Closer, quicker, more efficient: Create products where consumers are

The COVID pandemic severely impacted manufacturing with supply chain, production and employee absenteeism challenges. And one of the biggest areas of impact within manufacturing was the almost overnight shift in consumer demands. Customers wanted products now, not the next day or the one after. So, how do manufacturers meet these challenges? One way is through distributed manufacturing, through which products are developed and designed digitally and then produced at facilities that are closer to consumers.

By Robert Krüger, Martin Schubert, Felix Wunner, Jonas Gorlo and Tobias Nickl

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With distributed manufacturing, the product is developed and designed completely digitally and gets produced close to the consumer.

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The COVID-19 pandemic has shown that our globalized supply chains are not as resistant as some might have hoped. As many companies had to slow down production or stop it entirely, a supply shock hit the global economy. At this point, most countries had only a few infections meaning that they would have been able to continue working were it not for the missing supplies. This further strengthened the already ongoing debate around the potentials to decentralize supply chains. The central topic of this discussion is Distributed Manufacturing, meaning the production of a product close to the consumer.

With distributed manufacturing, the product is developed and designed completely digitally. The product file is then sent to a manufacturing facility close to the customer and produced there. The more production sites there are, the faster the customer can have their product. The implications of this development are significant, as a product could be designed on the other side of the world and delivered to a customer only using last-mile delivery.

Until now many companies produce abroad due to the lower labor and production costs. These cost savings could however soon be eclipsed by various advantages of Distributed Manufacturing, especially when using additive manufacturing methods.

Highly individual products at scale

One significant advantage of additive manufacturing is the possibility of producing highly individual products at a large scale, which is often called Mass Customization. In traditional, centralized manufacturing the same product is delivered to a large number of customers. The customers ordered this item because it most resembled their needs and preferences compared to competitive products. The key term here is “most.” A product that is exactly what the customer wants is unlikely, if not impossible, using a traditional mass manufacturing approach.

This is a problem, especially considering that the modern customer is increasingly interested in more personalized products and services. With additive manufacturing, the product can be customized to exactly fit the customer’s needs. And even without mass customization through 3D printing, distributed manufacturing would allow for much better customization of the product to demands from local markets.

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To truly leverage this advantage, however, the customer also has to be involved further in the development and production process. This is only possible with short supply chains and a digital value chain. Using distributed manufacturing the lead times are reduced significantly, allowing for much closer interaction. If a customized product would have to be sent around the globe after the customer designed it, this could mean a delay of a month between order and delivery, a delay that many customers are not willing to take. The reduced lead times also allow for much greater flexibility in the area of market and product strategy, as it enables the company to react quickly to trends and unpredictable demand. This is especially relevant since research has shown that short-term demand allows for much higher contribution margins.

Secondly, distributed manufacturing would reduce much of the supply chain risks and dependencies inherent to traditional centralized production systems. Due to exactly these dependencies, many companies were not able to continue working during the early stages of the COVID-19 crisis as supplies were missing. With distributed manufacturing using additive manufacturing methods, the only reason to stop production would be a lack of raw material which usually can be sourced from various different countries and companies. This allows for a much more diversified sourcing strategy, which in turn can lead to higher supplier competition, lowering cost.

Reducing transportation and logistics costs

This simplification of supply chains also bears another significant advantage, which is cost reduction in the area of transportation and logistics. With traditional supply chains, products have to be shipped on intercontinental trade routes, which leads to the need for warehouses in order to deliver customer orders quickly. These costs can be eliminated through distributive manufacturing, as the only thing that might have to be delivered intercontinental is the digital file of the product. A great example of how this cost-saving opportunity is already used in a different sector is The Coca-Cola Company. The bottlers produce the drinks locally and use only locally sourced raw material, if possible. Only the syrup concentrate is delivered, to them which is only a fraction of the mass and volume that would have to be transported and stored otherwise. With new manufacturing methods and a digital supply chain, this is also possible for an array of other manufacturing sectors.

The same rationale of the supply chain cost reduction also applies to a matter which is quite relevant for the modern consumer – sustainability. As supply chains are shortened significantly, not only the cost but also the greenhouse gas emission is reduced. Furthermore, in traditional production, it is often economically advantageous to overproduce in order to catch variable customer demands and avoid stock shortages. With distributed manufacturing, this is not really necessary since all products can be made to order and produced just in time.

How to build a successful Distributed Manufacturing model

Data management, order and production automation, and machine connectivity are the primary keys to successfully implementing distributed on-demand manufacturing:

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A digital qualified inventory is a data management system that provides a centralized virtual storage and collaboration platform for AM parts, enabling distributed on-demand manufacturing. It represents the digital value chain and will enable constant changeability and control of upstream data, with a complete digital part and production twin, and corresponding documentation. It is relevant to scale the digital inventory by making it accessible in multiple locations by all employees. Data is the lifeblood of any manufacturing facility. Integrating a tool that eliminates confusion and operates solely on data transparency allows actionable and measurable processes to thrive.

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Automating order intake and customer management brings a new level of efficiency to your additive manufacturing operation. Enterprise Resource Planning (ERP) software provides easy access to your team, as well as accurate pricing and comparison tools that ensure good AM production decisions – without requiring expertise, but the magic happens when order management is also automated. Custom part requirements, 3D file metadata, and communication are automatically transmitted to internal production sites or your distributed manufacturing network as complete, production-ready orders.

Distributed production networks bring resilience and efficiency to production. A digital marketplace is the best way to show employees what AM capacity is available and give them access to these resources. Your company has a single view to compare internal and external suppliers and make a choice based on speed, safety, or cost. Schedulers are able to safely route AM orders to new locations with a single click.

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To unlock maximum AM efficiency, companies must digitize the entire workflow from design to production. Manufacturing Execution System (MES) software increases transparency and accelerates the flow of information while scheduling production and post-processing. Employees can leverage data with intelligent part prioritization, dynamic scheduling, and customized AM workflows that match the way they manage production. To ensure production quality, the MES automatically generates job tickets, tracks each unit produced and receives real-time data through machine connectivity. Analysis of the entire process, from customer management to production, is done in real-time through machine connectivity. In the production flow, machine connectivity is the cornerstone of a distributed manufacturing model.

The solution for a successful distributed manufacturing model is anchored in a single digital thread that covers the entire AM value chain; end-users gain visibility into the entire process, from AM use case identification to order management and production planning. It ensures seamless communication within the organization, traceability of all relevant data, and the creation of standardized, repeatable processes.

Accenture & 3YOURMIND success story

To demonstrate and promote the model and vision of distributed manufacturing, the Accenture IIoT Innovation Center in Garching collaborates with different partners, mainly software providers for distributed manufacturing solutions. Among them, the Innovation Center joined forces with 3YOURMIND, a provider for a distributed manufacturing platform, consisting of an agile PLM, agile ERP and agile MES component. A joint demo was set up at the Innovation Center, connecting the existing additive manufacturing resources, i.e. 3D Printers. The agile MES optimizes scheduling, transparency and quality assurance monitoring throughout the AM production chain.

In a further step, additional Accenture IIoT Centers will be integrated into the platform to further promote the real benefits and opportunities of distributed manufacturing – on a global level.

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Robert Krüger, Martin Schubert, Felix Wunner, Jonas Gorlo and Tobias Nickl 

Robert is a Managing Director at Accenture and is the global lead for Engineering and R&D Digitization in Industry X. His focus is to transform engineering to enable innovation & agile development of higher quality products, assets and services at speed & lower operating costs in a global environment of increasing complexity. Start a conversation with him on LinkedIn.

Martin is a Managing Director for Digital Manufacturing in Industry X at Accenture. He helps clients to implement integrated manufacturing concepts, connecting the real world of the shop floor with the virtual world of IT systems, on their journey to a more agile and global manufacturing enterprise. Get in touch with him on LinkedIn.  

Felix is a Digital Business Integration Manager within Accenture’s Industry X practice. He is focused on systematic product development, autonomous driving and mainly on Digital Additive Manufacturing - the practice he is leading in the german speaking countries. Meet him on LinkedIn. 

Jonas is a Working Student at Accenture. At the Technical University of Munich, he wrote a thesis about the applications and economic viability of Additive Manufacturing in an industrial context in close cooperation with Accenture. This led to a continuation of research in this topic, resulting in a knowledge transfer from academic, leading edge research to Accenture. Start a conversation with him on LinkedIn. 

Tobias is a Digital Business Analyst at Accenture. He is focused on product lifecycle management and additive and distributed manufacturing. As part of his studies, he looked at the use of distributed manufacturing in times of significant delivery disruptions, which led him to further research in this area. He also supports the development of distributed manufacturing demo stations at Accenture. Get to know him better on LinkedIn. 

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