It’s not just the last mile that counts – it’s the last minute
Personalised products and super fast delivery are rapidly becoming the new normal. The rise of the on demand market is part data driven, and part tech driven – for example using 3D printing. Never one to pass up an opportunity and cause potential disruption, retail giants Amazon are pursuing this idea with full force. The company has just been awarded a patent for a new custom 3D printing system. While some printers will be located in Amazon’s warehouses and with third party providers, perhaps the most interesting idea is to carry them inside delivery vans. In other words, the biggest global retail company is adopting Just In Time Manufacturing (JIT). What does this mean for their competition, and how will it change supply chains?
Many names, many aims
JIT manufacturing is a method of production aimed at cutting time and resource waste within supply chains. Widely used in the 1980s and 90s, JIT gradually became virtually synonymous with lean manufacturing – a technique for minimising waste without debilitating production. Other alternative names include cycle time management, time based competition and quick response manufacturing.
No matter what you call it, efficient manufacturing makes perfect sense for companies. In theory, it supercharges production, avoids unnecessary resource use and improves revenue. Other benefits include simplifying inventory, creating less waste, reducing suppliers, and meeting demands for efficiency. Revolutionising manufacturing via innovative methods is nothing new, but as well as business customers, Amazon’s latest patent is potentially bringing it to a much wider consumer base – everyday people.
If an important item were to break (say, a faucet handle) then getting a replacement can be vital. It may well be true that many customers don’t always need access to items this quickly, but the point is that this kind of manufacturing for consumers is about fulfilling a perceived need. Equally, businesses shouldn’t underestimate the sheer power of ordering something that arrives in under an hour. It’s also perhaps great news for the forgetful, especially when it comes to buying birthday presents. But aside from moulding consumer expectations, how will it really impact manufacturing?
Changing production and delivery
There is clearly a demand from both corporate and individual customers for drastically reduced delivery times and custom products. As of yet, Amazon are the only big retailer to receive a patent of this kind. Their move into 3D printing has been gradual but certain. Last year, they bought 3D scanning company Body Labs for at least $50m. This means that the industry behemoth is even more likely to dominate the market. Instead of setting up their own competing services, other companies will probably work through Amazon. It makes sense to use the resources of an influential business, but at the same time it will tighten Amazon’s hold over the market.
In terms of production methods, bringing on demand manufacturing to a wide consumer base will fuel expectations for deliveries which are almost instantaneous. Companies will have to adapt, and those that can’t may struggle to retain their customers. On the other hand, businesses that integrate JIT (or similar) methods will have their fair share of teething problems. Slashing inventories can be risky, for instance, as demand can be unpredictable, though the positive impact on resource management is certainly a benefit. The success of on demand manufacturing also relies heavily on open communications across supply chains. Luckily, combining Internet of Things, data and predictive analytics have improved this.
The adoption of lean, JIT, and other on demand manufacturing methods places the consumer at the heart of the process. There are certain considerations that Amazon and other businesses need to make before throwing themselves into JIT or lean production strategies. This includes working with suppliers who can get hold of materials quickly, and handling faults or returns on custom items. In future, JIT manufacturing will likely merge more comprehensively with automation to create supply chains that are even more efficient and customer focused than ever before.
Could your business or industry benefit from the adoption of innovative, on demand production methods? Will JIT manufacturing fuel the on demand market? Has superfast production and delivery become the new normal? Share your thoughts and opinions.