The World of Low-Volume Manufacturing

Low-Volume Manufacturing

Today, we are seeing leaders in the business talk about new research showing the manufacturers' capability in producing specifically tailored orders to meet their clientele’s needs in less time.  Products are market-ready in days, rather than weeks or months; and this waiting period is reduced drastically by a rather large percentage. 

How have we managed to make such basic and revolutionary changes in such a short period of time?  The answer is quite simple:  the advancement and revolution of computer software and 3-D printing. 

Conventionally, we have been taught that high-volume manufacturing was the way to move forward.  Now, we are seeing that Production Teams are benefiting from low-volume manufacturing; and this is the method that production lines use to meet today’s demands.

What is Low-Volume Manufacturing?

Low-volume manufacturing can be described as a manufacturer producing approximately 50 to 100,000 individual items based on the processes, tools and types of material that are utilized; both large and small companies will find this to be a lucrative model.  It also means that generally, products reach from the manufacturer to shelves in a shorter time-frame while offering the flexibility of modifying the design and responding to short product life cycles.

We need to comprehend the mechanics and benefits of low-volume manufacturing in order to know how suitable it is for each scenario.  We shall now explore the fundamental benefits of low-volume manufacturing.

1. Flexible Designs

There is a number of complex computer software which is capable of creating various designs of the first model, known as prototypes; and this process is completed in a short time-frame during the designing period, prior to the company officially launching a prototype.  A prototype is normally the first of its kind in terms of inventions and such.

A small quota of products is manufactured after the creation of the prototype; and this is the period in the timeline when any changes in the design are done without having a drastic effect on production and the customer’s order.  The manufacturer is able to halt production and make the necessary changes with the intervention of 3-D printing, so customers’ bulk orders can be placed on hold and any desired modifications can be done in real time as per the customers’ instructions.

The advantage of this systematic process is there is little to no wastage where there are unusable products or parts being unavoidably placed in storage since the design of the prototype was a failure.  This is why flexible designs are considered one of the prime benefits of low-volume manufacturing.

 2.  Reduction in Expenditure

While there are those who believe that it is more cost-effective for each item as we move from low-volume to high-volume manufacturing, this is not entirely true.  Firms spend considerably less funds in a number of ways because of the versatility of low-volume manufacturing as the investment in tool steel is known to be very expensive. 

For instance, as in the case of die-casting and injection molding, when a manufacturer spends capital on tool steel which is a distinctly different type of toughened and heat-treated steel that is used to make various types of machinery that manufactures products, it is very expensive to produce a large quota.  Since the production machinery will not be producing large quotas of about 100,000 pieces, the steel of a lower quality may be used to make these type of cost-effective production machinery thereby avoiding large investments; so it is possible for the company to reduce expenditure and this may be invested in other areas of the firm.  It should be noted that the manufacturer will still be able to produce high-quality products.  There are some companies who offer replacement production machinery parts at no additional cost.

3. Bridging the Gap

The benefits of low-volume manufacturing are many as in the case of having satisfied customers with these lines of products due to the fast rate of technological advancement and innovation.  As a result, there is the possibility of a long-term business-to-business (B2B) relationship.  In order to secure these B2B relationships, the developers are pressured to create futuristic designs and transform current ones into attractive market-savvy products for sale so that other companies’ distribution will not flood and saturate the market.

There is also the added risk that a company will experience when it is the premier organization to produce and sell innovative products in the market as this can lean to either side of the narrow line of success or failure.  Additionally, the waiting period is drastically reduced from the point of production to marketing; therefore, specialized machinery is not required to produce high volumes of items which leads to huge inventories.  It should be noted, however, that low-volume production leads to high-volume production when items are produced at a faster rate and with more competence.  The same may be said of the manufacturer’s revenue.

4. Leaving the Competition Behind

It is clear that the company will have an advantage over its competition through the use of the low-volume manufacturing method.  As a result, the company competitively acquires a larger portion of the market share; and the company’s earnings are increased as well as it becomes more recognized and appreciated.  It may be deduced that products go on sale at a faster rate; and in this way, manufacturers are able to make huge profits in a short period of time.

One may realize that there is less financial risk involved because there are less start-up costs to be absorbed by the investors.  There is room for design alterations during the production period so that the items are able to reach shelves much sooner. 

Manufacturers look forward to experiencing huge profits from low-volume manufacturing now that technology adaptability is seen to be the revolutionary way forward.

It should be noted, however, that manufacturers and other similar companies experience serious setbacks when it comes to advertising. Traditional Facebook pages and other forms of social media marketing is not enough to find and retain potential clients. LinkedIn has been noted to be a rather useful resource, though; but recent trends show that satisfied customer recommendations, in other words, word-of-mouth recommendations, are the best forms of advertising. Satisfied customers are repeat customers and the majority of referrals comes from this avenue.