Today’s world has transformed into a more agile and on-demand environment, with new technology and supply chains altering manufacturing lines and processes that were more specialized to ones with the potential to be much more flexible.
Two trends are largely responsible for this development: global supply chains and agile or additive manufacturing strategies. Eric Hiller, the founder and managing partner of Hiller Associates, discusses each of these factors in great detail and determines how companies can suitably adapt to the extensive changes.
Previously, manufacturing revolved around machining (removing material from a block of something), fabrication (cutting and bending standard stock, while also assembling pieces into complex parts), and net form processes (where metals and plastic were poured into a molten state or shaped into a mold).
“Additive manufacturing processes” were introduced decades ago capable of growing parts from the ground up. Eric Arno Hiller says that initially these processes were perceived as being expensive and limited in the material properties that they could achieve. Therefore, these processes were substantially relegated to non-functional prototypes.
Every day now, new AM processes and materials are now appearing that are greatly expanding the field of additive manufacturing. Meanwhile, global supply chains have given companies options that sometimes make products much cheaper to manufacture overseas, even considering total cost of acquisition trade-offs.
As the Coronavirus has made painfully clear, one should not overestimate the stability of extended supply chains or be blinded by the dollar signs without considering risk. However, even before Corona, people were started to realize that with increasingly flexible and automated processes, nearshore or domestic production can be extremely cost-effective, Eric Hiller points out, particularly at lower volumes or when time is of the essence.
This need for flexibility to minimize Risk and the Total Cost of Acquisition has driven new manufacturing models, such as on-demand online manufacturing platforms. Competitors in this space include Xometry, Fast Radius, Protolabs, Fictiv, and others. Most of these on-demand manufacturing platform cover multiple processes, such as machining, injection molding, urethane casting, and several advanced additive manufacturing processes. They do vary in the processes that are covered and the source of their manufacturing parts, as some opt to do it internally while others utilize a network of suppliers.
Despite any differences, these strategies offer an intriguing value proposition to product companies, in that they will assist you with finding the ideal process for your parts that matches your material prerequisites, all at a notably lower cost and faster delivery time than the traditional means.
For these on-demand manufacturing companies to profitably serve their customers, they have developed innovative online sourcing interactions, Eric A. Hiller claims, a substitute for the customary in-person or on the phone alternative.
Sourcing is a complicated task, made more difficult when dealing with a set of ever-improving processes and the interaction is mainly being accomplished online in a self-serve manner. Therefore, the competitors within this space have constructed online platforms that are quite advanced. Eric Hiller says the goal of the online experience is to give whoever is sourcing a part fast and easy guidance into the following areas
These are complex questions, and in the traditional sourcing process, they are answered by technically savvy salespeople backed up with a set of application engineers to deal with the more technical questions. In the new online and on-demand world of manufacturing, these questions are now being answered with complex analytical software, running on the on-demand manufacturer’s servers in the cloud. These platforms analyze a 3D solid CAD model that is provided by the customer.
Relying on the person sourcing to interact so deeply with analytical online software drives a very different dynamic in the sourcing process. Specifically, the product development or engineering team needs to be much more involved, and the sourcing team needs to be much more technically savvy. For example, most purchasing agents do not know how to interpret complex design / DFM guidance on a part. Even if they do understand the feedback, they certainly do not have the authority to change the underlying design in the 3D CAD model. On the other hand, the product development and engineering team does not have the authority or the experience, typically, to sign off on what could be a very expensive spend.
Given these challenges, Eric Arno Hiller recommends the following to the online on-demand manufacturing platforms:
Eric Hiller believes that online on-demand manufacturing is a game-changing new way to source and manufacture. However, it will not be easy for many purchasing departments to gain value from it, unless they are willing to change their cultures and processes. To the profit and loss executives, VPs of Engineering, and Chief Procurement Officers at companies who are buying parts, Eric Arno Hiller recommends the following:
Manufacturing is being redefined by on-demand online networks of suppliers and additive manufacturing processes. This does not mean that traditional processes and sourcing interactions are going away. In the short and even medium-term, they will always be the preferred way to manufacture large volumes of parts with a stable design.
However, like all disruptive technology, additive manufacturing, and online manufacturing will continue to eat at the bottom of the use case stack for manufacturing. These new ways of manufacturing will become more and more viable every year and unless your company embraces them and changes its way of working, you will be disrupted.
If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.
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