Time to read: 8 min
In recent years, global economic disruptions have both revealed new weaknesses and amplified existing issues in the global supply chain — causing companies around the world to rethink their approach to manufacturing. Because these supply chain issues will likely continue for the foreseeable future, it’s time to re-examine the existing manufacturing model.
Distributed manufacturing addresses these current weaknesses by introducing greater geographic diversity and agility into the supply chain.
A decentralized model allocates production to a network of manufacturing facilities across a wide geographic area both domestically and internationally. The manufacturing network is enabled by cloud-based communications and file-sharing technologies. AI-powered simulation software and computer modeling create quotes and simulate and refine manufacturing operations. Production is centrally managed to optimize resources and facilitate communication between suppliers and customers.
Distributed production results in a more resilient supply chain better able to withstand disruptions, while providing companies with more pricing and lead time options than would otherwise be possible. Plus, digitally-enabled manufacturing networks facilitate design optimization, accelerate product development, and reduce overall time to market.
Large Companies Have Leveraged Distributed Production for Years
While distributed manufacturing service offerings are a relatively recent development, the benefits of distributed manufacturing have been realized by more established organizations facing increased demand for decades. For smaller companies and startups without the resources to build and maintain their own network of suppliers, however, decentralizing their supply chains was nigh impossible.
This created an opportunity for intermediaries to provide these services so that product companies of every size can access those same benefits. Because distributed manufacturing companies (like Fictiv) build and maintain the technological infrastructure and manage the network, their customers can easily access the same resources of a large conglomerate.
We believe this network of manufacturing partners democratizes manufacturing and levels the playing field. Massive production scale from individual requestors is no longer required because the networks are built to offer on-demand production that scales up or down depending on market demand.
Distributed Manufacturing vs. Traditional Manufacturing
Despite these benefits, traditional manufacturing is still the status quo for many companies. For some, it’s a matter of inertia, of being most comfortable doing things the way they’ve always been done. For most, it’s a matter of cost or expertise. Traditional manufacturing requires building (or buying) a large manufacturing plant to mass-produce the goods you need. This route requires significant capital investments in equipment for additional production or prototyping of new products. (Which is why, for many years, it was only an option for the biggest companies.)
And, those capital investments aren’t the only cost — equipment operation and maintenance are the most significant expenses in the conventional model. The added labor and overhead compound the financial burden, as does the time required for employee training and developing the necessary experience to produce quality products.
Not only that, but changeovers, preventive maintenance, and downtime slow traditional production efforts, while small lot sizes are less efficient with proportionally greater set-up times and tooling changes. Plus, storage space is required to hold product inventories.
Working with a distributed manufacturer alleviates these issues because the manufacturing partners in the network invest in and maintain the capital equipment, and have the trained employees necessary to produce high-quality products efficiently. And because the network operator manages the planning, scheduling, and process development, you get improved quality, faster turnaround times, and even reduced costs compared to traditional manufacturing methods.
How Distributed Manufacturing Works
Distributed manufacturing is a type of production system that utilizes a decentralization of resources and processes to produce goods. Instead of having all production in a central location, distributed manufacturing networks involve multiple locations and suppliers. In this type of system, all components and supplies are distributed to different locations, and each location is responsible for producing a certain component or components.
This enables more efficient use of resources and cost-effective production of smaller batches of products while allowing companies to be more agile and flexible, as well as take advantage of cost savings. Overall, distributed manufacturing allows an organization to take advantage of the benefits of decentralization and the use of multiple suppliers and locations to produce goods more efficiently.
However, getting the cost savings, improved efficiency, and supply chain agility and flexibility associated with distributed manufacturing requires a high level of coordination, investment, and active management.
First, you must find suppliers in a range of geographical locations that can provide the manufacturing services and source the materials you need. Then you must vet those suppliers to ensure they have the capacity and can deliver the quality of parts you’ll need on acceptable timelines. Next, you’ll have to figure out how to effectively distribute work among the suppliers and build the communications infrastructure to obtain quotes, place orders, and deal with design changes and other issues. You also have to coordinate and manage the logistics of shipping finished parts (including customs if your network is international) and build out a quality control system.
It’s a tremendously complex undertaking that requires a huge upfront investment in time and money and requires ongoing management from skilled personnel to function.
Why Use a Distributed Manufacturing Service?
While companies can develop and manage their own network of vendors to source the parts they need, doing so consumes significant internal resources. Distributed manufacturers provide comprehensive production and finishing services through outsourcing, and all you need is a 3D model to get the quoting process started.
When working with the right distributed manufacturer, you get:
- Access to a network of vetted suppliers with a wide range of capabilities
- A simple, fast, and easy quotation process
- Instant (or within 24 hours) online quotes and DFM feedback
- Transparent production tracking and order fulfillment
- Ongoing support to ensure project specifications are met and production adheres to project timelines
- Material certifications, inspection reports, and photographs of completed orders online
- Fast and easy reorders when additional parts are needed
Benefits of Distributed Manufacturing
There are many advantages to partnering with a distributed manufacturer, but there are 3 core benefits over traditional methods:
- Increased Speed
With a digital platform that delivers instant quotes and production transparency, and consolidates and facilitates communication in one place, collaborative workflows become possible. Those workflows accelerate prototyping and streamline the product development process to get you to market faster.
Plus, network operators intelligently allocate work within the network to provide the shortest possible lead times and enable some production steps to be executed in parallel to save time. Finally, on-demand production capabilities allow you to respond to the market quickly, and you eliminate the massive internal changeovers for short production runs required by traditional manufacturing.
- Reduced Risk
Distributed manufacturing services vet and manage their expert manufacturing partners to ensure that your products are made to spec and delivered on time, which reduces the risk of nonconforming parts. And because the model is built upon a network of preferred manufacturing partners, the risk of localized disruptions is all but eliminated because production can be quickly shifted to avoid them and maintain your timelines.
Not only that, having access to a network of suppliers makes it easy to scale production up or down to match demand. So you’re less likely to be stuck carrying excess inventory and can capitalize on market opportunities when they arise.
- Reduced Cost
With early DFM feedback, efficient communication, and streamlined workflows, you can spot and address problems early on, which prevents scrap and costly design changes down the road. And by tapping into a globally distributed network, you have multiple pricing options for every design. Lastly, you can avoid the huge upfront costs associated with building new production lines yourself and hiring and training employees to run them.
Taking a Hybrid Approach
Shifting to a fully distributed model of peer-to-peer production may be the right approach for some, but for companies making the transition out of a traditional model, a hybrid approach may work best. This generally entails companies owning their mission-critical components, and outsourcing production for everything else. This hybrid model allows companies to focus on their core competency while enjoying the benefits of the distributed approach.
In a nutshell, the hybrid approach outsources your weaknesses and leans into your strengths.
Get Started With Distributed Manufacturing
Ultimately, you have two options to leverage the power of distributed manufacturing:
1. Do it Yourself
Developing a distributed manufacturing system within your company requires a robust ERP/MRP (enterprise resource planning/material requirements planning) system with significant cloud space to build the infrastructure to run your distributed manufacturing network. The system should support the communication and complex activities required to manage production. You’ll also need highly skilled people to manage the system.
Here is a high-level list of tasks your system will need to do:
- Find, vet, and subcontract manufacturers
- Establish and enforce agreed-upon quality standards
- Issue and track purchase orders
- Schedule manufacturing operations and track production progress
- Manage material inventories and costs across multiple locations
- Oversee material shipment and order fulfillment (including customs)
Keep in mind that this is far from a comprehensive list, and every step in building the system is a time-consuming process that requires significant resources.
2. Partner with a Distributed Manufacturing Service Provider
Distributed manufacturing companies provide access to high-quality manufacturing partners that are thoroughly vetted and integrated into a well-run network. From a customer perspective, they get all of the benefits of distributed manufacturing immediately, without any of the start-up or maintenance costs. Making the transition is as easy as adding a new vendor (the distributed manufacturer) to your AVL (approved vendor list), and then ordering your parts.
Generally, the process begins by uploading your design to an online platform and selecting your material, manufacturing process, finishing options, and quantity. The distributed manufacturer’s platform technology then analyzes your design and selections to provide instant (or within 24 hours) quotes and design for manufacturability (DFM) feedback.
Depending upon the distributed manufacturer you work with and the manufacturing process you choose, the DFM feedback is generated by a combination of artificial intelligence and technical applications engineers. From there, production starts — if there are DFM issues, the manufacturer works with you to dial in the design before manufacturing begins. You then receive regular updates as your order is processed and manufactured, and you may obtain inspection reports, material certifications (when ordered), and photographs of the finished product before shipment.
To summarize, these are the general steps of working with a distributed manufacturer:
- Upload a drawing, choose your materials and manufacturing process(es)
- Receive DFM feedback and quotations
- Pick your quotation
- Place your order
- Receive regular updates on production
- Receive material certifications and photos of finished products before shipment
- Receive your finished parts
Picking the Right Partner
While easier than managing your own distributed manufacturing system, selecting the right distributed manufacturing partner is critical. The distributed manufacturing service you choose should be able to share information on their typical quotation turnaround time, how they protect your data, their logistics and communication processes, and how they navigate supply chain disruptions.
It’s also good to ask about manufacturing and security certifications (ISO, SOC type 2, etc.) A quality distributed manufacturing partner (like Fictiv) will deliver all of these along with world-class customer support to guide you throughout the process and ensure a good outcome with every order.
Distributed Manufacturing – Made Simple
The future is uncertain, but you can count on distributed manufacturing to deliver what you need — faster time to market, less risk, and reduced overall costs. You can develop your own global network of suppliers, but it’s simpler to leverage Fictiv’s manufacturing network. Fictiv is your operating system for custom manufacturing that makes part procurement faster, easier, and more efficient. We’re experts at producing custom mechanical parts, from CNC machining, to injection molding, 3D printing, and urethane casting, with intelligent, streamlined, automated workflows.
