would otherwise be tied down by overstocking on inventory. With just-in-time manufacturing techniques, you can always apply your cash into more sales, marketing or investment options that will grow your other income and consequently grow your overall revenue.
• Seamless shipping and logistics
When you choose to use an on-demand manufacturing solution for your business, you get to benefit from the rich supply network that suppliers have at their disposal. This can help you beat material sourcing, shipping and logistics challenges by relying on a digital manufacturer that handles every process to get your order fulfilled.
From material order, inventory management, packaging, shipping and delivery, on-demand manufacturing can help you save cost and optimize your supply chain all at once.
When to choose On-demand Manufacturing
On-demand manufacturing is a veritable business model that comes with numerous advantages. However, in some instances, mass production could be a better option. When then do we choose on-demand manufacturing?
• Seasonal or exclusive goods
On-demand manufacturing is perfect for producing seasonal or limited collection goods that will only stay trendy for a period of time before the demand crashes. With on-demand production, you can use historical sales data to estimate the quantity of the product you will sell and get a supplier that can manufacture efficiently for you just-in-time to hit the shelf for the season.
• Start-up businesses
On-demand manufacturing is perfect for new businesses who do not know what market reception, demand and sales will look like. With on-demand manufacturing, startups can avoid the pitfall of overproducing and underselling by taking orders and fulfilling them just as they come.
• Market testing
Both new and existing businesses can create new brands and test waters without committing significant time, effort and financial resources. This helps to mitigate the risk that may arise from a failed product design or products with low customer acceptance scores.
• Heavy production parts
Just-in-time manufacturing is very efficient for the production of heavy parts, machineries and equipment such as cars, boats, trucks and more. Popular automobile manufacturer, Toyota, uses a just-in-time system that it describes as critical to its business model.
The on-demand system helps Toyota to manage its inventory cost and drive manufacturing efficiency while reducing response time from suppliers. According to Toyota’s website, the “use of JIT within the Toyota Production System means that individual cars can be built to order and that every component has to fit perfectly first time because there are no alternatives available.
Partner with First Part in 2020
As 2020 arrives, enter into a productive partnership with FirstPart and take advantage of our expertise in production to bring all your projects to life in the new year. As a company dedicated to excellence and improvements, we have already begun and continue to scale up our production capacities to match new demands, innovations and developments in CNC machining and 3D printing.
We also offer many diverse solutions for just-in-time manufacturing and on-demand manufacturing that allows you manage your inventory efficiently. Our digital manufacturing and on-demand manufacturing service allows you to contact us and submit your design for project virtually. Our investments in new machinery also means all our clients will get to enjoy faster production at reduced rates, more precision, accuracy and even more diverse options for low-volume manufacturing.
Click here to get in touch with us now or click here to request a quote for your projects.