If you’re a leader of a company in an evolving industry, forecasting changes in sales from one quarter to the next is no easy feat. In such industries, it’s wise to look at business on a month-to-month or even week-to-week basis.
The source of this uncertainty depends on the industry, though technological or regulatory changes are often at the heart of it. You can, however, always count on this: Customer needs will change rapidly in evolving industries. Businesses operating in them must be able to anticipate these changes and respond accordingly—fast.
Every business wants to be nimble and capable of responding quickly. But it’s not always easy. Custom manufacturing offers a potential path for companies in industries in which change is happening quickly.
Here’s why.
Discovering Product-Market Fit
For decades, companies have relied on mass production with consistent and predictable production schedules to prevent stockouts and minimize uncertainty in the supply chain. Producing goods en masse, however, is not always the best option in evolving industries.
Assessing Customer Demand
When a company decides to mass produce an item, it does so based on clear evidence of customer demand. Its supply chain managers know what item its customers want, the product features they value, and the quantity with which it must be produced. Under such circumstances, mass production is the most efficient and cost-effective manufacturing strategy.
In evolving industries, the signals companies typically turn toward when gauging customer demand either aren’t there or are mixed. For example, imagine a scenario in which quarterly sales of a company’s top-selling product drop while sales for another in the product line slightly rise. In such circumstances, it’s impossible to say with certainty the changes in sales reflect a change in customer preferences or just a below-average quarter.
Custom manufacturing solutions enable companies to test the market. Rather than forcing customers to stick with their current product line, companies can meet with their teams to assess how well their needs are being met by the current offerings. During these meetings, representatives from the company have the opportunity to learn about how the industry is changing and how it’s affecting the customer’s business. This insight can be used to fuel the next innovations in the company’s offerings.
Developing Custom Products
Using the data collected during these meetings, companies can work with their custom manufacturing partner to generate small batches of products designed to custom-fit the needs of the customer. Eventually, if the company discovers other customers within the industry have similar needs that can be met through those new, custom-designed components, they can begin to mass produce it.
Custom manufacturing is a strategic method of learning about customer needs and developing new products to address them.
Determining the Most Cost-Effective Way to Manufacture New Items
Mass production typically entails a company placing an order and their manufacturing partner fulfilling it. Custom manufacturing, on the other hand, is a much more collaborative process.
Custom manufacturers typically assign a team of engineers and machinists to each account. These individuals serve as thought partners to clients, offering them expertise as they proceed through the new product development process and making suggestions to improve design efficiency while developing custom engineering solutions.
This consultative support is especially critical for companies in evolving industries. As mentioned before, there are very few settled questions for such companies. They don’t have a tried and true method for manufacturing their products, nor do they know of suppliers from whom they should source inputs. Engineers from a company’s custom manufacturing partner can answer many of these questions. After several production runs, they will have answers to a variety of key questions, including which component materials provide the greatest structural integrity and which suppliers can cost-effectively source the components.
Later, if the company decides to mass produce a part previously only built through custom manufacturing, they will know how to build it efficiently, cost-effectively, and based on the needs of their customers.
Providing Exceptional Quality Assurance to Support Early Adoption
Ultimately, customers will not be receptive to using a product recently introduced to the market if it is of poor quality or inconsistent from one unit to the next. Custom manufacturing alleviates many of these concerns.
Whereas mass production involves the manufacturing of tens and hundreds of thousands of units of a product during a single production run, custom manufacturing production runs are small. And, because the products are designed based on customer needs, they require a considerable amount of human oversight, including diligent quality assurance. The QA process involves inspecting, measuring, and testing to prevent product defects and minimize inconsistency between product units before the manufacturing run is completed.
By identifying and addressing the source of defects before the products hit the shelves, custom manufacturing ensures companies can roll out products that are built to their customers’ specifications, structurally sound, and ready for extended use.
A Rapidly Changing World of Business
Technological breakthroughs, global events, and changing regulations are constantly reshaping markets around the world. By forming strategic partnerships with custom manufacturers, modern companies can react dynamically to changing customer needs and keep up with the industry’s rapidly evolving ecosystem.
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