On-demand manufacturing is a process that enables manufacturers to make parts as they are needed. This allows manufacturers to make spare parts or equipment only on request instead of storing them in warehouses, thus reducing a companies’ stock of parts in warehouses or even completely disposing of them.
On-demand manufacturing is especially useful to companies affected by the coronavirus pandemic as these are subject to the requirements of the re-purchase policy on reaching the minimum stock. Re-ordering to purchase materials on reaching the minimum stock provides added value to service providers who are obligated to maintain the continuity of production around the clock and cannot afford an emergency equipment shutdown for lack of spare parts.
The current supply chains have been established based on traditional manufacturing methods — in terms of approach and not necessarily technically — to meet the needs of large companies and industries. For example, if the spare parts are manufactured outside Saudi Arabia, the manufacturing and supply process is expected to take more than eight months, and this may force companies to store more than they need in warehouses. With the digital industry, on-demand manufacturing can reduce the time required to manufacture parts to two or three months by relying on technical and digital data that speeds up the on-demand manufacturing process.
The e-commerce giant Amazon has adopted the traditional manufacturing model but has employed and developed it to be more dynamic. Amazon has recently obtained a patent for purchasing clothes over the internet, and although the patent pertains to clothing, books and household items, the same business model can be applied in other fields, including manufacturing spare parts for various industries.
Optimizing the use of on-demand manufacturing services has many advantages, making it a more sustainable industrial choice for electricity production, distribution and transmission companies, water desalination, storage and distribution companies, oil and gas companies, mining, petrochemicals, land, sea and air defense industries, and others.
The advantages include downsizing inventory as the needs of customers are manufactured by using pre-recorded technical and digital data. This data is stored digitally, reducing the size of the inventory while adopting the principle of retrieval instead of storage.
Another advantage is a rapid-response system where the average periods of supply of mechanical spare parts in the industrial sectors will range between two to eight months, depending on the parts/operating conditions, specifications and materials, whether they are manufactured locally or abroad, and on the type of facility and product. On-demand manufacturing is done within two to three months from the moment of receiving supply orders to the delivery of materials to the beneficiaries.
A third advantage is controlling inventory management, where on-demand manufacturing companies provide support throughout the product’s life cycle by acting as a digital warehouse and providing customers with inventory management service for parts.
The digital industry aims to reduce supply periods and the costs of shipping products from the manufacturer to the customer by making all information available digitally.
Dr. Hashim Al-Zain
If there is a need for a limited quantity of spare parts, this could lead to delays in the supply periods using traditional methods. The digital industry aims to reduce supply periods and the costs of shipping products from the manufacturer to the customer by making all information available digitally.
A fourth advantage is no minimum production limit. Entities that follow the on-demand manufacturing policy have the capacity and flexibility to meet their customers’ requirements of low-quantity supply orders quickly due to the availability of ample options of qualified manufacturers on the database. On-demand manufacturing does not require companies to adhere to the minimum stock policy, and therefore the facility does not have to order more than it needs.
And lastly, it improves cash flow management; freeing up frozen money in the inventory and improving cash flow by using and spending it elsewhere will help increase revenues and, ultimately, grow the business.
When comparing the cost of traditional wholesale manufacturing with on-demand manufacturing, the cost of on-demand manufacturing is higher per unit. However, customers have fixed margins and know the profits they will reap for each unit sold. On-demand manufacturing helps them avoid the risk of having their equipment go out of service for lack of spare parts when needed.
The goal is to resort to a warehouse-management system through the Internet and digital technology instead of traditional storage, in addition to simplifying continuous efforts with the advancement in digital technology to raise the efficiency of performance. Through that we allow digital manufacturing to work as a digital warehouse for the beneficiary to save time and money.
• Dr. Hashim Al-Zain is co-founder and CTO of DarTec company. He is an entrepreneur specialized in reverse engineering, with 19 years of professional experience. He has a Ph.D. in mechanical engineering and accredited certificates in product development and project management.