As a buyer, managing your company’s risks are a critical aspect of your job, and globalization has made that task more difficult than ever.
Challenges abound, including natural disasters, broken tools, poor or unacceptable part or product quality, and product obsolescence. Low-volume, on-demand manufacturing can help you to meet those challenges and reduce some of thee risks. Here’s how:
Think of the recent onslaught of natural disasters – tsunamis, hurricanes, floods and fires – that we’ve encountered over the past few years around the world, and the impact they might have had on your organization. Each impending natural disaster can result in downstream issues that affect your supply chain’s ability to receive supplies on time.
Add in some of the force majeure claims that you’ve undoubtedly seen from some of your extended supply-chain partners – things like increased regulations in China to clean up waste streams, plant explosions around the globe, or other circumstances that have left you with retooling efforts that make your supply chain that much more difficult to manage. Then there’s the more recent list of on-again off-again tariffs that were originally only on your critical raw materials, and might now include semi-finished and finished products as well.
Internal Risks Are Rising, Too
Beyond natural disasters, even if you have ensured that your organization’s supply base is globally diversified enough so these supply issues are still manageable, other problems can rear up. What do you do when your injection molding tool breaks, and it’s the only one you have because you couldn’t get the ROI you needed for the back-up tool? Or your receiving department rejects the second ocean shipment in a row because of poor quality? Or your sales department is product-pruning again, and you need to figure out how to balance your inventory for next year, so that you can avoid issues such as product obsolescence? Or your finance team is breathing down your neck and demanding to know why you have so much inventory?
Mitigating the Risks
Your job is hard, and sometimes you lose sleep, so you need as many tools in your tool kit as possible to help you be successful. Success for most buyers is measured by good purchase price variance (PPV), low inventory levels with high turns, and having the right inventory at the right time with quality products. So how are you supposed to manage all these challenges? Consider working with an on-demand manufacturer that’s willing to do low-volume work with the speed and quality needed to help mitigate all of these supply-chain risks.
Access to quick-turn, low-volume manufacturing opens your business up to the ability to make strategic decisions when it counts. Instead of having to wade through a lengthy production process, you can often have digital feedback on product designs in minutes and parts within days, in only the volumes needed. By tapping into a wide range of contract manufacturing technologies, including 3D printing (additive manufacturing), CNC machining, sheet metal fabrication or injection molding, companies can reduce supply-chain risk f by manufacturing parts only when and where they’re needed, quickly.
Opportunities to use this speed in low volumes include end-of-life products, new product introductions (NPIs), bridge tooling and more. For example, wouldn’t it be nice to tell your finance group that you are ready to inactivate all items on the obsolete list under your buyer code because you found an on-demand manufacturer that could provide most future demands quickly? Or how about being able to reassure the NPI group – which finally got around to solidifying its designs – that you can quickly ramp up your supplies within days, in the proverbial hockey stick chart, in order to meet the newly launched product demands? Bridge tooling is a great way to help move a product through the design phase quickly, while also having the ability to cover the time it takes to get a high-volume tool made and validated. Or, in still another example, you have the ability to make those 10 parts that the marketing team needs early next week for the trade show they just told you about. All of these examples could make you a supply-chain hero.
Today’s market demands are much more customized, forcing manufacturing to become more reactive. This low-volume/high-mix ratio is not the supply-chain of the past, where mass production was the norm. Some manufacturers still focus their capabilities to mass-produce products with high minimum order quantities (MOQs) and long lead times. Customization is changing how manufacturing needs to react, and on-demand manufacturing has the digital horsepower and speed to help you meet your mass customization needs.
Buyers have plenty to keep them up at night. Hopefully, though, on-demand manufacturing can help them sleep just a little bit better.
Todd Bauman is supply chain manager for Protolabs.