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Uberizing the Manufacturing Industry

17 Apr 2017 10:19 AM | Christon Valdivieso

Original Post: APICS.org

 

Companies within the service industry are changing the concept of ownership and the ways consumers access goods and services — from movies and TV shows to places to stay and means of transportation. Now this trend is making its way into the manufacturing industry to connect small businesses in need of prototypes and products to manufacturers with idle machines.

In her April 8 article for Quartz, Ellen Sheng highlights MakeTime, a Kentucky-based start-up that specializes in distributed or on-demand manufacturing. Companies, entrepreneurs and inventors can engage MakeTime’s services to rent time on nearby manufacturing equipment — including CNC (computer numerical control) milling machines, water jets and laser cutters — to build their prototypes or complete their production runs. 

MakeTime Founder and CEO Drura Parrish was inspired by his own professional experiences to create this service. As an architect, he spent time in machine shops creating custom items and noticed that expensive machinery often sat idle, instead of making the company money. Some manufacturers might have overinvested in equipment after winning big jobs in the past, but as the contracts ended or the products and market changed, the equipment became surplus for these companies. As a result, U.S. manufacturing equipment sits unused about half the time, on average, Sheng writes.

There also is a group of small businesses that do not have the funds to invest in their own manufacturing equipment. This is where MakeTime comes in: The firm connects companies that need machine time with manufacturers that have it. Basically, the customer uploads parts files into a MakeTime product library, adds the order to the online cart, and specifies the project lead time. Within one business day, MakeTime will match the project with a manufacturer and follow up with a data-driven quote. If the quote is satisfactory, the customer signs the purchase order and submits payment. During the process, the customer can track parts from the start of machining to delivery, staying informed every step of the way.

The process helps clients make their products in a quarter of the time it usually takes with traditional manufacturing processes, Parrish tells Quartz. “We streamline [the process], so 100 to 200 machine shops can operate with the same level of control as one,” he says. In addition, the service cuts down on some of the administrative aspects of orders, including the time it takes to find manufacturers, request price quotes, receive and evaluate them, and negotiate the best deal.

In addition to changing the way small businesses access manufacturing services, this Uber-style model could transform the manufacturing industry as a whole. Sheng points out that this industry has been slow to digitize and standardize. For example, there is no universal file type used in manufacturing. Instead, different companies use different software and file types, standards, and descriptors. Some even still stay away from technology and rely on pencil-and-paper drawings.

This particular industry also is very siloed and specialized. Various certifications and specialized machines and processes for working with certain types of materials often result in manufacturers sticking to the types of parts they know best. For example, an auto parts manufacturer likely won’t also make parts for the oil and gas industry, even if the equipment is similar, Sheng notes. MakeTime hopes to break down these silos and properly align supply and demand in machining.

Transformation ahead

Although MakeTime’s model is new to the manufacturing industry, this innovation has the potential to transform the way manufacturers function, find customers, and meet their production needs. Right now, though, the industry is slowly accepting the change and only using this method for small orders of noncritical parts. This slow, methodical progress is in line with recommended change management processes for individual businesses. The APICS Dictionary, 15th edition, defines change management as follows: “The business process that coordinates and monitors all changes to the business processes and applications operated by the business, as well as to its internal equipment, resources, operating systems, and procedures. The change management discipline is carried out in a way that minimizes the risk of problems that will affect the operating environment and service delivery to the users.” 

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