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Understanding On-Demand Manufacturing Pitfalls

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Introduction

This article will take an in-depth look at on-demand manufacturing.

The article will bring more detail on topics such as:

  • What is On-Demand Manufacturing?
  • The Importance of a Demand Environment
  • Disadvantages of On-Demand Manufacturing
  • On-Demand Companies
Boats

Chapter 1: What is On-Demand Manufacturing?

The manufactured demand definition, often known as on-demand manufacturing or manufacturing on demand (MOD), is a relatively new idea in the manufacturing industry. In an on-demand manufacturing system, goods are only produced as needed and in the necessary amounts. On-demand manufacturing is characterized by short production runs that are influenced by demand that cannot be met by traditional production. This significantly shifts how engineers and buyers work with manufacturers. The middleman plays a major role in the engineering and design process. In this section, we will explore the concept of on-demand manufacturing in relation to short run production, examining the benefits and challenges of this approach, as well as its potential applications in different industries.

On-Demand Manufacturing

The emergence of cloud-based platforms and technologies has altered the landscape for the manufacturing industry and offers quick turnaround on quotes and boosts supplier management productivity, and enhances order visibility throughout the supply chain – all managed in a convenient online platform accessible from anywhere.

ERP/MRP Implementation Consultancy

In theory, suppliers provide their available manufacturing capabilities and pair it with the immediate demand from buyers. This process allows for the maximum efficiency of resources. In many cases, on demand manufacturing is used as a substitute to promote offshore manufacturing and obfuscates its main principles.

On-demand manufacturing has become increasingly popular in recent years due to advances in technology and the ability to quickly produce goods on-demand. However, it seems common that many on-demand companies disguise themselves as local operations, when in reality some use international partnerships and actually outsource the work. This hidden outsourcing can result in several risks that need to be considered.

Short Run Production

To better understand on-demand manufacturing, it is important to understand short run production which is needed for manufacturing companies due to lack of production scale, overcapacity, or lack of capabilities. Most manufacturing is based on long term relationships with long term production runs. Short run production sometimes is required but it is difficult to find suppliers that would want to undertake all the costs associated with short run production issues. And thus, this process allowed manufacturers to charge more for their services and run times. However, there are many inefficiencies in securing manufacturers who can meet the immediate needs. On-demand manufacturing specifically addresses this inefficiency.

In an on-demand manufacturing system, the most efficient use is to process short run orders using sophisticated software that connects buyer requirements with multiple supplier availability. This efficiency provides great resource allocation to the economy by coupling engineering with pricing software for competitive selection. A price is quoted, and both the buyer and seller agree on it. The on demand site offering this service also serves as a middleman and executes the contract and charges a fee approximately 5-20% of the order.

Long Run Production-Conventional Manufacturing

Conventional manufacturing is a foundation of the modern economy, involving long manufacturing runs. This process involves mass-producing goods in large quantities using specialized machinery and assembly lines. Conventional manufacturing has been around since the first automotive assembly lines have undergone significant changes over time, particularly with the advent of new technologies.

One of the key advantages of conventional manufacturing is its ability to produce goods in large quantities at a low cost. By using specialized machinery and assembly lines, manufacturers are able to produce products more quickly and efficiently, thereby reducing production costs. This, in turn, allows manufacturers to offer goods at more competitive prices, making them more accessible to consumers.

Another benefit of conventional manufacturing is the consistency and quality of the products produced. By utilizing automated machinery and standardized processes, conventional manufacturers are able to produce goods that meet strict quality standards. This is particularly important in industries where product consistency is critical, such as the automotive, aerospace, and medical industries.

Conventional manufacturing continues to evolve with the times. Today, manufacturers are incorporating new technologies such as robotics, automation, and artificial intelligence to further streamline and enhance production processes. By doing so, manufacturers are able to increase production output and further reduce costs, while maintaining high levels of quality and consistency.

Chapter 2: The Importance of a Demand Environment

On-Demand Companies in a Contracting Economy

On-demand manufacturing faces many challenges in a contracting economy. One of the main challenges of a contracting economy is the decrease in demand for goods and services. In the on-demand manufacturing industry, this can lead to a decrease in orders from buyers, which can in turn impact the revenue of the manufacturer. To maintain their revenue, manufacturers may resort to cutting corners, such as using cheaper materials or sacrificing quality, to reduce costs. This can result in dissatisfaction among buyers, leading to strained relationships.

Competing With More Cost-Effective Traditional Manufacturers

Another challenge of a contracting economy is the competition among manufacturers. As demand decreases, manufacturers may compete aggressively for the limited number of orders, which can lead to price undercutting. While this may attract more buyers, it can also result in a race to the bottom in terms of pricing, leading to a decrease in the quality of the final product.

In a contracting economy, on-demand manufacturing sites may also face financial difficulties. As orders decrease, revenue decreases, which can make it difficult to cover fixed costs such as rent, employee salaries, and equipment maintenance. This can lead to layoffs, delayed orders, and even bankruptcy, causing additional stress on buyers who rely on the on-demand manufacturing sites for their business needs.

Material Delays Affecting the Just-in-Time On-Demand Model

Furthermore, a contracting economy can also impact the supply chain of on-demand manufacturing sites. Raw material suppliers may face financial difficulties, leading to delayed or incomplete deliveries, which can in turn impact the production schedule of the manufacturer. This can result in delays in the delivery of the final product, leading to unhappy buyers.

The Increasing Federal Interest Rates

The Federal Reserve's decision to raise interest rates may have significant consequences for the on-demand manufacturing industry. As interest rates increase, businesses may be less likely to invest in new products or technologies, and this could lead to a decline in demand for on-demand manufacturing services. This decline in demand could, in turn, result in a consolidation of on-demand manufacturing sites, as businesses seek to reduce costs and improve efficiencies.

As the market for on-demand manufacturing evolves, it will be important for all parties involved to carefully consider the risks and benefits of these services, particularly in light of the Federal Reserve's actions. While on-demand manufacturing can offer many advantages, it is not without its limitations and risks. For example, some on-demand manufacturing methods may have limitations on the materials that can be used, or may not be suitable for high-volume production runs.

Furthermore, as demand for on-demand manufacturing services declines, it is likely that there will be a consolidation of these services, which could result in higher risk levels for both buyers and sellers in this marketplace. As a result, it will be important for businesses to carefully assess the needs and requirements of their products, and to determine if on-demand manufacturing is the most appropriate approach, or if traditional manufacturing methods may be more appropriate.

In conclusion, the Federal Reserve's decision to raise interest rates may have significant consequences for the on-demand manufacturing industry. As businesses seek to reduce costs and improve efficiencies in the face of declining demand, it will be important for all parties involved to carefully consider the risks and benefits of these services, and to make informed decisions about how best to proceed.

Chapter 3: Disadvantages of On-Demand Manufacturing

Disadvantages of on-demand manufacturing include:

  • The Role of the Middleman
  • The Middleman Fee
  • Waiving Liability
  • Loss of intellectual property protection
  • Limitations in material options, fabrication techniques, and quality
  • Manufacturing Scalability Issues

The Role of the Middleman

The primary role of the on demand manufacturing site is to be the middleman in the transaction between the buyer and the seller. The role is to transact the relationship between the buyer and the seller for a fee usually set at minimum 5% of the transaction and is executed through the site’s software programs. The buyer and seller do not know each other and the engineering and quality standards are the responsibility of the middleman. The middleman also is responsible to collect all fees and pay all amounts due. However, the middleman indemnifies their operation in terms of any of the failures of the two parties. It's worth noting that not all on-demand manufacturing companies will provide all of these services. Some may focus primarily on connecting buyers with manufacturers, while others may be more involved in handling logistics, quality control, finance, engineering, etc. As with any business transaction, it's important for buyers to do their due diligence and research the specific on-demand company they plan to work with to ensure they understand the company's role in the transaction.

The Middleman Fee

The cost of the middleman fee is a significant disadvantage of on-demand manufacturing. On-demand manufacturing often requires the involvement of a third-party company to facilitate the production of goods. This can include manufacturers, distributors, or other service providers.

These third-party companies charge a fee for their services, which can significantly increase the overall cost of the product. The fee charged by these middlemen varies depending on the service provider, the complexity of the product, and the volume of the order. In some cases, the fee can be as much as 10-20% of the total cost of the product.

One reason for the high cost of the middleman fee is the additional administrative and logistical work involved in on-demand manufacturing. With conventional manufacturing, the buyer typically deals directly with the manufacturer, and there is no need for a third-party company to facilitate the process. However, with on-demand manufacturing, there is often a need for a third-party company to coordinate the production process, manage inventory, and handle logistics, which can add to the overall cost of the product.

Another factor that contributes to the high cost of the middleman fee is the economies of scale. With traditional manufacturing, the manufacturer can produce a large quantity of goods, which allows them to spread their fixed costs over a larger number of units. This results in a lower cost per unit. However, with on-demand manufacturing, the manufacturer produces only the quantity that is needed, which means that the fixed costs are spread over a smaller number of units, resulting in a higher cost per unit.

Moreover, the cost of the middleman fee can be particularly challenging for small businesses or startups. These companies often have limited resources and are looking for cost-effective ways to produce their products. The additional cost of the middleman fee can make on-demand manufacturing less viable for these businesses, especially when compared to conventional manufacturing.

Waiving Liability to the On-Demand Middleman

As the popularity of on-demand manufacturing continues to rise, it is important for businesses and individuals to understand the potential legal implications of utilizing these services. One particular issue to consider is the issue of waiving liability to the on-demand company.

When using an on-demand manufacturing platform, customers may be required to sign a contract (or agree to website or software terms) that includes a waiver of liability for the platform or middleman. This essentially means that the customer is giving up their right to hold the platform or middleman responsible for any issues that may arise during the production process. This may include problems such as delivery delays, defective products, or intellectual property disputes.

While this waiver may seem like a minor legal detail, it can have significant consequences if not carefully reviewed. By signing this waiver, customers are essentially assuming all risks associated with the manufacturing process. This means that if a problem does arise, the customer will be solely responsible for any resulting damages, rather than the platform or middleman.

It is important for customers to carefully review the terms and conditions of any on-demand manufacturing platform before agreeing to use their services. This includes carefully reviewing any liability waivers and understanding the potential legal implications of signing such a document. It may also be advisable to consult with a legal professional to ensure that your interests are fully protected.

In conclusion, it is important to carefully consider the legal implications of utilizing these services. Understanding the risks associated with waiving liability to the on-demand company can help customers make informed decisions and protect themselves in the event of any issues during the production process.

Loss of Control over Production

The loss of communication between buyers, sellers, and their engineers is another significant disadvantage of on-demand manufacturing. With traditional manufacturing, the buyer and the manufacturer have direct communication channels and can work together to ensure that the final product meets the buyer's specifications. However, with on-demand manufacturing, there is often a lack of direct communication, which can lead to misunderstandings and errors in the final product. It is even a bigger issue of the manufacturing being done overseas.

One of the reasons for the loss of communication is the involvement of a third-party company in the on-demand manufacturing process. This can create a communication barrier between the buyer and the manufacturer, as the third-party company becomes the intermediary between them. In some cases, the third-party company may not have the necessary technical expertise to fully understand the buyer's requirements, leading to a lack of clarity in the manufacturing process.

Another factor contributing to the loss of communication is the fast-paced nature of on-demand manufacturing. With on-demand manufacturing, products are produced in real-time to meet immediate demand. This means that there is often a tight deadline, which can result in a rushed production process and reduced opportunities for communication between the buyer, seller, and their engineers.

The lack of direct communication between the buyer, seller, and their engineers can lead to errors in the final product. Without clear communication channels, the manufacturer may not fully understand the buyer's requirements, resulting in a product that does not meet the buyer's expectations. In some cases, this can lead to the need for rework or even product recalls, which can be costly for all parties involved.

Additionally, when communication is lost, it can be challenging to address any issues that arise during the production process. For example, if the manufacturer encounters a problem that requires input from the buyer or their engineer, the lack of direct communication can make it difficult to resolve the issue quickly and efficiently.

Quality Control Issues

One of the biggest risks of outsourced production in on-demand manufacturing is the potential for quality control issues. On-demand manufacturers already have greater risk for quality control problems in comparison to traditional manufacturing, so moving the work to another part of the world introduces additional layers of risk. Companies may be unable to adequately monitor production processes and quality standards in foreign countries, leading to inferior products being produced. This can result in customer dissatisfaction and harm a company's reputation, even if the company is attempting to market itself as a local operation.

Loss of Intellectual Property Protection

Loss of intellectual property is another disadvantage of on-demand manufacturing. Intellectual property refers to the ideas, inventions, or creations that are the result of one's intellect, and it includes patents, trademarks, copyrights, trade secrets, and designs. In the on-demand manufacturing process, it is common for buyers to provide their designs, specifications, and technical information to manufacturers to produce their products. There is a need for businesses to take extensive measures to protect their intellectual property and prevent unauthorized use or reproduction.

The transfer of intellectual property from the buyer to the manufacturer can result in the loss of control over the design and the technical information, which can potentially lead to the theft of intellectual property. In some cases, the manufacturer may produce additional products without the buyer's consent, leading to a loss of intellectual property rights.

Furthermore, in the on-demand manufacturing process, multiple parties are often involved in the production process, such as the manufacturer, the third-party platform provider, and shipping companies. The involvement of multiple parties increases the risk of the loss of intellectual property as more individuals have access to the design and technical information.

Additionally, on-demand manufacturing often involves international partners, which can further increase the risk of the loss of intellectual property. Intellectual property laws and regulations can vary from one country to another, making it difficult to enforce intellectual property rights. This can lead to the unauthorized use of the design and technical information by parties in other countries, resulting in a loss of intellectual property rights.

The loss of intellectual property can have significant consequences for the buyer. It can result in a loss of competitive advantage, reduced profits, and damage to the reputation of the buyer. Furthermore, the loss of intellectual property can also result in legal disputes, which can be costly and time-consuming for all parties involved.

To mitigate the risk of the loss of intellectual property in on-demand manufacturing, it is essential to have a clear agreement between the buyer and the manufacturer that outlines the terms of the intellectual property transfer. The agreement should specify the scope of the transfer and the restrictions on the use of the design and technical information. Additionally, it is advisable to work with manufacturers who have a proven track record of protecting intellectual property rights and to conduct due diligence before entering into any agreements with them.

Limitations in Material Options

One major limitation of on-demand manufacturing is the range of material options that are available. On-demand manufacturers typically work with a limited range of materials, and they may not be able to offer the full range of options that are available with traditional manufacturing methods. This can be particularly problematic for industries that require specialized or exotic materials, such as aerospace, defense, and medical industries.

Another limitation is the fabrication techniques that can be used. While on-demand manufacturing has made significant progress in recent years, it still has some limitations in terms of the fabrication techniques that can be used. For example, some complex geometries or intricate parts may be difficult or impossible to fabricate with on-demand manufacturing methods.

The range of colors and finishes may be more limited compared to other traditional manufacturing methods. While there are many materials available, the range of colors and finishes is generally more limited compared to other traditional manufacturing methods. This can limit the range of aesthetic options available for products, particularly for consumer products.

Additionally, the availability of materials may be limited in certain regions or for certain on-demand manufacturing providers. Some materials may only be available from specific suppliers or manufacturers, which can increase costs and lead times for production.

Finally, the quality of on-demand manufacturing products can be a concern. While on-demand manufacturing can produce high-quality parts, there may be limitations in terms of the tolerances and surface finishes that can be achieved. For example, certain plastics may be unsuitable for high-stress or high-temperature environments. In addition, there may be variations in the quality of the parts produced, depending on the specific on-demand manufacturing process and equipment used.

Manufacturing Scalability Issues

Another potential disadvantage of on-demand manufacturing is scalability, or the ability to produce products at high volumes. While on-demand manufacturing can be highly efficient and cost-effective for low to medium volume production runs, it may not be the best option for businesses that require high-volume production runs.

One reason for this limitation is that the equipment used in on-demand manufacturing is generally optimized for low to medium volume production. For example, 3D printers and other on-demand manufacturing machines may not be able to produce products at the same speed as traditional manufacturing methods. This can result in longer lead times and increased production costs for high-volume production runs.

In addition, on-demand manufacturing may require more frequent maintenance or upgrades compared to traditional manufacturing methods, which can result in additional costs and downtime. This can make it difficult to scale up production quickly to meet changing demand.

Furthermore, some on-demand manufacturing methods may not be suitable for certain types of products, such as those that require high precision or a specific level of surface finish. In these cases, traditional manufacturing methods may be more appropriate and cost-effective.

Dependence on Foreign Suppliers

Outsourced production in on-demand manufacturing can also result in dependence on foreign suppliers, which can lead to several risks. Economic risks, such as currency fluctuations and changes in economic conditions, can have a significant impact on the cost of goods.

Additionally, outsourcing can make companies vulnerable to political instability in the countries where they are outsourcing, which can lead to production disruptions and delivery delays in either country.

Environmental Concerns

Outsourced production in on-demand manufacturing can also have negative environmental impacts, particularly in countries where environmental regulations are lax or non-existent. This can lead to negative impacts on local communities, such as pollution and the depletion of natural resources. Additionally, the increased shipping distances involved in outsourcing can result in a larger carbon footprint, even if the company is attempting to market itself as having a local presence. It may also be advisable to consult with a legal professional to ensure that your interests are fully protected.

In conclusion, it is important to carefully consider the legal implications of utilizing these services. Understanding the risks associated with waiving liability to the on-demand company can help customers make informed decisions and protect themselves in the event of any issues during the production process.

Chapter 4: On-Demand Manufacturing Industry Players

Some of the industry players in on-demand manufacturing include:

3ERP

One of the top firms for rapid prototyping is 3ERP. Specializing in CNC machining, vacuum casting, quick tooling, and sheet metal fabrication, 3ERP ensures that business designs and ideas become a reality in just a few days. Before their product is sent off for mass production, customers will have the chance to examine it in person to ensure that it is both functional and appealing. The knowledgeable staff at 3ERP also assists customers with every stage of product development, from design optimization to helping customers identify the best route for their particular manufacturing requirements. 3ERP prides itself on its expertise in rapid manufacturing, cutting-edge rapid prototyping technology, and an infinite variety of materials.

Fast Radius

Fast Radius is on a quest to improve logistics and production. They have integrated a Cloud Manufacturing Platform with their experienced workforce to make the entire process simpler and smarter. In addition, they are making their own new manufacturing technologies available so clients can make new things possible for the world.

Their factories offer production quality and speed on demand.

To assist customers in producing better components faster, Fast Radius has an established infrastructure. Customers always have access to the resources, experience, and manufacturing partners they require to successfully complete their tasks, thanks to US production centers, microfactories, and partners worldwide.

Fictiv

Fictiv provides clients with access to a wide variety of capabilities through a single, user-friendly platform to free up more time for design innovation and spend less time on part procurement. They are capable of:

  • CNC Machining: Tight tolerances and quick turnaround times for finishing as fast as two days.
  • Injection Molding: Steel tooling for production, delivered in as little as two weeks.
  • 3D Printing: Technologies including FDM, SLS, SLA, PolyJet, and MJF.
  • Urethane Casting: Quality parts production without the expense of tooling.

Hubs (A Protolabs Company)

Hubs have a huge range of production capabilities and support both one-off prototyping and low-volume production, thanks to the hundreds of manufacturers in their network. They take pride in being the go-to supplier for intricately shaped parts or highly aesthetic components.

Hubs works closely with suppliers who have a track record of producing high-quality products thanks to the efforts of their local and international procurement teams. Order parts are immediately put into production at the most competitive pricing because their global network offers practically infinite capacity.

All components are thoroughly tested twice after production: Once at their manufacturing partners' facilities and once again at the Hubs quality control center in either Chicago or Amsterdam. Parts are passed through customs and dispatched from their facility to their destination within a 24-hour period. All 3D printed components are made locally, and only the manufacturing partner performs inspections. These transport directly to their target.

JawsTec

JawsTec is a firm that offers services for metal fabrication, CNC machining, and additive and subtractive manufacturing. They make quick prototyping accessible to inventors, engineers, and company owners while supplying huge corporations with parts through high-volume manufacturing. With partnerships with organizations like Tesla, Apple, BMW, Ford, Delta, and SpaceX, to mention a few, JawsTec has been able to make components for a variety of sectors.

After submitting their 3D model file, buyers may get real-time pricing from their rapid quotation engines. They take great pleasure in their rapid manufacturing, with most orders having turnaround periods of 4-5 days. We have some of the top industrial machinery in the business, able to create the highest quality components, thanks to their partnerships with HP, EOS, and HAAS.

Katana

By fusing basic elements, manufacturers produce things that are more than the sum of their parts. And at Katana, they envision a world in which people value software just as highly as the things they create. As facilitated by Katana, businesses are utilizing a combination of D2C and B2B sales channels to bring their manufacturing near to customers instead of outsourcing it to distant manufacturers. These contemporary firms are moving past traditional mass production, thus they want an operating system that accomplishes the same.

Currently, Katana is the only manufacturing ERP chosen to be a Shopify Plus certified partner and has secured $16 million from prestigious international VC investors that, like them, believe the sector deserves more respect. That respect is all about relieving lots of pressure away from manufacturers. They accomplish this with first-rate customer service, simple onboarding, and company software that advances businesses rather than restricts them.

Kickr Design

One of the Southeastern United States' most rapidly expanding product design, engineering, prototype, and manufacturing firms is Kickr Design. Kickr Design provides free consultations and a free project estimate so clients can discreetly discuss their project with a qualified lead engineer and create the best strategy for getting what they need.

Protolabs

Protolabs' goal is to enable businesses to commercialize novel ideas by providing the world's quickest and most complete digital manufacturing solution. Protolabs takes pride in being one of the fastest sources in the world for rapid prototyping and on-demand production parts. Protolabs can produce commercial-grade plastic, metal, and liquid silicone rubber parts in a matter of days, thanks to their automated quoting and manufacturing processes. A manufacturing partner emerges as a result, helping companies hasten time to market and intelligently control demand fluctuations over the full product life cycle.

Thus, Protolabs leverages the digital market to:

  • Accelerate time to market
  • Quotes come within hours and parts within days.
  • Multiple design iterations are supported by quick manufacturing turnaround times.
  • Products are introduced to the market and development is hastened more quickly than before.
  • Create better parts
  • Each machining and molding quote includes a free automated design for manufacturability (DFM) study that identifies potential problems and offers quick fixes.
  • Application engineers are ready to talk about design issues and provide assistance.
  • The company offers a large collection of internet materials, including instructions, advice, and white papers.

Quickparts

They take pleasure in their capacity to satisfy their clients' manufacturing demands, regardless of the size or deadline of the project, as the creators of a comprehensive digital manufacturing platform that offers on-demand additive and traditional manufacturing services.

And their commitment to innovative technology and fresh materials confirms their position as SLA and SLS pioneers. They deliver manufacturing services at the pace clients want and the quality clients demand, backed by their heritage and thorough understanding of the sector.

Rapid Direct

On-demand manufacturing is made simpler and faster via Rapid Direct.

They provide on-demand, high-quality custom parts with expert prototyping and production capabilities. Online fast quotes, automated DFM analysis, and the delivery of high-quality parts all take place within seconds.

Rapid Direct can produce custom parts in huge volumes and on demand, and it can also produce parts with intricate geometrical patterns and demanding cosmetic specifications.

Choosing companies that not only have strong manufacturing skills but also quickly, effectively, and intelligently build complicated end-use parts is essential for maximizing the benefits of any on-demand manufacturing services. Rapid Direct meets these requirements.

Stratasys

Some of the biggest businesses in the world rely on Stratasys to help them stay one step ahead of their rivals. Global leaders in the automotive and aerospace industries, as well as cutting-edge medical startups and tech behemoths, can all operate more quickly, creatively, and affordably thanks to our tested technology. They offer decades of experience, consultancy, training, industry-leading printers and materials, end-to-end support, and workflow management.

Stratasys doesn't stop at the 3D printer itself because they offer end-to-end support. In addition, they offer a market-leading selection of materials, clever software integrations, and professional advice. Even items on demand can be printed for clients by their Stratasys Direct team.

Techpacker

Techpacker simplifies the process of creating samples enjoyable, simple, and inexpensive. How? by producing techpacks, a type of standard industrial document that firms utilize to grasp the precise specifications for a design. An online tool that enables budding fashion designers to quickly and accurately order samples from global factories With the aid of their technology, designers can quickly prepare their ideas or mock-ups for manufacture, collaborate with factories, and track progress.

They are not another factory-listing directory service but rather their goal is to provide the most cutting-edge collaboration tools possible, which can be easily used and connected with a variety of platforms. This enables designers to reliably rely on companies all across the world to produce high-quality samples of their innovative concepts.

Total Retail

For executives searching for the most recent information and analysis on the retail sector, Total Retail is the go-to source. Total Retail fulfills its objective to provide retail executives the knowledge they need to accomplish their jobs more successfully through various types of content and community-building activities. The content provided by Total Retail includes that of on-demand manufacturing.

Vogue Business

Launched in January 2019, Vogue Business is an online newspaper for the fashion business. They provide a really global perspective on the fashion sector by examining the influence of cultural trends and world patterns. Vogue Business is the top source of knowledge on how new technologies will influence how goods are produced, promoted, and sold. It does this by drawing on the thoughts of technologists, trend forecasters, futurists, and innovators in other industries.

WayKen

WayKen is a quick manufacturer and prototyping business based in Shenzhen, China. It specializes in rapid prototyping and low-volume production of plastic and metal components, offering a one-stop shop from prototype to production.

WayKen has consistently maintained a strong competitive advantage because of cutting-edge production technologies and a highly qualified staff. Their manufacturing services, which include CNC machining, 3D printing, vacuum casting, fast tooling, and injection molding, are tailored to client unique product design requirements.

Xometry

Users can instantly upload CAD models to Xometry Europe's Instant Quoting Engine to receive quotes and access a sizable global network of manufacturers. The largest custom manufacturing marketplace, Xometry, uses its own proprietary AI algorithms to match consumers with the best manufacturing demand solutions. From startups to Fortune 100 corporations, Xometry serves a diverse customer base by offering demand manufacturing and industrial supply materials.

Xometry 3D Parts

With a global network of over 5,000 supplier manufacturing facilities, Xometry can provide a wide range of capabilities, including CNC machining, 3D printing, sheet metal fabrication, injection molding, die casting, stamping, extrusion, assembly, and urethane casting, all while maintaining consistently short lead times. BMW, Bosch, Dell Technologies, General Electric, and NASA are a few of Xometry's clients.

Xometry’s Acquisition of Thomasnet

Thomas, a company focused on product procurement, supplier selection, and digital marketing, has announced that it would be acquired by the digital manufacturing marketplace Xometry (NASDAQ: XMTR). The $300 million purchase would enable Xometry to expand both its buyer and seller bases. Commenting on the acquisition, Randy Altschuler, the Xometry CEO said “Xometry and Thomas share a common mission of championing the digital transformation of the manufacturing industry, one of the largest sectors of the global economy and the foundation for innovation everywhere”. Tony Uphoff, the CEO of Thomas also stated that “In joining forces with Xometry, we’re uniting our products with the power of the Xometry marketplace so we can do even more for industry together.”

As of Q3 2021, Xometry reported having 26,187 active buyers, including over 30 Fortune 500 organizations. Now that it has its own internal marketing and data services, Xometry may expand the range of products it offers by including fintech and digital marketing items. This combines with the fact that it sells tools, which is unusual for a digital manufacturing marketplace, to make it a one-stop shop for products and services. In all likelihood, Xometry will end up becoming the Amazon of digital manufacturing. Additionally, Xometry provides raw materials and manufacturing equipment.

Zetwerk

With its patented project management tools, technology, and teams, Zetwerk's Production Operating System promotes automation, transparency, and quality throughout the manufacturing process. Regardless of the product, specification, scale, or location, Zetwerk can double production demands overnight. In addition, its partner facilities and global supply network allow for fast scaling up and down of production.

A global industrial network called Zetwerk seeks to maximize effectiveness, quality, and value. Customers can lower the cost of new and used production parts, maximize the number of suppliers, and complete high-quality production more quickly thanks to its manufacturing capabilities. With real-time information consolidated for clients across project levels, Zetwerk gives customers total control over ongoing projects.

Zetwerk Production

Additionally, consumers may easily access data on shipments, tracking, images of each project step, tax compliance, shipping documents, past-due or forthcoming payments, inspection reports, and in-depth analytics and insights into each stage of production. Zetwerk provides a wide variety of production solutions that guarantee the proper match for specifications at reasonable costs and lead times for everything from clothing to aviation engines. Zetwerk maximizes capacity, synchronizes capability, and transforms markets regardless of the demand for capital goods, consumer goods, or precision parts.

Chapter 5: Advantages and Disadvantages of On-Demand Manufacturing

This chapter will discuss the advantages and disadvantages of on-demand manufacturing.

Advantages of On-Demand Manufacturing

  • The need to keep raw materials and the products they are used to make virtually disappears with on demand manufacturing services. Brands can now directly meet consumer demand because orders are fulfilled when requested, as opposed to speculating on seasonal consumer demand and building inventory. The need to predict new product volumes or satisfy minimum order requirements is reduced to a minimum thanks to on-demand, which also enables businesses to avoid the expense of warehousing and divert staffing resources to other projects.
  • Brands that use traditional manufacturing must determine the demand for each product. This results in overproduction, particularly in the fashion sector, where fashions and trends can change quickly. Many products go to waste in landfills or are burned when they are not purchased. A loss of more than $100 billion per year can be attributed to the nearly 87 percent of wasted textile materials. On-demand manufacturing eliminates wasteful production since it enables businesses to generate only the products that customers order. In other words, cloud manufacturing businesses can establish a shorter, more effective supply chain.
  • Brands can outsource their supply chain management needs with demand manufacturing. This enables them to focus more on what they do best—designing, promoting, and selling—and less on logistics. Additionally, manufacturing on demand allows businesses of all sizes to quickly and affordably test out new concepts and designs. Due to the simplicity and effectiveness of production on-demand, small businesses and startups can enter the market quickly. On-demand manufacturing is a particularly effective strategy for scaling operations for companies in the garment and home goods categories, which have experienced tremendous growth over the past year.
  • The wants and personal preferences of end users differ greatly from their needs. Manufacturers can supply exactly what a customer wants in terms of numbers and specifications thanks to demand production. Contrarily, a customer's request for a personalized product is almost unattainable under the conventional manufacturing approach. This is because the hardware configuration in traditional production facilities is fixed, and making significant changes would be expensive. Additionally, employing a standard manufacturing setup to produce a small number of goods would be very inefficient financially. On the other hand, with demand manufacturing, a customer may quickly buy and receive even a single prototype, regardless of how complex it is, and have it manufactured.
  • Due to the high volume of products that are often produced, establishing a traditional manufacturing facility is quite expensive, with some machines costing millions of dollars. On the other hand, systems for manufacturing on demand can efficiently manage modest volumes that can be produced with far less expensive machinery. Small and medium-sized businesses can now establish small-scale manufacturing facilities.
  • The regular customer-manufacturer communication, quick turnaround times, adaptability, affordability, and operational transparency that are hallmarks of custom manufacturing have significantly increased the rate of technical innovation. Inventors and innovators can create items and have a single prototype made at an astonishingly quick pace and for a comparatively low price. The product can then be improved using the prototype, resulting in a swift time to market.
  • The number of fantastic items that hit the market every day has significantly risen because of CAD and on-demand production. Only huge firms could previously afford the costs associated with developing, testing, and manufacturing a new product.
  • Traditional manufacturers may not be able to give samples because their facilities are designed for large production, and prototypes developed by them can be very expensive. Using an on-demand manufacturer makes prototyping simple and adaptable, allowing businesses to swiftly iterate on concepts before going into production.
  • Instant quotation engines are used in demand manufacturing to estimate production costs. These fast quotes eliminate the back-and-forth involved in traditional production, which improves the client experience.

Additional Advantages

  • Small runs are more economical.
  • Improved communication between customer and supplier.
  • In instances where there may be problems, the lines of communication are readily available and accessible.
  • Since most on-demand manufacturing agreements are successful, the producer and customer equally share the success and the benefits.
  • One of the major benefits of on-demand manufacturing is better control of the process where the customer and manufacturer work as a team to ensure success.
  • A constant problem in manufacturing is changes in product design in the beginning or middle of production, which affects the cost of the product. Using an on-demand manufacturer makes it possible to halt production and initiate design changes or have prototypes produced in several configurations prior to the initiation of production.
  • When the on-demand process is being off-shored, products can be perfected, improved, adjusted, and finalized before being sent off shore.
  • On-demand manufacturing gives a customer a competitive advantage that cannot be found in any other form of production. The complete process from the initiation of an idea to the presentation of a product is controlled, overseen, monitored, and inspected such that the final product is ready for market without flaws or errors.
  • In many markets, the success of a product is dependent on how quickly it gets to market in order to beat the competition and ensure proper timing. On-demand manufacturing offers the flexibility and dynamics that can quickly get a product to market with the proper timing to meet demand, which is an essential component of on-demand manufacturing.

Disadvantages of On-Demand Manufacturing

  • Supply chain control - Since the platform handles the selection and management of the suppliers utilized for production, buyers and engineers employing on-demand manufacturing services give up control over the supply chain in exchange for quick turnaround and efficiency. Consider producing those parts internally or directly outsourcing the production to a supplier with whom a close, direct connection may be created and maintained if very tight supply chain control is necessary for the development of crucial parts.
  • Uniformity of quality standards - From one on-demand platform to the next, there can be differences in how well a network of suppliers they interact with has adopted a consistent set of quality procedures. While some platform providers, like Xometry, make a conscious effort to prioritize quality and ensure consistency with their manufacturing partners, others more closely resemble a middleman, supporting the buy/sell marketplace but paying less attention to the specifics.
  • Production volume - Demand manufacturing works best for introducing new products (NPI), from early prototyping to EVT/DVT/PVT, into bridge production numbers, up to 1 or 2 million units. It might be advisable to look for a more conventional contract on demand manufacturer specializing in very high-volume production supply chains for sustained production in larger quantities.
  • Service accessibility - Depending on the production step involved, there may be differences in the breadth and depth of services accessible from on-demand platforms; thus, choosing a platform that can deliver the necessary capabilities is crucial.
  • Giving an on demand manufacturer exclusive product information is part of working with them. A corporation may experience intellectual property theft or leakage due to insufficient security controls if the company doesn't enforce rules to protect that data. Businesses should be aware of the security steps on-demand manufacturing takes. Defined security rules should be in place to monitor who is participating in a project and what they do with any related information.
  • Businesses rely on suppliers to fulfill orders quickly with on demand production; thus, suppliers must be able to abruptly ramp up production. If not, businesses find that they are unable to meet consumer orders on time because the supplier is unable to do so.
  • Value added tax (VAT) is levied on goods and services at each stage of production from the manufacturer to the wholesaler, to the retailer, and consumer. It is a tax that has been implemented across the world in 170 countries and is an indirect tax that varies from country to country. VAT does not exist in the United States where sales tax, established by every state, exists. If goods are produced by an off shore on-demand manufacturing company, VAT may be assessed on several parts of the transfer and shipment of goods.
  • Cost savings are the main motivator for on-demand manufacturing since having other companies produce goods greatly reduces overall cost. The downside of the process is any type of interruptions, problems, or dysfunctions can cause costs to exceed the possible savings.

Nevertheless, the advantages of manufactured demand far outweigh its disadvantages.

Conclusion

Almost all on-demand companies are hybrid offshoring businesses.

On-demand manufacturing has become a popular solution for short-run production needs in various industries in a strong demand economy. Its benefits include cost-efficiency, faster turnaround times, and increased flexibility in product customization. However, as discussed, there are also notable drawbacks to this production model, such as the loss of communication between buyers and manufacturers, limitations in material options, and scalability issues. Moreover, the increasing federal interest rates could potentially affect the just-in-time on-demand model, leading to material delays and increased costs.

In light of these issues, it is important for companies to carefully consider their production needs and weigh the benefits and drawbacks of on-demand manufacturing. While it may be a suitable solution for short-run production needs, it may not be the most cost-effective or practical option for high-volume production runs. As the manufacturing industry continues to evolve, it will be interesting to see how on-demand manufacturing adapts to address these challenges and if it will remain a competitive option in the market.

Table of Contents

What is On-Demand Manufacturing?

The Importance of a Demand Environment

Disadvantages of On-Demand Manufacturing

On-Demand Manufacturing Industry Players

Advantages and Disadvantages of On-Demand Manufacturing

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