Why On-Demand Manufacturing Matters for Procurement Teams

Procurement professionals are pivotal in ensuring a company’s supply chain is cost-effective, agile, and resilient. However, traditional manufacturing procurement can be slow, inflexible, and fraught with risks – from high upfront costs to supplier delays. This is where on-demand manufacturing (also known as online custom manufacturing) comes into play.

By leveraging digital manufacturing platforms, procurement teams can transform their sourcing process to achieve greater cost efficiency, responsiveness, and risk reduction. This article explores the key benefits of on-demand manufacturing for procurement teams and how embracing this model leads to a more streamlined supply chain.

Cost Efficiency Through On-Demand Manufacturing

One of the most compelling reasons for procurement teams to adopt on-demand manufacturing is the cost-saving potential.

Traditional procurement often requires bulk orders for volume discounts, leading to excess inventory and tied-up capital. In contrast, on-demand manufacturing supports small batch manufacturing, meaning parts are produced only when needed and in the quantities required.

This just-in-time approach minimizes waste and avoids the expense of overproduction or storing unused inventory. Companies no longer have to pay for large minimum order quantities if they only need a small run of parts – they can order small batches cost-effectively.

On-demand manufacturing also reduces procurement’s hidden costs. Small orders in a conventional process can lead to disproportionate expenses due to multiple suppliers, extensive RFQs, and administrative overhead.

In fact, dealing with numerous vendors for low-volume needs often means endless follow-ups and escalating costs. By using a digital manufacturing platform, businesses have cut these overhead expenses significantly – some report saving an average of 37% on the costs associated with sourcing small orders. These savings come from streamlining supplier management and consolidating orders through one online service.

Agility and Speed to Market

In today’s fast-paced market, agility is everything. Procurement teams need to respond quickly to changing production needs, whether it’s a sudden spike in demand or an urgent requirement for a custom component.

On-demand manufacturing provides the speed and flexibility to meet these challenges head-on.

Rapid prototyping is a prime example of this agility. Using on-demand digital manufacturing services, companies can go from design to prototype in a matter of days.

Whether through CNC machining services for precision prototypes or 3D printing solutions for complex geometries, procurement can source prototypes almost instantly. This enables engineering and R&D teams to test and iterate designs quickly.

Risk Reduction and Supply Chain Resilience

Modern supply chains are full of uncertainties – shipping delays, natural disasters, geopolitical events, or sudden supplier bankruptcies can disrupt production. Procurement teams are tasked with mitigating these risks and ensuring continuity. On-demand manufacturing can significantly enhance supply chain resilience and reduce risk.

One way it does this is by providing access to a diverse network of suppliers. Traditional procurement might rely on a single supplier or a few suppliers for a given part, which creates vulnerability. In contrast, on-demand manufacturing platforms have vast networks of vetted suppliers across regions. If one supplier faces an interruption, the platform can quickly reroute the order to another supplier in the network. This built-in redundancy means production can continue with minimal delay.

On-demand manufacturing is redefining the way procurement teams approach sourcing and production. By leveraging online custom manufacturing, procurement professionals can achieve cost efficiency through reduced overhead and waste, agility through faster prototyping and scaling, and risk reduction by building a more resilient supply chain.

The ability to tap into digital manufacturing services and a global network of suppliers means traditional limitations of geography, volume, or in-house capabilities no longer constrain procurement.

As the manufacturing industry continues to evolve with Industry 4.0 technologies, procurement leaders should consider integrating on-demand manufacturing into their toolkit. By doing so, they will streamline their supply chain and position their organization to innovate faster and buffer against risks.

In summary, on-demand manufacturing matters for procurement teams because it enables a streamlined, cost-effective, and agile supply chain – a competitive advantage in today’s challenging business landscape.