Digitalization & On-Demand Custom Manufacturing
There is a seismic paradigm shift ongoing in the manufacturing sector and it is set to revolutionize how things are done. The shortcomings of the current model of manufacturing supply chain are set to be mitigated using technology. And we are one of those technology companies working on this specific problem. This is our case for why we have to digitalize the Custom manufacturing supply chain.
Custom manufacturing is the process of manufacturing a unique product that is designed and engineered for a single customer order. Custom manufacturing usually entails a lot of estimation, planning, and management to execute well. And the “On-Demand” part means manufacturing only when it needs to be. And introducing digitalization into this sector by automating routing, costing and vendor selection processes, can change the industry dramatically into a more efficient one.
Difficulties with the conventional custom manufacturing
Manufacturing is an extremely fickle business. A lot of people are dependent on each other to be prompt to get the work done on time. And things can go wrong anytime. And both the vendors and customers are having difficulties finding business. Vendors hate machine idle time and too much dependency on a few customers. Customers have a hard time finding vendors who are capable of getting their orders manufactured fast and cheap. So, they often make do with the vendors who they know or ones who are close by. So, the entire manufacturing supply chain becomes provincial.
To sum it up
- Too much interdependency
- Difficulty in finding capable vendors
- Very high lead times
- Poor fit between vendors and OEMs
Why do we need Digitalization in custom manufacturing?
As I mentioned above, the main pain points of both the vendors and the customers involve a problem with finding the best fit between vendors and customers. A sophisticated data-driven algorithm – along with a sufficient number of capable vendors - which matches a given order with a vendor can do wonders for the custom manufacturing industry, as we have been witnessing that for the past year.
How can Digitalization change custom manufacturing for the better?
To put it simply, Digitalization can bring Agility, Robustness, Scalability, flexibility, and transparency to the supply chain. Let’s go one by one.
Agility, in manufacturing, is the speed at which a manufacturing firm can respond and execute the order from a customer. In a conventional On-Demand manufacturing supply chain, the standard RFQ to quotation time is around 4 days to a week. The rest of the process is almost always extremely uncertain. But digitalization and aggregation of the custom manufacturing supply chain can improve the lead times beyond the capabilities of any conventional supply chain. This is largely due to the availability of “data”. For example, we, at Custiv, have a proprietary routing algorithm that uses the data-points that we collected from the vendors to match a particular project with a specific vendor. Since we control all aspects of the manufacturing from material procurement to quality control, we can optimize the costs and lead time based on what the customer requests. And the economics of scale and network effect reduces the costs even further. This is what provides us the agility that the conventional supply chain so dearly wants along with optimized costs.
By Robustness, I mean the resilience of the supply chain to external variables. As I mentioned earlier, the conventional supply chain is fragile; things go wrong fast. An unexpected power cut in a specific locality can take the project off the rails. That’s how this stands currently. But digitalizing and aggregating the network increases the robustness of the system multi-fold. It all has to do with the alternatives available at hand to get one specific project done.
Scalability & Flexibility
The scalability and flexibility of a conventional supply chain will be limited because of the maximum possible vendors a company can have under its roof. Whereas a digital manufacturing platform, because of the availability of ready vendors, is extremely scalable. This is possible because of distributed manufacturing. Expediting projects is also feasible with this. For example, we, at Custiv, had a client a couple of months back who wanted to manufacture over 500 parts within ten days. It was not possible in their conventional supply chain, and that’s why they came to us. And we were able to execute that project well within the time frame by distributing the count to different vendors. And, as mentioned earlier, a data-driven algorithm can optimize costs or lead time based on the customer requirement. This is how a distributed manufacturing aggregator platform can be scalable and flexible.
The benefits here should be looked at in a two-fold way since we have two parties involved – the customer and the vendor. And any transformation must be beneficial for all parties involved.
What is in it for the people who want get their parts machined?
- Shorter lead times and optimized costs
- Immense scalability and potential to expedite projects by distributed manufacturing.
- Greater transparency, as a digital platform can be designed to allow the customer to track and follow through their order on every step of the process, like ours’.
- Finding the most appropriate and capable vendor for a specific project by algorithms.
- Ability to optimize project plan for low cost or low lead times.
What is in it for the manufacturing industry?
- A diversified portfolio of customers and consequently, a lesser risk for the vendor.
- Less dependency on legacy customers.
- Doing the projects which are the best fit for the company.
To wind things up, the digitalization of the On-Demand Custom manufacturing supply makes them scalable, agile, and flexible. A Digital platform can give speed, comfort, and cost savings to the customer and a constant and diverse set of projects to the vendors.
We, at Custiv, deeply believe that if there is a manufacturing requirement, then there is a highly capable vendor waiting to get the job done. It is all a matter of finding the right match. This where we act as a bridge between the vendor and the customer.