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Supply Chain News: Will an Uber Model Work for Manufacturing Machine Time?

 

MakeTime is Linking Need for Production with Available Equipment Across Network of 800 Shops, but Challenges Remain

April 11, 2017
SCDigest Editorial Staff

With the huge success of Uber (taxi like services) and Airbnb (hotel like services), entrepreneurs have been looking at replicating the basic model to a wide swath of other sectors and applications, from truck freight transportation (Convoy) to home handyman services (Homey).

So it was inevitable that someone would find a way to try to make it work for manufacturing capacity, an area at once ripe for such digitization yet at the same time with a number of barriers to success.

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Rightly or wrongly, there is still a huge industry orientation to the manufacturing industry.


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A company called MakeTime, a startup launched by architect turned manufacturing entrepreneur Drura Parrish in Lexington, Kentucky, is hoping it has cracked the code.

The service is targeted at companies and individual needing relatively short production runs, maybe even as just a requirement for a single unit of something that has to machined in some way to be produced.

The jobs may be too small to attract the interest of larger contract manufacturers, which don’t want to go through the cost and hassle of taking on a new customer or order for jobs that won’t extend over some reasonably long horizon.

So finding smaller shops that have the capability and the availability to take the order is a problem, usuallt requiring lots of phone calls and emails, waiting for bids to come back, and trying to sort through those responses in terms of cost and lead times. The process is challenging and cumbersome enough for US domestic sourcing; other complexities and uncertainties enter the equation if a company looks offshore.

But at the same time, much US production equipment is sitting idle on any particular day. Overall, the Federal Reserve estimates current US factory utilization at 75.4%, below its long run average of 78.4%. But that includes of course many large factories that may run more full bore, especially in process industries such as chemicals that may operate 24 x 7.

Some estimates say US production equipment sits idle about 50% of the time.

So, can a service that can link demand to those idle machines be a success? 3D printing is one approach to the problem, with a growing number of services arising that can produce parts rapidly using additive manufacturing, under a concept increasingly referred to as "on-demand" or "distributed" manufacturing.

3D printing will be an important part of the future, that seems certain (see GE Makes Major Strides in 3D Printing, as Advances in Metals-Based Composition Opens Up Many New Applications), but for now and certainly for many years, many items will still need to be manufactured the old fashion way, with CNC milling machines, water jets, laser cutters and more.

So, MakeTime was created. It began by renting blocks of idle time from machine shops to artists and designers, and then later to business owners and original equipment manufacturers (OEMs).

It has managed to digitally connect so far with about 800 manufacturers, which provide their production equipment and capabilities and undergo a qualification process.

Companies needed production services upload their requirements in terms of CAD drawings or other files, required lead times (rush, standard, or flexible), etc., and MakeTime matches that need with one or more manufacturers in its network, providing a complete quote that spells our production, materials and logistics-related costs.

Its web site says that "Our proprietary matching algorithm makes sure your order gets placed with the best machine shop for the job every time."


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An article in Quartz magazine says that for now, companies using on-demand manufacturing are doing so cautiously - often for small, non-critical parts, with orders in low volumes.

There are many reasons to be cautious. Rightly or wrongly, there is still a huge industry orientation to manufacturing – a company specializes say in production for the automotive or aerospace sector and does not venture outside that industry.

Quality is also a concern. Qualification relative to quality processes is generally a big factor in selecting a supplier – and at an order specific level that sort of goes out the window with the MakeTime model.

However, on its web site the company says "MakeTime bonds every order that crosses our platform, which means we truly offer a 100% quality guarantee. If you’re unsatisfied, your parts will be remade or reworked at no additional cost to you. We take careful measures upfront to ensure both parties understand the scope of work. When issues do arise, we solve them promptly."

"It’s extremely nascent, I would say in its infancy as a concept," says Justin Rose, managing partner at Chicago-based Boston Consulting Group, told Quartz. "I find it hard to believe that a major automotive supplier would at some point have a production line entirely running [leased production facilities]."

There are challenges for sure, but MakeTime says it can significantly reduce the cost and/or lead time of many manufacturing orders, and if it can do that with quality results, an Uber for the manufacturing sector just might take off.

What do you think of the MakeTime model? Can it work? What are the key challenges? Let us know your thoughts at the Feedback section below.

 

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