Laurie, in an economic slowdown situation most of the companies may prefer on demand manufacturing. During the slow down period, the spending power and cash rotations are less and none of the manufacturing centre will go for huge capital investments. They prefer on on-demand manufacturing or assembling policy. The market mantra is “Demand Vs production’
On demand manufactruing is good for the supply chain as a whole because there is no dead inventory of the finished product at the manufacturer's end. For the ramaining supply chain , agile systems are required to keep up with the fluctauing and just in time demands of componenets from the manufacturers.
For customers, on demand manufactruing means they need to order first, based upon ,not seeing the real product but based upon the product catelogues. The customers will be blocking their money by making advance payments with the order.
So the factories will be running on custmer's money taken upfront alongwith the orders.
It's interesting you mention this, I've been talking about this a lot with my CTO at Arena as it relates to the viability of open-design. Manufacturers getting their start on sites like Kickstarter have relied on pre-committed orders and the on-demand model to grow business. We were thinking this could turn into a path where an open-design, on-demand model makes sense for some OEMs. For example, if you had a machine shop, you could publish a catalog of community-created open designs, and allow pre-paid demand to drive your production schedule, this would be a great way to get interesting, innovative products to the customer as needed.
Here's the full article if you're interested (but it's more about open-desin than on-demand.)
In my experience, on-demand works best for digital content, but still faces challenges in the hardware arena. Until one organization--such as a distrbutor--is willing to take on 100 percent of the risk of holding inventory, there will always be glitches that interefere with a true one-demand model. That said, it would eliminate a lot of problems in the supply chian if properly executied.
This seems to be a trend lately. Even though this practice has been going on for years, with the economic turmoil starting in 2008, it seems more companies are looking at keeping limited inventory so they don't have too much money tied up on items sitting in a warehouse. There will be some companies that lose business by following this practice, but others will manage just fine. Like you said, if a person wants a particular brand or item, they will wait, just not wait forever.
First of all, judging by your photo there is no way you could be old enough to have a daughter that drives a car ;-)
I have seen a lot of this just in time manufacturing in larger items as suppliers do not want to take the risk of holding stock. I reckon this trend will continue until the economy picks up and more people have cash to buy stuff. then people will not want to wait for their goods and so suppliers will be forced to hold stock or lose the customer.
I think this trend is only due to very conscience investors. Unless there is a demand for a product no-one wants to put money out for production. The same is in startup companies. Investors look for startups which almost guarantee a success.
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