The future of manufacturing is online

There has been no radical innovation in the manufacturing industry for years. It’s an evolutionary rather than a revolutionary industry.

As a result, many companies have been excluded from engineering-intensive industries—think aerospace, automotive, and medical—because of large barriers to entry.

The rise of 3D printing in the past decade, however, has shown the potential of new technologies in manufacturing. By giving engineers the ability to test their prototypes quickly and cheaply, 3D printing has grown to become one of the 21st century’s most disruptive innovations.

While 3D printing was the basis of this disruption, online manufacturing—3D printing, CNC machining, injection molding, and sheet metal fabrication powered by artificial intelligence—has quickly become a key player in the Industry 4.0 revolution. Beyond prototyping, online manufacturing empowers engineers to manufacture without compromise at all stages of the production process.

Consider Kepler Communications, a Canada-based satellite startup. Its founders are four University of Toronto graduates who are determined to create a low-cost constellation of orbiting satellites. Traditionally the aerospace industry has been a very difficult market to break into, especially for a young company without seven-plus zeros at the end of its innovation budget—yet one ripe for disruption. By reducing the risk of sourcing quality parts, the team was able to build and test its product rapidly. Within one year, team Kepler took a sketch on a napkin and turned it into the company’s first orbiting satellite.

Imagine a startup putting a satellite in space 20 years ago. It would have been unthinkable.

But while Kepler’s story is extraordinary, it is by no means unique. Kepler is just one example of the disruption that online manufacturing empowers. And with the inefficiencies piling up from traditional processes, the manufacturing industry itself is ripe for disruption. For the online manufacturing market to grow, however, it must address the following:

• The lengthy and inconsistent quoting process. A number of factors can elongate the quote process by weeks.
• Delays in lead times, which slow the innovation process, leading to a blow-out in iteration time. That wastes money and leaves engineers twiddling their thumbs.
• High-quantity minimum orders create a significant hindrance, particularly in prototyping. Imagine having a shop filled with parts patterned on a design, and those parts will never be used because the design didn’t make the final cut.

Often, a combination of one or more of these logistical barriers raises roadblocks, pushing many companies to seek an alternative. This is especially true for smaller-scale engineering firms and entrepreneurs. By presenting viable solutions to these issues, while still delivering quality parts, online manufacturing provides small firms with a competitive advantage.

Tedious Quoting Cycles

For traditional manufacturing, the quote cycle averages one to two weeks and involves a lot of back-and-forth communications. And when you throw into the mix that a good deal of quotes are rejected, the inefficiencies begin to stack up.

Outsourcing design iterations of CNC-machined parts helped startup Kepler Communications launch a nanosatellite within one year. 3D Hubs

Quote inaccuracies due to complex product configurations and dynamic pricing scenarios, according to a recent white paper by Tata Consultancy Services, “lead to sales ineffectiveness, lost margins, and lost business opportunities.” While processes are being streamlined with new technology, quoting is still done manually. This leads to errors and adds human bias to the quote process, resulting in further discrepancies in the quoted price.

This perpetuating cycle has, over the years, become the norm simply because there were no alternative options. Industry 4.0 technology, including AI and machine learning, however, offer a possible solution.

The technological advantage for building and editing quotes online gives users the ability to review their parts for manufacturability in real time. As a result, parts can be approved and priced instantly, ensuring accuracy and cost-competitiveness while reducing lead times.

Delays Slow Innovation Process

With rapid globalization of supply chains, outsourcing the manufacturing process to an overseas provider has become the global norm. The initial benefits—cheap labor, lower manufacturing costs, and high production capability—of outsourcing directly to one factory may seem obvious, but there are also negative aspects of the process.

Aside from slow quote cycles, the hassle of administration, finding a reliable supplier, and checking and comparing prices for materials also can slow the process.

But focusing solely on low production costs rather than the negative costs associated with long lead times can lead to a loss of competitive advantage. As stated in the Journal of Operations Management, “while time is a basic business performance variable, management seldom monitors its consumption explicitly—almost never with the same precision accorded sales and costs. Yet time is a more critical competitive yardstick than traditional financial measurements.”

By focusing on reducing lead times, engineers have more space to do what they do best. And while the actual time in production doesn’t differ dramatically between online manufacturing and traditional manufacturing, the inefficiencies of the whole process can wipe weeks from the process.

High-quantity Orders Kill Innovation

Manufacturers have reached the point where to make money they must produce goods in mass. But finding a supplier willing to make parts in small quantities can be difficult or, more likely, uncompetitive with respect to price.

Beyond the obvious flaws of high-volume manufacturing, such as needing serious space to store minimum-quantity orders (MQOs), the price of shipping huge quantities of stock, and leftover parts going to waste, this type of manufacturing isn’t conducive to innovation.

For companies that develop new and innovative designs, an MQO can be a barrier to launching a product. Imagine printing 1,000 pieces of a part and, after waiting for weeks for it to arrive, it isn’t quite right. Going back to the drawing board takes time, money, and generates waste.

According to McKinsey & Company, engineering-intensive businesses—including aerospace, automotive, and medical—can accelerate prototyping by using online manufacturing solutions, “allowing them to explore completely new design features or create fully individualized products at no extra cost.”

SMEs Lack Access to Quality Manufacturing

Whether as the result of MQOs or a myriad of other aspects of traditional manufacturing, small-and-medium-sized enterprises struggle the most to find an effective and affordable solution. This limits their ability to compete, leaving them two courses of action: fork out the requisite cash to get a quality prototype, or save by compromising on design.

For small to medium-size enterprises, this can draw out the innovation process and delay a market launch. However, the ability for engineers at smaller companies to customize their products seamlessly and without compromise shouldn’t rest on the size of their wallets.

Online manufacturing addresses many of these issues—high MQOs, lengthy delays, and tedious quoting processes—and thus lets the smaller players enter markets that they were once excluded from.

As a result, online manufacturers have delivered a lot of value to engineers and innovators. The high speed of iteration has helped businesses such as Kepler to innovate and thrive.

Online manufacturers aren’t the only promoters of digital technology. Many teams within aerospace, automotive, medical, and other sectors have embraced distributed and digital technology to gain a competitive advantage. The streamlined process brings advantages across the whole value chain of production, ending years of stagnation in the manufacturing sector.

Filemon Schöffer is COO of 3D Hubs.