For manufacturing companies left with unsold, dead inventory, can an on-demand model be the long-awaited solution?
What do you picture when you hear the word “manufacturing”? Complex machines in giant warehouses produce thousands and millions of the same product that moves on the conveyor belt, waiting their turn at every station.
For a long time, the invention of the assembly line was the most influential and successful in manufacturing history. While many industry leaders and research analysis reveal that manufacturing is a declining economic sector, experts do not believe so. They opine that there will always be consequences and complications, but with every new approach, process, and invention, the economic graph will climb. On-demand manufacturing can create a massive impact across sectors. MarketWatch research predicts that the on-demand market will grow at a rate of 20 per cent and hit $112 billion by 2024.
Traditional vs On-Demand
The conventional manufacturing system uses programmable machines that produce goods in mass quantities, according to the fixed set of parameters. The large volume of goods needs a vast storage space, which only large scale manufacturers can afford. On the other hand, even if a company manages to equip mass manufacturing, it’s unlikely to adjust the parameters to make customisable options. Not a flexible process, but businesses worldwide have managed to work around it for years.
With on-demand manufacturing, it will be easy for companies to create small inventory, from a single unit up to 1000. The system can also lessen the storage of raw materials, allowing reduced costs. It can be beneficial for SMEs and startups who want to experiment, create prototypes, and customise them according to customer demands.
Many local brands outsource their manufacturing process, which results in mass production and transport costs. With an on-demand process, it is increasingly possible to manufacture locally, with a shorter product lead time. A good strategy for businesses to understand their sales and minimise their losses is by placing small orders locally, selling them to B2C or B2B customers, and analysing feedback and other insights. Informed decisions based on these results can strongly impact business growth.
With limitless possibilities and solutions, the on-demand ecosystem can improve business conditions in several sectors.
The Saviour of the Fashion Industry
The most promising results of on-demand manufacturing are expected to be seen in the fashion industry that has always been at the centre of ethical controversies. Ellen MacArthur Foundation reveals that 87 per cent of textile raw materials get dumped in a landfill or incinerated. With over 87 per cent of wasted materials, more than $100 billion worth of products fails to see the light of day every year. A lost opportunity.
Additionally, designers and manufacturers need to lay an estimate of customer demand and seasonal stock inventories and stock their storage warehouses. Many a time, companies are left with unsold, dead inventory. Wastage is an ever-standing problem, and the on-demand model can be the long-awaited solution.
Let’s create a scenario for better understanding. A fashion brand reaches out to customers for orders. Once received, specific instructions are sent to the manufacturer. The manufacturer can send it directly to the customer or the brand that will send it to the customers. The end result, no wastage.
Another problem with bulk manufacturing was product quality. Seasonal wear and trending designs or materials always demanded quick produce, which quickly resulted in underwhelming quality and many defective pieces. On-demand manufacturing can definitely minimise quality issues.
Designers and retail brands are beginning to shift ethics and economy to fill the first two spots of their priority list. Meanwhile, independent designers have a better chance at achieving success with on-demand manufacturing as wholesale designers are still under pressure to deliver seasonal bests.
Last year, Ralph Lauren was one of the first major brands to adopt on-demand. It churned out custom packable jackets made from recycled nylon and polyester fabrics received with much excitement globally. Meanwhile, New York-based brand Prabal Gurung stated that 25 per cent of its orders follow the made-to-order process.
Experts reckon that the new process might improve relations between designers and manufacturers. Offering higher cost orders with more time results in fewer seasonal workers and better ethical hiring practices.
For aspiring designers, on-demand manufacturing is a success-driven tool. It does not require massive start-up capital. Despite the slower process, the revenue growth might be faster as customers have also begun to be mindful of ethical fashion.
Also Read: Is AI Restyling Fashion?
Breaking Down the Technology
An old-school mantra stands true even today. Every decision taken at the beginning of a process has the maximum impact, almost 70 per cent, on costs, the development process, and the outcome. Experts reckon that the impact may be greater with on-demand manufacturing as the supply chain is shorter and the right use of technology can produce efficient results.
UnmadeOS is an operating platform that allows retail brands to help connect customer demands with product and production. Brands can design and manufacture through their OS.
Aside from automation, several software systems can significantly improve on-demand processing. There are lightweight 2D design tools such as CAD to heavyweight CAD solutions that are more expensive but help with the full development of complex productions.
A tech solution, Techpacker, can help companies facilitate the design and order details and then send the required product model to the manufacturer. This is possible through their tool Cards with an interface built especially for brands to create their on-demand details.
Although the concept has been around for over a decade, it has only caught worldwide attention. The reduced costs of 3D printing and demand for customised, limited edition artisan products in the mass-produced fashion industry has also helped popularise the approach.
Sharecloth is a retail software company that adopts cloud-based technology to help businesses easily leverage the on-demand process. Using 3D models of products and custom orders can be placed from the website.
Eliminating the lengthy trial and error process is simulations. They are a vital element of any 3D printing system that serves a purpose at the initial production stage. It can visualise the geometrics of the products and present possible design faults and deformities that might arise in the printing process.
Several eyewear brands use AR technology to allow customers to view simulations of themselves in different pairs of glasses.
With on-demand manufacturing, the technology is taken a step further. For instance, Topology, an augmented reality application, builds a 3D model of the customer’s face with a chosen pair of glasses. It then converts the design into code and feeds it to a CNC machine. Based on the results, the eyeglasses are custom made to perfectly fit the customer’s face and delivered within two weeks.
Complications are Unavoidable
With smaller stock and lower initial investments, brands cannot afford to levy a large margin of error. The manufacturer becomes more dependent on supply chains to stick to their timely deliverables.
In some cases, even the supply chain companies are helpless. Supply shocks from material shortage to sudden price hike of raw materials can affect the entire cycle of on-demand manufacturing. Although maintaining a minimal inventory is ethically good, every cause of delay can hurt the implementation of the process.
Good coordination is key to establish a seamless process. Manufacturers can invest in IT solutions for effective two-way communication with the supplier and the customer.
Social Media Aid
According to a Tagwalk report, most customers now prefer street-style wear to mainstream runway garments. They are always on social media exploring styles and customisable clothes.
Designers can also leverage social media to figure out customer demands. They can add mock designs to their website and analyse the response. Orders can then be sent to the local manufacturers based on the customer orders received. If the design is not successful, it can be deleted and forgotten without worrying about unsold inventory. From the moment the order gets placed, they promise a six-week delivery.
Designers and retail industry leaders believe that the on-demand model provides the freedom to explore colours, textiles, and styles without the risk of any loss. Calling it the on-demand movement, the fashion industry is embracing the process with the hope to create sustainable and environment-conscious clothes. In the dynamic and seasonal industry, on-demand manufacturing can save billions of dollars, provide guilt-free happiness to customers, and stop wasteful fast fashion from heading to landfills.