Description
Manufacturing items at the request of others (and at their risk)
Major variations
Performing some manufacturing steps (e.g. laser cutting shapes that are then finished by hand) versus manufacturing complete products.
Potential impacts
- Enabling people who want to have products made to source them locally – creating benefits for the local economy
- Making advanced manufacturing technologies (such as digital fabrication techniques) available as a service in locations where there is a lot of analogue manufacturing can have a big impact on productivity and quality, thus making existing industry more competitive.
Advantages
- Can be a good way to earn revenue using assets you already own and people who already work for you
Challenges
- Most orders are likely to be for small volumes, and you need to ensure you are making enough money to cover the engineering time needed to set up the production run. Charging properly for this can make the order unattractive to customers.
- This tends to be quite a price sensitive market so margins may be slim
Business model canvas
Key partners
- Suppliers of materials & components
- Manufacturers with complementary capabilities to you
- Government or NGOs who want to support local industry
- Manufacturers Associations or similar
Key activities
- Connecting with clients
- Design for manufacture
- Manufacturing
Key resources
- Technical expertise
- Machines & equipment for manufacturing
Value propositions
- Flexible, fast production of a wide variety of items
- Availability of specific manufacturing technologies not commonly found locally
- Faster, more accurate, or more efficient ways to produce things
- Ability to produce shapes that cannot otherwise be made
Customer relationships
- Long term relationships with repeat customers
- Occasional transactional one-off clients
- Trust / reputation important
Channels
- Events aimed at local manufacturers
- Direct contact with potential clients (build relationships)
- Public open days can raise awareness of what you offer
Customer segments
- Local manufacturers or artisans who lack some technologies
- Manufacturers who wish to buy in a component rather than make it
- Organisations that provide a product it is not their core business to make
- Institutional consumers: healthcare facilities, schools, etc
Cost structure
- Materials & components (unless customer supplies)
- Machine usage and other direct production costs (labour, electricity, etc)
- Engineering time – it is essential to price this in, as in most situations it is rare for customers to bring designs that really are manufacturing ready
Revenue streams
- Typically a price is charged per unit manufactured
- Setup costs or engineering time may be charged as a separate item rather than included as part of the per unit price (this can make it clearer why price will vary according to the number of units produced)
Complementary models
Sharing knowledge and supporting others to develop skills, ranging from hands-on machine usage to soft skills like CV writing.
Providing access to machines, tools, or other equipment for individuals or businesses to use
