Now, more than ever, there is a digital push to move manufacturing processes to an automated format. Companies such as Amazon and UPS are testing new methods of order fulfillment 1 to consumers. However, manufacturers are currently facing a dilemma that has yet to be fully solved for: full visibility to consumer demand. Today’s manufacturing companies may end up with an excess of goods that consumers don’t want or need. How can manufacturing and supply chain processes be improved to mitigate this risk?
The automotive industry has effectively mastered the use of highly automated assembly lines. Often, this means robots acting as humans to execute repetitive processes. While this strategy works well for the automotive industry, there is concern about how effective it is across all industries. Additive manufacturing 2, the process of combining materials to make objects from 3D model data, is at the forefront of solving this innovation conundrum.
The concepts of digital fulfillment and additive manufacturing may have been met with more resistance at their inception. Now, these ideas are viewed as necessary components of a well operated supply chain rather than possible options. Organizations can improve their chances of success with cost models like zero based budgeting 3. The primary objective of the zero-based budgeting initiative is to shift the ROI focus from cost insights to value insights. Only then will we be able to successfully ride the wave of ever-changing digital standards.
1 How Digital Fulfillment Is Changing Manufacturing by Matthias Holweg, Benn Lawson and Frits K. Pil
2 Why Additive Manufacturing Will Ultimately Disrupt The Assembly Line by Janne Kyttanen
3 Four Reasons Why Zero-Based Budgeting Works by Kweilin Ellingrud