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Transitioning to Service Manufacturing

The Industrial Internet of Things (IIoT) continues to change the face of manufacturing. Just a few decades ago, few people could have envisioned something like phone alerts for CNC machining production reports. The increased demand to produce parts with tighter tolerances and lower cost has integrated cameras, robots, and data feedback systems into production facilities. One of the newest trends generated by IIoT is a concept that embodies a collective or cooperative approach. CNC machine shops are transitioning to service manufacturing. The capital investment needed for machines and tools in CNC manufacturing makes the industry a perfect fit for Manufacturing as a Service.

Overview

Just how does it work? A cooperative is a contractual arrangement of shared goods and/or services between multiple partners that provides benefits for all. Consider a housing cooperative, for example, or a credit union, where service fees are kept lower by sharing them amongst all users. Each member owns a share, and voting rights in the organization. The concept of removing a third-party service removes a profit centre and saves money. The origins of cooperatives date back over 150 years when small craftsmen could not compete with emerging mass production in textiles and other goods. It was later established as the International Co-operative Alliance (ICA) by Neale and Greening and many countries still follow the tenets founded by this alliance, like farming and artist cooperatives. Manufacturing as a Service (MaaS) offers this same approach in manufacturing through shared services.

The Digital Pathway

The digital advances in manufacturing have moved people away from the shop floor and into design and machine service roles. Robots, or cobots, digital files, automatic tool-changers, camera sensors, and other IIoT devices coupled with Artificial Intelligence (AI) allow CNC machine shops to run “lights out” manufacturing with flawless precision and seamless connectivity. If machine shops can run (almost) without people, this sets up the opportunity for a service model.

Beginning with the complexity of CAD/CAM systems, unique and complex parts can be created using 3D modeling and connected with toolpath feedback on multi-axis machines, near-perfect parts can be manufactured without the touch of a human hand. Further advances such as automatic tool changers, robots to load raw material, and automated sensors to test quality control on output have firmly established the possibility of autonomous CNC machining.

The Digital Roadblock

Those systems may be more difficult to implement, especially in smaller shops. Customer satisfaction and productivity are the major focus of most CNC machine shops. A complete halt of production to retrofit new digital products can be viewed as risky, especially for a smaller shop where the investment could take much longer to pay back.

Beyond ROI, shops also face a deep plunge into computer technology that they may have trouble adjusting to, both from a management perspective and trained staff. With heavy reliance on the internet, online security also must be factored in. These steps in proof-of-concept often stall many CNC machine shops from implementing new strategies.

Practical Manufacturing Solutions

MaaS (Manufacturing as a Service) provides a practical solution to these problems. The collective enterprise sets out to find several business owners with similar needs. Parts manufacturers collectively work with a group of CNC machine shops that run similar raw materials and finished goods. These owners collectively pay for equipment, maintenance, and staff through a collective agreement based on their use of production time. CAD/CAM designs are submitted for manufacture via the internet to any number of shops that are available to run the order. Raw materials can be managed in a just-in-time delivery system. And parts manufacturers benefit further from their designs no longer limited by the machines in their own shop.

Expertise for the machine shop focuses on efficiency and skilled maintenance of equipment. They no longer have the overhead of design and sales staff. Customers, or coop members, focus on end product design and marketing. They don’t have to invest in buying equipment to process the finished product. The third-party CNC machine shop has been removed from the process, saving money by eliminating that profit centre, but also by maximizing the use of the CNC machine shop with up to 24-hour production, to reduce overhead costs for the collective group.

Further Investment

Although this process seems idyllic, there are many factors to consider. Finding aligned businesses is just the first step in transitioning to service manufacturing. Working in computer codes and machine language that all parties can effectively work with is another consideration. Machine shops also must invest in metering devices, increase internet security, and implement change management in their existing facility. Even the development of easy-to-use client dashboards must be considered to bridge the gap between a machinist’s knowledge and the designer of a part to be manufactured. It seems like the future is pointing here, but the path is steep with many obstacles to overcome.

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