How Digital Platforms May Disrupt Manufacturing Industry

How Digital Platforms May Disrupt Manufacturing Industry:

New Ecosystem Business Models Can Utilize 97% More Capacity 

In his podcast interview CEO Thomas Hedenborg states:

“There are studies testifying that only 3% of total installed manufacturing capacity is utilized. The one who creates a platform that connects this ample underutilized resource to a need is sitting on a gold mine.”

Is there room for Uber efficiency in utilizing industrial capacity?

In addition to noting the unused capacity Thomas Hedenborg also makes an analogy to Uber in the podcast.

Some business people are tired of Uber analogies and some even state that Uber has no reflection in business to business.

But stop to think!

What if your production machinery would make you money even when you are not producing goods that you sell to your current customers?

Let’s play with the idea a bit.

Fastems supplies flexible manufacturing systems and robot cells to the metal cutting industries to automate the manufacturing and finishing processes.

Fastems strives to improve their customers’ competitiveness through automation: PRODUCTION CREATES VALUE ONLY WHEN IT IS RUNNING

How existing capacity has been utilized better?

Thus far companies have been able to fight varying demand by outsourcing. Production partners have been likely to reduce the cost burden of overhead capacity, as it is a shared resource. Similarly, maintenance and management and other fixed costs are shared.

Companies operating as a production partner typically can host a certain number of concurrent customers while maintaining the quality and availability requirements. This automatically leads to reaching a plateau in the benefits for both buyer and seller.

But let’s look a bit further.

How digitalization can bring disruptively better utilization?

I see two main elements that will change the world of manufacturing:

• Product design documentation is already being digitalized and improving all the time.

• New production technologies are coming: Additive manufacturing (also known as 3D printing) is constantly developing and starting to truly challenge traditional machining. Likewise, CNC machines are developing with more and more open interfaces. And same happens in all manufacturing technologies.

Now. Imagine that in need of a part, you send a digital request for parts to an open platform where vendors with matching capability can rapidly react. “Yes I can do these in x days at this price”. You suddenly have a global capacity at your hand.

Platform also can drive market proximity, which means more sustainable use of resources via minimized transportation.

New business era: Manufacturing ecosystem

We will see the ecosystem of demand and supply to become a dynamic connected network. The one who creates the platform truly is sitting on a Gold Mine!

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