Manufacturing On-Demand in Saudi Arabia

Manufacture on-demand is a process which enables manufacturers to offer customers spare parts when they need it. This process allows manufacturers to only produced parts/equipment on demand, rather than storing them in a warehouse & therefore reducing or even eliminating inventory.

On-demand manufacturing is advantageous for businesses who are going through the ripple effect of Covid19 because of its inherent low minimum order requirements. Low minimum order quantities make inventory management more sustainable for service provider who need to maintain round the clock operations & can not afford forced-outages.

The Challenges of Traditional Manufacturing Models

Traditional manufacturing supply-chain was built to support the demands of large businesses & industries. With traditional supply-chain manufacturing, the time it takes to create a product (from design to delivery) ranges from a couple of weeks to a couple of months. If parts are produced overseas, one can expect the process to take closer to 8-months, which might leads some to over-stock products at their warehouses.

e-commerce giant Amazon already employs this manufacturing model & is working to perfect it, where it recently won a patent for its on-demand clothing manufacturing warehouse. While this patent is designed for clothing, this system could be adapted for other categories and materials; including spare parts manufacturing in various industries.

Digital Transformation

Industrial Digital Transformation refers to a set of innovation & transition solutions towards new business models & revenue streams consisting of 3 fundamental pillars:

1. Automation
2. Improved manufacturing processes
3. Production optimization

This type of transformation is not limited to the technologies that are used; rather, it represents a Culture of Change integrated into all work areas & a transformation in the way different teams are managed.

Only in this way can digitalization have a REAL beneficial impact on the production of any company & the country as a whole!

10 Benefits of Digital Transformation:

1. Reduce Physical Warehouse Stocking (Manufacturing On-Demand)
2. Decentralized Production
3. Efficiency & Productivity Enhancements
4. Creates New Business Opportunities
5. Accelerates Response Time to Market Disruptions & Trends
6. Fosters Competitive Advantage
7. Stimulates Innovation to Combat Market Disruptions
8. Streamlines Collective Efforts (Internally & Externally)
9. Improves the Use of Data
10. Attracts New Investment Opportunities in Advanced Digital Manufacturing that would Develop the Ecosystem

Digital Transformation Applications

The 6 Biggest Digital Transformation & Industry 4.0 Adoption Challenges:

1. Unavailability of Technical Database in Digital form
2. Divergence from the Status-Quo & Perceived Ambiguity
3. Fear of Failure due to Liability in Case of Failure
4. Employee Push-Back due to Unfamiliarity
5. Using Legacy Business Models to Solve Present & Future Chronic Problems
6. Working in Silos with Limited Consolidation of Efforts

Advantages of Manufacturing On-Demand

There are a number of benefits to the on-demand manufacturing approach that makes it a more sustainable manufacturing option for utility, desalination, oil & gas, mining, petrochemical, and defense; including:

1. Eliminate Waste

Only manufacture what customers wants when they need it; not only eliminates the need to discount excess inventory, but to also eliminates leftover materials. Manufacturing on-demand means you don’t have to make something before it’s needed, which means more space in the warehouse.

2. Quick Turnaround

The traditional manufacturing supply-chain has lead-times ranging from 2 to 8 months, depending on the function, specifications, and material of the parts themselves & whether they’re manufactured locally or overseas. While it is reliant on the facility and the product, on-demand manufacturing offers competitive lead-times of a couple of weeks from the moment orders are placed.

3. Easier Inventory Management

On-demand manufacturing companies provide support through the entire product lifecycle by acting as the digital warehouse & inventory management service of spare parts for customers.

If a limited quantity of inventory parts are required, this can eliminate the time & costs of shipping products from customer to manufacturer because all the information is available digitally. Shipping orders directly from the manufacturer can mean faster shipping times.

4. No Minimum Order Quantity (MOQ)

Whether you’re making your first sample order (1st article manufacturing), on-demand manufacturers can meet low-volume order requirements quickly. On-demand manufacturing does not require MOQ, so one would never have to order more than they need at any given time.

5. Better Cash Flow Managment

Get frozen money out of inventory & improve cash flow by freeing-up valuable money to spend elsewhere, which will help increase revenue & ultimately grow the business.

When compared to manufacturing product in bulk, manufacturing on-demand may result in a higher cost price per unit, but the advantage is that customers have consistent margins and know exactly what profits will be for each unit sold. Customers don’t risk getting stuck with faulty equipment without required spare parts to operate.

The goal is to augment physical warehouses instead of replacing them streamline ongoing efforts with advances in technologies that would allow us to perform effectively by working smarter instead of harder!

Allow digital manufacturing to serve as your digital warehouse to save time & money.

Manufacturing on-Demand Process

Conclusions

1. Available spare part information Lack Technical Specifications to enable localization.
2. The Coronavirus Pandemic is a wakeup call to Incorporate Industry 4.0 Technologies to become More Independent!
3. The Kingdom does not possess a Unified Digital Technical Database to streamline localization efforts across different industries to leverage the Economy of Scale.
4. Industrial cities do not have a Technical Database to link Supply with Demand.
5. The 1st step towards localization is to Develop a Digital Technical Database.
6. Reverse engineering enables the Development of the Digital Technical Database.
7. Solely working with large foreign international corporations Deprives the Kingdom from Utilizing Local Capabilities & decreases annual Non-Oil GDP Contribution.
8. Reverse engineering enables the identification of manufacturing gaps & identifies Investment Opportunities to bridge these gaps.
9. It is foolish to believe that Old Policies & Procedures are able to help us Adopt with changing work dynamics because they are NOT Fit for Purpose!
10. Synergizing efforts between local reverse engineering & local manufacturing facilities enables the Kingdom to leapfrog & realize the 2030 Vision.

The Maverick

www.DarTec.com.sa

Hashim@dartec.com.sa