Cloud Manufacturing

Blogposts covering topics of Cloud Manufacturing.

Content | Playbook B&C Parts

Get Your Playbook Now!

 Find out  how you can radically simplify your B&C parts procurement through the process of cloud manufacturing, with our playbook!

Get your copy now!

Break_Blue_svg

Focus on what's important

Download our playbook to learn:

What you will learn in the playbook:

  • A Simple Yet Detailed Over of an ABC parts analysis How to overcome the B&C parts dilemma
  • Why it is so important for companies to focus on their A Parts
  • Why shifting your B&C parts to KREATIZE will benefit your company

This is an easy way of giving your business a stronger bottom line through savings in custom part procurement, and a chance at attaining other benefits as well. 

Break_White_svg

KREATIZE BLOG

Check out our latest blog posts!

Wenn Chinas Politik keinen wirtschaftlichen Wohlstand schafft, fliegt ihr der Laden um die Ohren 

China-Experte Frank Sieren spricht beim 6. KREATIZE Launchpad in Berlin  ...
Read More

KREATIZE & Metalshub Market Report September 2022

General market report While the war in Ukraine and China´s ...
Read More

KREATIZE & Metalshub Market Report June 2022

After difficult months in the first trimester of the year, ...
Read More

Top 6 Manufacturing Industry Trends in 2022

The manufacturing industry is building back in 2022, but many ...
Read More
Break_Blue_svg

WHY YOU SHOULD CARE

KREATIZE_Logo_NEW

Why Does Cloud Manufacturing Matter?

Cloud manufacturing is a revolutionary technology that is significantly changing the way companies bring hardware products to market. Understanding this technology is key to fully leveraging its potential, and ensuring the prosperity of one's business. 

Some of the many strategic advantages which are possible due to cloud manufacturing are lowering production costs and accelerating innovation and product development. 

Cloud manufacturing is the inevitable future of manufacturing and it is important to understand this innovation, if you don’t want to risk your business getting left behind.

Content | Playbook Procurement Cost

Cut your Procurement Cost

Save 10% and more on Custom Part Procurement Cost

Get your copy now!

Break_Blue_svg

Cut your Procurement Cost

Our Approach

At KREATIZE we are achieving major cost savings for our clients by using our plug-and-play Cloud Manufacturing technology. By doing so these companies are also removing all the heavy lifting of the procurement process without having to make any additional investments.

To learn more about the framework we created a crisp playbook: “Cloud Manufacturing: A Simple Strategy For Reducing Procurement Costs”

 

A Revolutionary Technology

What you will learn in the playbook:

  • Why Cloud Manufacturing Is a driver for procurement 
  • How KREATIZE achieves the cost savings
  • How easy it is to incorporate cloud manufacturing into your procurement processes and decrease your cost

This is an easy way of giving your business a stronger bottom line through savings in custom part procurement, and a chance at attaining other benefits as well. 

Break_White_svg

KREATIZE BLOG

Check out our latest blog posts!

Wenn Chinas Politik keinen wirtschaftlichen Wohlstand schafft, fliegt ihr der Laden um die Ohren 

China-Experte Frank Sieren spricht beim 6. KREATIZE Launchpad in Berlin  ...
Read More

KREATIZE & Metalshub Market Report September 2022

General market report While the war in Ukraine and China´s ...
Read More

KREATIZE & Metalshub Market Report June 2022

After difficult months in the first trimester of the year, ...
Read More

Top 6 Manufacturing Industry Trends in 2022

The manufacturing industry is building back in 2022, but many ...
Read More
Break_Blue_svg

WHY YOU SHOULD CARE

KREATIZE_Logo_NEW

Big Shifts in Manufacturing

The 4th industrial revolution is well underway. With the gap between the digital, physical, and biological worlds shrinking, breakthrough technologies including AI/ML, robotics, computing, the Internet of Things (IoT) and 3D printing are evolving at an exponential pace to radically affect how we live and work.

Manufacturing performance capabilities and capacities are no exception. The velocity, scope and impact of this fourth revolution are distinct, and accelerating the innovation of entire production systems.

This paper focuses on Cloud Manufacturing, the technology that’s shaping the future of production and amplifying all other new technologies in the manufacturing space. It explains cloud manufacturing and how it will become central to hardware company operations. The paper also discusses the hurdles and hesitancy companies may experience in adopting the technology.

Content | Whitepaper Cloud Manufacturing

Cloud Manufacturing

Its Technology and Impact on Hardware Businesses

Cloud Manufacturing - a revolutionary technology for hardware development. 

In today’s rapidly changing landscape, product development must make use of new technologies to better address market demands. However, in order to effectively adopt a new technology, it is necessary to fully understand it.

Get your copy now!

Break_Blue_svg

WHITEPAPER

A Revolutionary Technology

This whitepaper is about cloud manufacturing, the technology that’s shaping the future of manufacturing, and boosting all other new technologies in the production space. 

It is a comprehensive look at the academic research and the business implementation of this game-changing technology, which will become central to the coherent and flexible operations of future hardware companies.  It is also a look at the hurdles it faces as a new technology, and how its transformational solutions are fueling its bright future.

Download the whitepaper to learn:

  • What is cloud manufacturing, and how  it has gone from theory to practice 
  • About the ongoing research behind this nascent technology, along with thoughts from leading experts 
  •  The key benefits of cloud manufacturing 
  • The transformative nature of cloud manufacturing
  • The big influence that cloud manufacturing will have on the next generation hardware company
Break_White_svg

WHY YOU SHOULD CARE

Logo

Big Shifts in Manufacturing

The 4th industrial revolution is well underway. With the gap between the digital, physical, and biological worlds shrinking, breakthrough technologies including AI/ML, robotics, computing, the Internet of Things (IoT) and 3D printing are evolving at an exponential pace to radically affect how we live and work.

Manufacturing performance capabilities and capacities are no exception. The velocity, scope and impact of this fourth revolution are distinct, and accelerating the innovation of entire production systems.

This paper focuses on Cloud Manufacturing, the technology that’s shaping the future of production and amplifying all other new technologies in the manufacturing space. It explains cloud manufacturing and how it will become central to hardware company operations. The paper also discusses the hurdles and hesitancy companies may experience in adopting the technology.

Break_Blue_svg

CLOUD MANUFACTURING

Why you should care about Cloud Manufacturing

Manufacturing, like many industries, is going through a series of global changes that are shifting the market in new and unexpected ways. Increased competition, emerging technologies, and a complex economic environment are increasing the pressure on manufacturers to consider more agile and flexible approaches. Businesses are facing new challenges in bringing hardware products to market and meeting highly variable customer demands for next-generation product experiences.

Legacy systems are not designed to integrate or scale as businesses and operations evolve. Manufacturers now require a more agile way of working to fuel innovation and remain competitive—and the cloud is in a prime position to deliver it.

Break_White_svg

Insights from Leading Experts

“Hardware companies will increasingly place more orders on cloud manufacturing platforms.They will use more of its services and applications to cover all activities involved in manufacturing, beginning with the design and optimisation of their products.” 

Dr. Lin Zhang, Director of the Cloud Manufacturing Research Center at Beihang University

UV 2018_1
_MG_4817-klein_Q

“Cloud manufacturing has been extended by these data driven technologies. And today, it is not only about resources, but also about services and processes, and creating new services.”

Daniel Stock, Group Leader IT Architectures for Digital Production at Fraunhofer IPA

“It treats manufacturing resources and capabilities like cloud computing resources to create a service-oriented manufacturing scenario with all the resources and capabilities provisioned in the cloud—be it design, analysis, manufacturing, or testing. 

Dr. Xun Xu - Director of the Laboratory for Industry 4.0 Smart Manufacturing Systems (LISMS) at the University of Auckland

XunPotrait2cropped

The Art of De-Risking Your Hardware Startup

Every startup inherently possesses a significant amount of risk, and mitigating risks is crucial to ensure a better outcome for your startup. Here are some strategies to de-risk a startup, including finding the right partners to help you grow your business.

We are living in a golden age of software.

Never has it been easier to develop and scale cutting-edge software. Hardware, the interface and tool by which all software becomes useful, remains much more complex to produce on the other hand. Because of its intricacy, hardware requires more steps, roles, processes, tools, and therefore risk.  

It’s important that we overcome this complexity because hardware is an indispensable part of the ongoing technological advancements in today’s society.  In a time where the internet-of-things (IoT) is fastly becoming reality, it is crucial to understand that hardware is a key component in this technological trend. 

Nils Berger, CEO of Viewpointsystem, and Thomas Hoffmeister, Chief Commercial Officer at KREATIZE GmbH highlighted this in their discussion at Launchpad Austria, calling hardware “the T in IoT”. 

Click here to watch the full interview with Nils Berger.

Manufacturing is a technology-based industry that is always evolving, making an ongoing understanding of current trends and cutting-edge technologies paramount for success. Hardware is not as easy to update as software and therefore must be built with more longevity in mind. Ideally hardware should be built in an agile fashion where it can be constantly optimized at the prototype stage for a more successful scale-up.

Hardware product development is not easy, in part due to the high-risk and up-front costs associated. This is all changing, however, as new technologies are helping hardware entrepreneurs de-risk their startups by making it faster and easier to take their products from prototypes to scale-ups.

What is De-Risking?

De-risking means decreasing the chance of harm, danger, or failure of your business. One of the best ways startups can de-risk is by effectively focusing on their core competencies and attaining  external partners for their non-core strengths. 

The term de-risking has its origins in finance and refers to the practice of ending or setting certain parameters with clients or types of clients, in order to better handle the risk associated with them. For example, requiring a client to buy a type of insurance to offset the risk on a loan. This can be something like requiring an importing company to acquire transportation insurance for their long-trek products from China.  In the case of hardware startups, the risk is not necessarily on the choosing of clients. Rather, in the choosing of their in-house strengths and know when to leverage partners to handle the areas where they have less expertise. 

“De-risking for hardware startups means deciding to take on external partners to perform business tasks unrelated to your core product development process,” said Thomas Hoffmeister, Chief Commercial Officer at KREATIZE GmbH. “Investors like it when you present them with solutions that will not only save money, but also take care of necessary processes efficiently.”

How Do You De-Risk a Startup? 

A lean startup is one that focuses on developing a particular product or company that meets the explicit desires of the market.  Lean startups often make use of partners to acquire particular services in an effort to use less capital and de-risk while they pursue growth. Finding such a partner can substantially lower your product development costs and time-to-market. 

“Lean hardware startups find ways to test the market with fewer resources,” said Hoffmeister. “The risk is the same, but in terms of investment, it is drastically different. It is the difference between setting up a costly production line with many machines or obtaining the same result with none of that.” 

For example, in the early 2000s, U.S automaker Tesla was a startup with expertise in developing two key components of a car: an electric powered engine and a battery. Instead of setting out to build every component of the car itself, it partnered with Lotus Cars to create the Tesla Roadster (first generation). Lotus provided all necessary elements for a successful car assembly, while Tesla focused entirely on its key differentiating components.

“Tesla did not know how to build cars, so they went to an expert,” said Hoffmeister. “Had they tried to build an entire car themselves, they might have run out of money faster. By working with Lotus they de-risked.” 

Tesla went on to create later generations of their cars themselves. However, at this initial stage, the partnership with Lotus Cars was crucial to their success. They were able to de-risk with the right partner to prove their concept and gain the strength and success to go at it alone in the future. 

In the world of hardware, startups are offering solutions to better manage risk when it comes to developing a supply network quickly. Most large hardware businesses are highly rigid and secretive about their supply networks. Developing such a network is a very expensive process, and many companies fail in part because of the time and money required to develop it. 

“Startups are the ones offering de-risking solutions for this challenge,” explained Hoffmeister. “The big players in the hardware industry still rely on old models and are not providing the solutions for startups.”

How To De-Risk Your Hardware Startup With KREATIZE 

Hardware startups have a strong product development I.Q. They have a good understanding of what is required to make a game-changing product. However, there are parts of the development equation where they lack knowledge and where it is expensive for them to develop inhouse resources. 

“Startups are very good at figuring out what their hardware product should be,” said Hofffmeister. “Manufacturing it, finalizing it, and bringing it to market—these are areas where they need help.” 

By partnering up with KREATIZE, hardware startups will decrease their risk and drastically cut their procurement and supply network costs of acquiring custom parts. 

KREATIZE can fully handle all of a startup’s custom part needs via our software and manufacturing network. All a startup needs to do is upload their custom parts drawings, configure its specifications,  and place an order. The parts will then arrive quickly at their chosen location. 

“Ultimately a hardware startup should want to get from point A to point B as fast as possible with the fewest resources,” said Hoffmeister. “By choosing to develop your own supply network the upfront costs and time-to-market become much higher. Setting up a quality custom parts procurement network simply takes time.”

In a way, KREATIZE can do what Lotus did for Tesla from a supply network perspective. A startup brings us in as an experienced partner who can handle its procurement needs for custom parts with ease. This allows it to de-risk by not needing to set up their own supply network,  much like Tesla would have faced if they had tried to make a full car from scratch without partnering with someone who could help them. 

“Startups must de-risk as much as possible to succeed,” concludes Hoffmeister. “With  KREATIZE, a company is de-risking by plugging into a cloud network and skipping the expensive and time-consuming efforts of procurement and developing a supply network. Our KREATIZE team becomes your partner to better configure your custom parts.”

Are you a hardware startup that is looking to De-risk?

Our mission at KREATIZE is to provide manufacturing that the world loves. 

This means helping your startup succeed from prototype to scale up, and de-risk as much as possible by providing your engineers with the tools to create products quickly and without cumbersome procurement processes. With our proprietary and patented software, KREATIZE uses the power of cloud manufacturing to give you access to the best industrial facilities and in the process helps you mitigate all supply-related risks.

Start now by creating your account for KREATIZE Manufacturing Services or by making an appointment with one of our cloud manufacturing specialists today

Want to stay up to date with content on cloud manufacturing and hardware innovation? Then sign up for our newsletter: Cloud Manufactured.

Cloud Manufacturing & The 4th Industrial Revolution

The manufacturing industry is undergoing a significant shift in technologies and capabilities. Cloud manufacturing is a key pillar in this exciting technological revolution, and we would like to explain why the cloud is fueling this industrial revolution.

We are currently at the start of the 4th industrial revolution. 

For hardware businesses, this is an exciting time to be around. Technologies are making the process of manufacturing more accessible and affordable than ever before. It does not matter whether you are a big or small hardware business, the changes within the industry provide all hardware companies the opportunity to make better products faster.  

This is not the first time such big changes have occured in the manufacturing industry. Radical shifts have taken place throughout human history. The first in modern day was in the 18th century when mechanization began to replace manual labor. 

This was then followed by the technological revolution, from the early 20th century through the first world war, which brought electrical power to manufacturing. This allowed for high-volume production and labor division. 

Then came the 3rd shift in the 1970s, when automation entered the scene through the use of electronics. The introduction of robotics also began during this era, increasing  the process of production, and reducing the cost of labor by enabling repeatable tasks.  

Now, the manufacturing industry has entered a 4th revolution, fueled by digitization. 

A key pillar in this new industrial revolution is cloud manufacturing. Cloud manufacturing uses the principles of cloud computing to connect a diverse set of machines in factories. It offers on-demand access to manufacturing services with pricing on a pay-per-use basis. This allows hardware businesses to skip buying, owning, and maintaining physical machines on their shop floors, because it provides them with access to core manufacturing services (such as CNC turning, CNC milling, 3D-printing, sheet-metal laser-cutting, and many more) at the click of a button from anywhere in the world.  

Cloud manufacturing has also been developed to cover all aspects of the product life cycle. It can be used during the design stage, low or high volume production phases, and during the ramp-up stage. This is important, as it allows hardware companies to be completely serviced at every stage of the production process, as they grow or adjust to changes in demand. 

Cloud manufacturing as a concept was first proposed by a group of academics led by Prof. Bo Hu Li and Prof. Lin Zhang in 2009 in a paper called “Cloud Manufacturing: A New Service-Oriented Networked Manufacturing Model”. Since the introduction of the concept as a nascent technology, more than 800 hundred papers have been published on the topic. The thought leadership on this topic now highlights the holistic advancement of this new technology from concept to reality, and covers both macro topics like future trends in cloud manufacturing, and also more focused subjects such as scheduling and cybersecurity. 

We are still in the early stages of cloud manufacturing, but you can already see the profound effects across the hardware industry. In fact, this could be a tipping point in how companies both big and small are making use of the cloud to develop better new products faster and at a lower cost. 

 

Why is cloud manufacturing a key pillar of the next Industrial Revolution?


Cloud manufacturing significantly broadens access to industrial technology, production capabilities, and development processes for hardware businesses. It fundamentally disrupts the way engineers make products, establishing a new paradigm for the hardware industry.  

Cloud manufacturing further amplifies other technological shifts by enabling seamless access to new technologies available and bringing digitization and automation to the shop floor level. Local manufacturers have an immediate incentive to digitize in order to  meet the global demand coming to them through this new technology. This is becoming the new  standard and is an indispensable approach for attaining and servicing hardware clients.  

Cloud manufacturing is being adopted by more and more businesses because of its ability to provide four key benefits: agility, elasticity, cost savings, and seamless global scaling. 

 

Let’s take a closer look at these benefits: 


Agility

The cloud gives hardware businesses the ability to produce a prototype in minutes with access to technologies and services that allow them to build on an as-needed basis, with just a few clicks. With this seamless access, hardware businesses can benefit from a wider variety of manufacturing services and capacities. A plethora of options gives them room to experiment with different processes and materials to enhance their products and production processes. 

By using cloud manufacturing, hardware businesses are no longer bound to a single technology when it comes to making their products. The cloud gives them the opportunity to adjust or use newly available technologies at the click of a button. They’re no longer shackled to specific technologies due to lack of access or costly investments in their own machines.  Hardware businesses are also provided with more opportunities to introduce design for manufacturability (DfMA) practices at the very early stage of their product’s life cycle.  

This newfound agility, in turn, allows hardware businesses to launch their products to market faster than ever before. 

 

Elasticity

With cloud manufacturing, hardware businesses no longer need to plan ahead and over-stock on resources to be able to meet future surges in demand. Instead, they can  stock the optimal level of resources needed to operate and have access to all the necessary manufacturing resources that they require in the cloud. These resources can be easily modified based on their business needs.

Cost  Savings

One of the most revolutionary aspects of cloud manufacturing is its effect on costs. The high up-front costs associated with machinery and quality manufacturing are eliminated. 

Previously, only high-volume hardware companies had access to the best manufacturing services in the world. Through the cloud, it does not matter if you are in the prototype, low-volume, or mass production stage—great manufacturing is available to you at the click-of-a button. 

Cloud manufacturing also lowers the bar for hardware businesses in terms of capital investment. It allows them to trade capital expenses (such as machines and real estate) for variable expenses, giving them a way to pay only for the manufacturing services they consume. Variable expenses are much lower due to economies of scale, rather than having to build it yourself.

Global  Scaling

With cloud manufacturing, hardware businesses can scale their production seamlessly and expand their business globally in minutes. Adding a new assembly-facility, say in China, does not require building a whole new manufacturing plant, or developing a Chinese supplier network. The cloud offers access to global manufacturing services with a click. In other words, immediate access to quality manufacturing plants all over the world that are ready to meet their bespoke demands. 

Why is the cloud so revolutionary? 


The cloud is fueling a more powerful industrial revolution because it ultimately does one thing: democratizes manufacturing. 

It levels the playing field and gives hardware businesses large and small more control over their future, leaving ingenuity and effort all that stand in the way of their prosperity. 

This revolution is unlike the many before it because it opens more doors and provides access to more businesses. Manufacturing is no longer a closed group, but a place where anyone with a bright idea and some effort, can build a great product. 

We are excited to be a contributor to this revolution at KREATIZE. Our service offering is designed to provide all hardware businesses with the capacity to take full advantage of these changes in the industry. If you are interested in joining us in our mission to fundamentally change the world of manufacturing, then please set up a meeting with a member of our team now.

Top 5 Manufacturing Challenges For Large Hardware Businesses

Large players within the hardware world have a unique set of manufacturing challenges they must overcome in order to ensure their long-term success. KREATIZE can help address these unique manufacturing problems. Allow us the opportunity to show you how!

Innovation and grit are what got every large business to its privileged position.

This is particularly true in the hardware business where success is heavily tied to a deep understanding of technology, product development methodologies, and supply management. However, maintaining that sense of innovation can be hard for large businesses, whose structured approach tends to get sturdier with time.

Traditional manufacturing is an expensive process that requires heavy investments and a high-operating cost. It also requires a large group of trained interdisciplinary teams to manage and execute the manufacturing systems in place. Because of the complexity, and capital-intensive nature of the business, risk, and change are often not well embraced within large hardware companies.

Large hardware businesses face distinct challenges when it comes to growth, digitization, and maintaining a competitive advantage. KREATIZE was created to help both small and large hardware businesses with a platform that allows them to pursue a more agile product development process, by digitizing the way custom parts are procured and manufactured.

Essentially, we provide agile solutions to critical issues for businesses that want to modernize their manufacturing supply chain to better meet the demands of the time. We help them drive innovation by bringing better products to market faster, more sustainably, and with a lower cost of entry. KREATIZE’s platform improves price transparency, removes bottlenecks that get in the way of product development, provides flexibility in adapting to market demand shifts, and guarantees quality control.

Here are the 5 main challenges that we often see established hardware companies face, and the solutions KREATIZE has developed to address them.  

1. Agile Product Development:

Large hardware companies have firm deadlines and processes for delivering products to market. This rigidity makes it difficult for them to adopt agile product development practices for prototype and low-volume manufacturing. It also makes it difficult for them to shed traditional design and procurement processes, as missed deadlines and delays have financial ramifications.

This strictness inhibits them from making enhancements to their products while they are still in development, which has a massive impact on their time-to-market. This results in a longer production schedule for new products, slowing the pace of innovation and limiting their chance at quick optimizations to meet market demands. By failing to properly introduce agile product development practices into their organizations, large hardware businesses put at risk their leadership positions by failing to create innovative products fast-enough.

For example, none of this is perhaps more obvious than with 17-year old Tesla’s agile product development strategy of making cars with less parts. Tesla’s have significantly fewer parts per vehicle — around 20 – in comparison to those with internal combustion engines, which have about 2,000. They are able to do this with the help of software on their exclusive hardware. This combination helps Tesla develop their cars faster, but also improve them with software updates every few weeks like a smartphone. Tesla’s are unlike traditional car-markers where their product does not upgrade or change for as long as it is being used.

Because of agile product development practices, Tesla is not tied to the standard minor vehicle upgrade product life cycle of 2 to 3 years, or the new car model introduction average of 4 to 7 years. Tesla can make changes to their current and future cars faster because of its strong agile product development practices. Tactics that have allowed it to build cars that can be more easily manufactured, and simultaneously improved.

Part of the problem that large businesses have is the ability to properly inject a new way of thinking in the organization, and resources for training employees in novel systems and processes.

They suffer from a legacy dilemma and are more focused on what has worked in the past, and have systems in place to ensure their legacy systems remain. However, large hardware companies can successfully integrate agility into their structured system over time. The trick is to do it incrementally by introducing intuitive technologies that foster agile product development gradually with specific new products at the prototype stage to ensure business continuity, and successful adoption.

How can KREATIZE help?

KREATIZE enables large hardware companies to immediately benefit from a platform that gives them the flexibility necessary to be more agile, by freeing them from an early design commitment and providing access to a large network of vetted suppliers with a plethora of manufacturing services.

In other words, it gives product designers and engineers an opportunity to adjust or enhance their products throughout the development cycle. Thereby removing some of the rigidity around traditional development processes that require an early commitment to a specific design trait (e.g. material, post-process).

KREATIZE customers do not need to completely overhaul their systems or build anything from scratch. In fact, new product development teams can easily start using our platform for specific parts, and can slowly integrate our services for other customized parts in their companies over time.

For example, engineers from large hardware businesses that are working on a new prototype can immediately begin to work with KREATIZE’s supply network, and receive their desired quality parts at the click of a button. They can skip the slow procurement processes meant for high-volume manufacturing and can quickly start to build their product. Allowing them to introduce design for manufacturability and assembly (DfMA) practices early on, which can speed up the production of their product as it goes from small to high volume. KREATIZE can substantially lower the time to market for a product, and  provide engineers with an agile platform that allows them to make enhancements.

Our system is also highly intuitive, and we will not only help businesses set it up, but we will also work with them to ensure they get the most out of it. It’s an easy way to inject agility into development processes without completely overhauling current systems, and creating a space for innovative teams to cut their time to market, by having the tools and space to work on their prototypes.

2. Procurement Bottleneck:

Large companies have a tendency to treat small orders just as they would big orders. This is a problem from a product development standpoint. Procurement professionals spend a disproportionate amount of time negotiating small purchase orders for a prototype and treat it much in the same way as they do the parts of an established high-volume product. The approval processes and workflows for large orders are not well suited for new product development. They might require several rounds of paperwork and dozens of calls with potential suppliers to determine who can meet the small-batch prototypes at a competitive price. These cumbersome procurement processes chip-away at valuable product development time, and are costly from a resource standpoint. To unblock procurement processes companies should consider using a digital platform that offers access to a network of manufacturers who can meet bespoke demands for custom parts without the back-and-forth of traditional procurement methods.

How can KREATIZE help?

KREATIZE gives engineers access to a network of capacities through a one-stop digital platform. It allows them to skip the sluggish procurement process entirely by providing immediate access to quality suppliers who can meet their product specificities and quantities. There is no time wasted on finding a supplier who can fulfill small batch sizes, negotiating a proper price, or ensuring quality. KREATIZE offers large businesses a way to quickly alleviate procurement bottlenecks with access to an agile network of suppliers who meet the demands for more flexible product development.

3. Silos:

As stated before, large businesses have well-defined processes for product development. Each phase of the process is typically handled in silos by certain departments, which can jeopardize effective communication and decision-making. This causes problems when there’s a gap in the information chain that impacts the entire supply chain. Silos restrict knowledge sharing, as goals for each department differ in terms of objectives, budgets, and responsibilities. By not understanding the goals of other departments, a silo is likely to dilute the common vision within the organization. This in turn can cause a series of systemic problems that affect all members of an organization and weaken the position of a company. 

Large hardware organizations have siloed procurement and product design development. Engineers are unable to discuss their prototypes or early product iterations in real-time with suppliers. This slows down the product life cycle, as procurement teams are bogged down with quotes and price negotiations that may not be necessary in the early product development stages.

This prevents engineers from attaining proper feedback, and from making quick adjustments to their product (for instance, changing a material or post-process) as they develop them. A platform that can provide engineers with access to seamless custom part ordering would be an ideal solution. This would provide them the feedback necessary to make adjustments more quickly and speed up the early development process.

How can KREATIZE help?

By working with KREATIZE, engineers can benefit from a one-click ordering platform for their specific custom parts. They will also get expert feedback on the drawings of their customized parts from our talented KREATIZE engineers, who will help them take advantage of new manufacturing technologies to produce these parts. They will be able to make adjustments throughout the entire development process, freeing them from early design commitments and from cumbersome procurement processes that are not tailored to prototyping or small-volume manufacturing. Our suggestions will help teams save money and speed up their go-to-market timelines, always with sustainability in mind.

4. Ramp-up:

Hardware businesses in today’s competitive environment face rapidly decreasing product life cycle timelines. As a result, handling production ramp-ups for new products efficiently is crucial for the long-term success of  a large hardware business. Ramp-ups are an increase in production ahead of an anticipated uptick in demand for a product. In order to do this, hardware companies traditionally have to face high upfront investments to purchase their own machines.  

As a result of this, large hardware businesses might face situations where the reality of the step function puts them in the difficult position of having to consider buying additional machinery that is hardly utilized, and in turn makes little financial sense. This makes it difficult for large hardware businesses to go from small batch to large series. Scaling basically becomes a much more difficult process as a result of all the investment required to meet the uptick in demand.

What could  be a solution to this challenge is making use of a cloud manufacturing network that has the capacity to deal effectively with small batches and the ramp-up demand at all times. A platform that allows large businesses to instantly grow when necessary. One that is ready to meet any type of demand, as it has many suppliers at its disposal, and that can offer efficient use on demand.

How can KREATIZE help? 

By working with KREATIZE, large hardware businesses benefit from our platform’s supply network and ability to meet both small batch and high-volume manufacturing simultaneously. Our large cloud network of manufacturing partners have enough machines to satisfy any volume of required seamlessly.  

Large hardware businesses do not need to  invest in expensive machinery, or run into step function issues, when working with a well-made cloud manufacturing network. With KREATIZE  companies gain access to a global supplier network high-caliber standards on an on-demand basis, which means that they will pay per usage, and not have to be concerned with issues of capacity and growth.

5. Blackbox Pricing:

When it comes to ordering customized parts, lack of transparency in pricing is an ongoing issue. Large hardware businesses typically order parts in bulk, meaning they likely do not have insight into the individual cost of each component, and ways where they could improve design or sourcing. Small incremental expenses from parts can really add up and have a serious impact on their bottom line. A solution to this problem would be to utilize a platform that provides clarity on cost calculations for each customized part purchased.

How can KREATIZE help?

KREATIZE offers full pricing transparency to our clients via open book calculations. This means that process and setup times for each individual component are clearly stated and available in the KREATIZE database. Businesses will also find the fixed hourly machine rates for their orders. KREATIZE bundles its orders to further ensure a lower price for each of our customer’s parts. Bundling also provides us with better customer service to address issues, and ensure access to the best resources from our manufacturing partners. 

Are you a large hardware business that needs to overcome these challenges? Do you need immediate and actionable solutions?

KREATIZE would love to work with you to ensure that your business maintains its leadership position. We understand the problems you are going through, and want you to benefit from the very best of today’s technology without having to completely overhaul your business.

KREATIZE provides manufacturing the world loves. We want to help your business enter the next generation with new tools, show your engineers the latest manufacturing innovations, and help you deliver your beloved products to the world with ease. KREATIZE’s patented and proprietary software leverages the power of cloud manufacturing to give you access to a large network of first-rate global suppliers.

Start now with your free account by making an appointment with one of our cloud manufacturing specialists today, and allow your business to enter the future of manufacturing.  Or by creating your account for KREATIZE Manufacturing Services today, and allow your hardware business to make a leap into the future of manufacturing.

Are you a startup in need of solutions to your challenges? Please read our article for startups to see how we can help you as well.

Top 5 Manufacturing Challenges For Hardware Startups

 

Hardware startups have a unique set of challenges they must overcome in order to find success. KREATIZE is a startup that was created in part to provide solutions to these distinctive problems. Allow us the opportunity to show you how!

Starting a business is always a challenge.

Starting a hardware business that requires manufacturing services perhaps even more so.

Why?

Manufacturing is a capital-intensive process that requires many factors and a sophisticated set of interdisciplinary teams to develop products. At its core, manufacturing is a technology-based industry that is constantly evolving as a result of improvements within its industrial processes. Therefore, a degree of agility is necessary in order to accurately meet the demands of the market. This flexibility is often naturally present in startups, but it can only be of value if they also possess some of the core elements of a mature manufacturing business.

Hardware startups have distinct challenges they must face on their journey to maturity. As a startup that helps these businesses, KREATIZE was created to transform the outdated and inefficient procurement processes of both small and large hardware businesses. We are also deeply familiar with some of the challenges faced by startups in this space. In fact, one of our main goals is to provide fellow startups with solutions to their specific problems as nascent businesses that require top-notch manufacturing services.

Here we would like to present you with the 5 main challenges hardware startups face, and how KREATIZE helps solve them.

1. Building The Right Supply Network:

Startups are naturally hyper-focused on their products. This product-centricity is actually one of their greatest strengths. Equally important, however, is developing the right network to have all the industrial components necessary to manufacture their products. This part of the equation takes a lot of time and resources to develop effectively though. This part of the process can chip away at their go-to-market timeline, and add expenses.

Startups usually lack the manpower to develop both their product and a superb supply network simultaneously. The due diligence, negotiations, and back-and-forth between potential suppliers and their business is an exhaustive process—one that shifts their focus from creating their products and revenue-generating activities.

How can KREATIZE help?

By working with KREATIZE a hardware startup will have immediate access to a network of audited suppliers and part manufacturers. This effectively liberates your company from request-for-quote (RFQ) processes, back-and-forth negotiations, and from having to develop the high-caliber supply network necessary to allow your business to operate effectively. We essentially allow startups to skip a painstaking part of the process, and provide them with better chances of success.

drill, milling, milling machine

2. Product Quality:

Another aspect that is very much tied to the supply network challenges discussed before is quality. Smaller companies often lack the resources to quickly find stable and quality suppliers. They also may not have the time and team expertise necessary to ensure quality supplies. Even upon finding the right suppliers, startups may lack the production volume to fully obtain the best service from them. Companies with larger bulk orders tend to experience better customer service, get preference for key talent, and as a result, get better overall quality from suppliers. We’ve seen many startups grow frustrated, rightfully so, as a result of their quality expectations not being met.

How can KREATIZE help?

By working with KREATIZE you will have access to our very own quality center. We are in close contact with each supplier, and work to ensure that your parts are being made the right way by our partners, thereby providing you with a high degree of quality assurance. At KREATIZE, we also bundle multiple orders from our clients and place them with our top-notch contract manufacturers. This has an obvious beneficial effect on lowering the price, but it also has a positive effect on quality. By bundling our orders, we get better customer service and access to our supplier’s key talent pools so we can ensure a better quality product. This allows us to provide startups with a way to get the same quality service as larger established players, from the very start of their development process.

3. Skilled Labor:

The manufacturing industry as a whole is struggling to recruit and maintain skilled laborers. Startups may feel this reality even more acutely, as established players often have more resources to attract the best candidates. The sheer fact that there is a skills gap across the industry also means that startups may have to work with less permanent or freelance talent, which can create additional operational complications.

 

How can KREATIZE help?

With KREATIZE you will be able to cut down your staffing needs and operate with a leaner team. For starters, your procurement needs will be almost entirely digitized and require less staff to operate effectively. You will also invest and build less manufacturing infrastructure that requires lots of manpower—you will find the suppliers you need with our proprietary cloud software. As stated before, by bundling, KREATIZE also gets better professionals from our top suppliers to work on your orders. The KREATIZE team acts as your partner throughout all of this. We will even help you review your component drawings to ensure you have the best product possible. Your engineers will get access to data from our cloud solution, allowing them to optimize their designs in real-time during the production process. KREATIZE provides your teams with insights and an agile platform for product innovation.

4. Systems Know-How:

Hardware startups usually have a high IQ in terms of product development and innovation. However, when it comes to actually setting up a system that can deliver their product within a proper time frame, they stumble. This is often because they lack experience in setting up high-volume manufacturing operations. The journey from initial vision to final product is a challenge for anyone, and startups may require more time or a more experienced partner to show them the ropes.

 

How can KREATIZE help? 

At KREATIZE we love working with hardware startups and have found that we can be the most helpful when we get involved from the beginning of a project. This way we can help them build supply capacity early on and address any problematic features within their initial component drawings. The latter is important because it allows us to assess any issues early on,  so we can recommend a material or part that may be more effective, and even less costly to make. These are insights that will allow your startup to scale more effectively. 

5. Scaling:

Speaking of scaling, in order for a startup to find success, it must bring itself to a position where it can foster and support the growth of its business. This means having the capacity to grow without major impediments, and the ability to gain greater market share and introduce new products to the market without major disruptions in business operations. This is the ultimate challenge for any startup and can only be attained after successfully tackling all of the previously stated challenges.

 

How can KREATIZE help?

In order to achieve growth at scale, a startup needs the right staff, systems, technology, supply chain, and partners. KREATIZE is a one-stop solution to help hardware startups address all of these factors. We provide everything you need to build a quality supply chain, access highly skilled labor, and manage procurement. Plus we offer a team of experts that is ready to give you valuable, real-time input as you design the components for your products. With all of this, we are offering you the agility necessary to scale your business and continuously improve your product, without fear of disturbing your existing business processes.

Are you a hardware startup that is looking to tackle these challenges? Do you have a problem in product development that needs immediate solutions?

Our mission at KREATIZE is to provide manufacturing that the world loves. This means helping your startup create innovative products, providing your engineers with the necessary tools to develop great products, and helping you to deliver your products to the world easily. With our proprietary and patented software, KREATIZE uses the power of cloud manufacturing to give you access to the very best industrial facilities through our expansive network of first-class suppliers.

Start now with your free account by making an appointment with one of our cloud manufacturing specialists today, and allow your business to enter the future of manufacturing.  Or by creating your account for KREATIZE Manufacturing Services today, and allow your hardware business to make a leap into the future of manufacturing..

Are you a large hardware business in need of solutions to your challenges? Please read our article for large hardware businesses to see how we can help you as well.

success, strategy, business

How to migrate your manufacturing process to the cloud

 

Cloud services are transforming virtually every facet of modern manufacturing. Whether you like it or not, the future of manufacturing is cloud manufacturing, and it’s looking bright! From lowering the cost of production to accelerating innovation, the benefits of cloud services in manufacturing are endless.

Whether you’re a traditional company or high-tech startup, cloud manufacturing offers many strategic advantages for organizations. From the start, a cloud manufacturing platform eliminates the costly and time-consuming processes of selecting the right manufacturing partners, obtaining attractive offers, quality assuring new partners and handling all production logistics. The time and resources saved can fuel innovation and be spent developing products that will make the world better.

cloud computing, internet, technology-3385323.jpg

But how do you make this move to the cloud? We know that moving all of your manufacturing demand to the cloud may feel daunting, and you may not know where to begin. But we’re here to walk you through it! We’ll show you how to make the transition as seamless as possible in just five simple steps. And we’ll share some examples of companies who did it successfully with great results.

Experts predict that 80 percent of companies will have closed their traditional data centers by 2025. Everything is moving in this direction, for good reason! 

Here’s why cloud services are the right solution to drive growth and remain competitive today.

The impact of cloud manufacturing: 

  • Significant cost savings—you only pay for what you use, without a large capital investment.  
  • Access to the best manufacturing capacities worldwide
  • Improved technical support and consulting from cloud service providers. 
  • Ease of use—the cloud does not require implementation or adjustments of the internal data infrastructure.

KREATIZE Manufacturing Cloud—the optimal solution 

Our KREATIZE Manufacturing Cloud gives customers access to production capacities without additional investments. It is as if you owned an expensive machine park without having to buy all the equipment and build it from the ground up. The acquisition of expensive manufacturing systems and lengthy inquiry and quotation processes are a thing of the past thanks to KREATIZE.

Here’s how to migrate your processes to the cloud in five simple steps with the help of our Manufacturing Experts:  

1. Analysis & Discovery:

To start, we get to know each other and define your current needs and challenges. We will analyze all your parts and requirements in a joint workshop where we will identify opportunities and areas where KREATIZE can help optimize your product development process.

2. Roadmap Definition & Proof of Concept:

The next step is to define our specific use cases and determine a roadmap for how we will proceed. We always start with concrete and actionable use cases that will add immediate value for your business. Most importantly, we will define measurable goals to be achieved through your collaboration with KREATIZE. 

3. Activate KMS & Initial Testing:

Your team will receive access to the KREATIZE Manufacturing Cloud, where you will upload your parts, together with one of our experts. With just a few clicks, you can now optimize each component, adjust the quantity, the material and the further processing and place an initial test order. 

4. Begin Production:

KREATIZE will find the right manufacturing capacities for your specific part, process and material. In order to make everything as easy and convenient as possible for you, KREATIZE is your only contact during the entire production process. We guarantee that your custom parts meet all of your requirements and take care of the logistics. This means that you do not need to deal with suppliers or quality issues as we work hard to reduce the workload for you to a minimum.  

5. Increase Project Scope + Long-term Partnership:

We work in close contact with each supplier and will be in constant communication with you to ensure maximum customer satisfaction. Over time, we can work together to increase the component complexity, introduce new projects, and explore strategies for our longer-term partnership. 

See it in practice! Here are three companies who made the transition to the cloud and the business results they have achieved.

Example 1: International company meets global sourcing partner

Company at a glance

  • International manufacturer of assembly tools for the furniture industry.
  • Sales = EUR 2 billion
  • Employees = approx. 10,000 
  • Procurement volume = approx. EUR 50 million

The challenge:

Cumbersome, expensive and time-consuming purchasing of special parts due to local procurement and central procurement system. In order to remain successful internationally, they needed to:

  • Optimize their procurement process to be less resource intensive
  • Enable their teams to be more agile in the design and development process 
  • Reduce local dependencies with a broader supply network 

Our solution:

KREATIZE was brought on as their global sourcing partner to automate their procurement processes. As a result, collaboration between procurement, engineering and production planning was increased and improved. 

Additionally, the company gained: 

  • Access to an global manufacturing network
  • A single source for managing their entire supply-chain (including: manufacturing, post-processes, shipping, warehousing and payments)
  • Expertise in scaling

Results:

With our approach, this company saved 10% in unit costs by securing more attractive hourly rates through an expanded global supplier network (via KREATIZE).  

Example 2: Agile product development reduces procurement bottlenecks

Company at a glance

  • Provider of weighing, cutting and weigh-price labeling technologies for the food industry
  • Sales = EUR 700 million
  • Employees = 5,000  
  • Procurement volume = EUR 25 million

The challenge:

Lengthy time-to-market due to long-standing, rigid internal processes and inefficient iteration loops. As a result, the company was facing: 

  • High project costs—up to 30% due to purchasing
  • Lack of systematic approach to control product development and manufacturing costs (could be reduced by up to 70%)
  • Procurement bottlenecks put workflow up to 5 days behind schedule

Our Solution:

We recommended adjustments to the development process to make maximum use of valuable time. The more agile processes recommended will have a lasting positive impact on the price and design of the product. Additionally, KREATIZE helped them achieve: 

  • Reduction in headcount due to decrease in purchasing resources needed
  • Design-to-cost techniques immediately implemented in engineering
  • Scaling for series production with optimized cost through machine hourly rates
  • Elimination of the RFQ process

Results:

This company achieved a 25% reduction in time-to-market with KREATIZE.

Example 3: One-stop shop manages entire purchasing process

Company at a glance

  • High-tech startup
  • Sales = EUR 3m
  • Employees = 50  
  • Procurement volume = EUR 500k

The challenge

As you can imagine, the challenges are different for a company of this size. For this company, challenges included: 

  • No existing supplier network 
  • Successful growth heavily reliant on seamless scaling of production
  • Viability of the product concept depends on agility and rapid response times 

Our Solution:

KREATIZE provided a one-stop solution for handling this company’s entire purchasing process, allowing them to: 

  • Manage and expand their production technologies
  • Receive the highest level of expertise in ramp-up
  • Ensure reliable procurement via KREATIZE cloud manufacturing service
  • Benefit from expertise and advice on product development from our experts

Results:

With KREATIZE this company saved 80% in its total cost of procurement.

We are proud to say that our offer has been well received by businesses of all sizes and we work hard to offer each customer the right solution. Get your account for the KREATIZE Manufacturing Services today

If you would like to learn more about the KREATIZE Manufacturing Cloud, our experts will be happy to speak with you. The best thing to do is to make an appointment with them today: Book a meeting with our Cloud Manufacturing Specialists.

drill, milling, milling machine

Goodbye Request-for-Quote

Hourly model cloud manufacturing offers a sustainable and accessible model for innovators of all sizes.

Production Plant

The hourly manufacturing model replaces the traditional request for quote process, giving businesses more resources to focus on their product. Instead of requesting a quote and negotiating every time you need manufacturing services, the hourly model provides a transparent hourly cost. This new paradigm in manufacturing services is part of the shift towards cloud manufacturing that uses data-driven decisions and resource management to radically improve the delivery of parts and components.

Introduction to cloud manufacturing

Cloud manufacturing, also referred to as CMfg or CM, transforms manufacturing resources and capabilities into manufacturing services based on a cloud platform. As manufacturing becomes more complex and integrated, cloud manufacturing offers a more sustainable and robust supply chain based on intelligent decision making and accurate resource management.

The hourly model of manufacturing

The hourly model for manufacturing services that we use at KREATIZE provides enormous benefits to both our customers and our preferred manufacturing service providers. It works like this; you place your order for manufacturing services via our online platform, Kreatize Manufacturing Services (KMS). Our cloud-based platform uses a proprietary AI-based software to analyze your request and find the best manufacturing solution for you. The hourly rate for the services you require is then negotiated based on expected future demand, process type, and complexity. The initial order is completed by manufacturers from our network of select manufacturing service providers around the world and delivered to you. Future orders using the same manufacturing process are submitted via KMS at the same negotiated price. The never-ending request-for-quote cycle is dead.

The hourly model procurement flow

Towards automation

The hourly model moves your procurement process closer to being fully automated, or at least to a level that removes the effort of constant negotiation, fact-checking, and discussion associated with traditional procurement processes. Once the hourly rate is negotiated, future orders are quickly placed, enabling shorter process time, lower transaction costs, and faster delivery times. This process is sped up by storing and managing technical drawings and CAD files in our KMS platform where the parts are ordered. This enables multiple manufacturers to access the same product files without emailing or updating.

KREATIZE Manufacturing Services

Robust Financial planning

Understanding manufacturing as hourly costs rather than whole job pricing provides financial stability to engage in innovation. The exact price of testing new materials or services can be understood and planned into future budgets. 

At a higher level, cloud manufacturing offers manufacturing without investment. Often when a company reaches a certain size, they will invest in their own manufacturing facilities to bring their procurement and service under control. Cloud manufacturing supports scalability through the arbitrage effect from a large network, utilization of individual capacity, and using global resources. This enables even large businesses to enjoy the safety of streamlined manufacturing without the massive investment.

Total transparency

Our cloud manufacturing platform analyzes and calculates process times for manufacturing services and shares this information with you so that the cost of production is absolutely transparent; this also reveals the true cost of complex projects. Figure 1 shows the overall setup and process time of a project with diverse custom parts.

KMS Analysis

Drives innovation and sustainability

Price transparency and low resource procurement mean design and development companies of any size can test ideas, knowing exactly how much it costs and how long it takes. The most significant benefit of cloud manufacturing is highly detailed resource management. The different physical and virtual resources on offer from suppliers can be dynamically assigned and reassigned according to user demand—no gaps in production, no additional fees added to compensate for slower periods, etc. Manufacturers can extract jobs from the pool of demand, while customers’ needs are distributed throughout a network instead of being placed in a line. 

This opens the possibility of innovation to both customers and providers. When resource management is done with a view to abundance, not scarcity, it provides the stability and space to explore innovation, whether that is new process models or creating new material prototypes.

Who is it for?

Cloud manufacturing benefits companies on both sides of the manufacturing coin. For customers ordering parts the financial safety, saved procurement resources and financial stability translates directly into faster time-to-market. For manufacturers, the model offers a more efficient and more data-driven method of managing their technical and administrative resources for manufacturers. The hourly model has been shown to be 31% less administrative work and provide a 17% savings on the total cost of procurement. 

The hourly rate model with cloud manufacturing is suitable for traditional fabrication processes such as turning, milling, waterjet cutting, laser cutting, and additive manufacturing processes, including filament fabrication, multi-jet modeling, selective laser sintering, and selective laser melting.

The problem it solves

Request-For-Quote (RFQ) is slow, expensive, and requires resources from both manufacturing and customer sides to manage. The process is wasteful and bears unnecessarily high transaction risk. The traditional RFQ process favors larger manufacturing companies as it requires intense resources to manage the individual negotiation of multiple jobs. This process has been fairly murky for some time. Customers are forced to accept quotes that are deemed reasonable, while manufacturers need to balance not knowing if they can retain customer loyalty. The hourly rate reduces both things by providing a clearer per hour cost for manufacturing that is based on the amount of commitment given by the customer. This model pushes for transparency from both sides.

Why now?

Manufacturers of custom parts and OEMs are under enormous pressure – because their manufacturing and production processes are often designed for constant demand, long lead times, and high volumes. Current trends, however, go in the opposite direction: technology is developing rapidly and the average life cycle of innovative products is getting shorter and shorter. At the same time, the demand for tailor-made products is increasing. This means: smaller batch sizes, shorter lead times, and product development cycles at lower costs are in demand. And all this in an environmentally friendly and sustainable way. The hourly model supports the mechanical engineering industry on this path of transformation and makes it more competitive, more transparent, and more innovative as well as making the supply chain more resilient. This approach creates a truly collaborative approach to product development and manufacturing.

Enabling agile design

The hourly model enables an agile approach to manufacturing that can determine the future of innovation-focused companies. Imagine a European furniture company with 1900 employees and a € 380 million turnover that manufactures various mechanical products for furniture. This company can use fixed machine hourly rates for their main processes such as 5-axis milling that allow it to precisely know its manufacturing costs. This enables the company to confidently invest in new product development either using new processes such as additive manufacturing or new materials such as carbon fiber without investment into the manufacturing process itself or building and qualifying a new network of suppliers.

ABB Robot
Source: ABB

Ready to give KREATIZE a try?

KREATIZE is the first company to have developed the hourly model for cloud manufacturing into our platform. In our digital KMS platform, customers and manufacturing partners can easily handle the complete process from ordering to delivery of their custom parts. Our customers can order a part directly online with just a few clicks or request a quote and have full transparency of their order at all times. 

Get your free KREATIZE account today and start getting access to manufacturing services without any additional investment.

milling, drill, cutting tools

How the “pay-per-part model” reduces risk, increases flexibility, and supports agile sustainability.

KREATIZE COO, Thomas Hoffmeister, shares why the pay-per-part business model is disrupting the manufacturing industry.

laser, cutting, machine-2795229.jpg

The Pay-Per-Part Model

A typical manufacturing service model often looks like this: a manufacturer purchases a piece of high-tech equipment from a supplier. They then need to have enough demand to keep that machine running at a capacity that delivers adequate return (as well as managing skilled staffing requirements, maintenance costs, upgrades, etc.). The constraints to all stakeholders in the design, procurement, and development cycle are evident.

The pay-per-part manufacturing model enables a specialist manufacturer to use a full-service machine without buying or leasing any equipment. Instead, they pay a previously agreed price for each produced part. For a laser cutter, this would be the price for each cut sheet metal part. In other words, you only pay for what they need. This allows the manufacturer (i.e., the company using the machine) to make their production processes more flexible and react faster to market changes.

Agility for all stakeholders

Typically manufacturing service companies design their business model around long lead times, continual capacity, and high volumes necessary to justify the investment in specialized equipment. The pay-per-parts model presents the opportunity for an entirely new business model that includes smaller batch sizes, shorter lead times, and low-cost product development cycles designed with the security of a set price.

Where previously a service such as a metal sheet cutting facility would require a minimum order volume to ensure relevant costs are met, a pay-per part model allows facilities to offer short runs for prototyping and development by drastically reducing the processing cost.  This creates space within the manufacturer’s own working cycle for innovation, testing, and experimentation and enables innovators to iterate designs earlier in the design process. This combination contributes to better end products coming to market more quickly.

Laser-cutting leads the way

The first iteration of the pay-per-parts model is being rolled out in a collaborative project in Germany. Munich Re is covering insurance, IoT service provider relayr, provides the data analysis for the financing model while manufacturing specialist TRUMPF supplies customers with the required production components, namely the machines for their factory lines and the corresponding software and services for manufacturing sheet metal parts. Klöckner & Co., one of the world’s largest producer-independent steel distributors, will be a business model development partner and eventually supply the raw material. Initially, the partnership will commence as a project under an agreed-upon learning phase.

The model will see manufacturing services providers gain access to the latest automated laser cutting technologies without the need for upfront investment; in addition, they are given the tools and insight to adjust production volume to demand. The planned performance guarantee offered by Munich Re, means businesses are insured against the financial impact of potential production downtime.

Goodbye Request-for-Quote. Hello KREATIZE.

Airbnb began on the premise that you could rent spare rooms in your house to host travelers looking for accommodation. Utilizing under-used resources has been adapted to everything from the extra seats in your car as you drive to work (the initial offering of Uber) to the excess space in your garage (such as the app Neighbor). Now this concept of reorganizing resources and demand is coming to manufacturing.

The pay-per-part business model frees up high-tech manufacturing services equipment from the bonds of long lead times and high volumes, opening the possibility for a new era of customer procurement based on data-driven resource management.

Just like a host on Airbnb communicates their availability through the company’s website, manufacturers can now log their manufacturing capacity via a platform such as KREATIZE. Our platform allows companies that offer their machine on a pay-per-parts model to mitigate their risk. In case the machine user cannot fully utilize its capacity, it can get additional orders from our KREATIZE customers. Manufacturing service providers feed their capacity status to the platform and, in turn, are offered jobs that match their capacity and expertise. 

On the other side, KREATIZE customers can order parts through our platform and connect to the right manufacturer who has the equipment and availability necessary for the job. By accessing hundreds (potentially thousands) of suppliers, customers can expect parts to be delivered faster, as we do the hard work of matching capacity and expertise via one customer request. The costs for both parties are clear, determined upfront, and managed through a single source.  This model covers traditional fabrication processes (turning, milling, waterjet cutting, laser cutting) and additive manufacturing processes (FDM, MJM, SLS & SLM).

Manufacturers are relieved of sourcing, managing, and retaining customers. Conversely, our customers (innovators, engineers, designers) get access to an intuitive platform that makes ordering parts super simple, significantly reducing the procurement burden. The days of Request-For-Quote processes are over.

A leap towards Industrie 4.0

Essential to the pay-per part and resource sharing model is a robust IoT infrastructure. Data is now at the core of manufacturing as the industry edges towards fully realized Industrie 4.0. The widespread deployment of sensors and smart devices throughout production facilities means massive amounts of data is available to enable advanced algorithms to be applied for decision-making.

Data analytics for industrial processes traditionally relied on conventional statistical modeling approaches. Companies in manufacturing industries have now successfully integrated engineering, science, and statistical modeling tools to develop large-scale process automation platforms. These systems are often known as ‘Advanced Process Control’ (APC) systems. They enable companies to optimize the efficiencies of their machines and processes. For example, an inspection tool in a sheet metal cutting facility might measure cut quality at the source and store the data in associated databases. The APC system, analyzing these output parameters, decides whether the laser settings (the input parameters) need to be altered to adjust for particular conditions.

As more industrial IoT devices and metrics become embedded within automated processes, different types of structured and unstructured data, including sensor data, images, videos, audios, and log files are being collected. More advanced data processing and analysis approaches will allow manufacturers to continue to leverage their data to inform decision-making and identify new or un(der)-used opportunities to improve productivity and efficiency. The growth of the pay-per-part and resource sharing model is pegged to broader developments in the quality of the gathering, analyzing, and applying data across the process.

Sustainable collaborations

Data-driven manufacturing efficiency, resource sharing, and innovative economic models are successes within themselves. However, the potential for a more sustainable and waste resistant manufacturing industry is essential for growth and innovation in the digitally advanced but resource-constrained conditions of the present. Lessons learned from the initial pay-per-part pilot will be valuable across the sector and drive the program’s expansion into other manufacturing processes.

Get your free KREATIZE account today and start getting access to manufacturing services without any additional investment.