For many job shops, the primary method of doing business is creating goods straight from a client request. In other words, they’re make-to-order businesses. While for many this line of business has its risks and instabilities, there are a large number of benefits, such as creating a unique series of products customers can’t find anywhere else as well as providing a great local service. At the same time, there are various trends in manufacturing of whose tailwinds greatly benefit MTO businesses. Companies, even small- to mid-sized organizations, can take advantage of these changes overall.
From lean to agile
For many years, the mantra in manufacturing was to incorporate lean practices first devised by Toyota and expanded upon by several other companies including General Electric. To this day, the basic principles of lean are still sound to a certain level. However, the problem is today’s business world is far less predictable and more non-linear than it has ever been. As a consequence, logistics firm Cerasis noted the supply chain is now focusing on becoming Agile. This means instead of creating pull-based sequential work orders, companies take on tasks in incremental cadences, often called sprints. Such processes require quick decision-making and a high level of adaptability.
Job shops under the make-to-order model greatly benefit from this practice, since much of their business comes less from completing mass production runs and more from singular orders. Adapting to it can help strengthen turnaround time and customer satisfaction.
The rise of 3-D
Additive manufacturing is nothing new to companies. However, the recent advances in a particular form of it called 3-D printing brought about a sea change for many businesses. With higher resolution 3-D models serving as a baseline, as well as better extrusion and sintering processes, it’s possible for companies to do a lot more with metals, plastics and resins, according to consulting firm PricewaterhouseCoopers. Now, businesses can quickly create prototypes – even some basic parts – without needing extensive machining.
For job shops, this allows several opportunities. For example, they can demonstrate to clients what a big project could look like very quickly with rapid prototyping. They can serve as a parts supplier without needing to create an actual inventory. That practice can provide a unique revenue stream.
Right-shoring takes hold
With all the various talk of on-shoring and near-shoring to reverse the trends of manufacturing outsourcing in recent years, there’s been a buzz around right-shoring. Manufacturing Business Technology described this concept as being able to locate particular production to areas that are logistically convenient as well as offering high quality results. As noted above, agile manufacturing will take hold, and that will mean moving links in the supply chain so they’re most beneficial to customers.
Make-to-order processes greatly benefit from right-shoring because they provide specific services at the right place and time. Job shops that utilize this can enable suppliers and clients to have a more efficient system.
The cloud creates a more on-demand environment
One of the things holding back make-to-order operations is implementing an enterprise resource planning solution that improves productivity and efficiency. Because orders were never of a consistent caliber, implementing a platform more suited for mass production never fit well with many business models, not to mention they were really expensive. Now, many platforms such as Microsoft Dynamics NAV offer their services in the cloud. This enables more on-demand programs that don’t require the costly infrastructure usually associated with the technology. As a result, companies can get more connected and efficient overall, improving the ways they make to order.
Make-to-order businesses looking to improve their operations should read about the Features and Benefits of Microsoft Dynamics NAV today.