Low Volume Manufacturing: Guide For Small Businesses 2020

Low volume manufacturing Introduction

With the intensification of market competition, the market environment of modern enterprises has undergone profound changes, and enterprise competition increasingly emphasizes competition based on customer needs.

Therefore, the production methods of enterprises have gradually shifted to various advanced production modes based on flexible automated production. The current production types can be roughly divided into three types: mass flow production, multi-variety small-batch production and single-piece production.

At present, China's manufacturing industry is mostly concentrated in multi-variety and small-batch production enterprises, and this production method is beginning to occupy an increasingly important position.

What is low volume manufacturing?

With the continuous development of modern manufacturing technology, companies are increasingly looking for flexibility and customization in production. In recent years, low volume manufacturing has become more and more popular. As a term, it is difficult to define in detail.

To put it simply, low volume manufacturing is just the opposite of high volume manufacturing. It uses different types of technologies to produce a small number of products, ranging from a few hundred to a few thousand.

What are the benefits of low volume manufacturing?

There are four main reasons why customers choose low volume manufacturing

First of all, low volume manufacturing has some cost advantages compared to high volume production. In some cases, even if the quantity exceeds 100,000 sets. Some special materials are still suitable for low volume products.

For a single request to produce several hundred to thousands of products, the cost advantage of low volume manufacturing is obvious.

Secondly, low volume manufacturing is very flexible, and products can be adjusted and modified at any time based on consumer and market responses. Once the production parts get to the high volume manufacturer, such adjustments and modifications are difficult to achieve.

If there are defects, they can be adjusted quickly.

Third, the timeliness advantage of small volume manufacturing can help customers put products into the market at a faster speed, which is very important for some manufacturing industries.

Finally, small-batch production can verify the rapid prototyping of products at the lowest cost, effectively avoiding problems that may occur during mass production parts. The advantages of high quality low volume production parts make it a bridge between prototype and mass production, which is suitable for many different industries and products.

Disadvantages of low volume manufacturing?

1. Production costs increase because economies of scale cannot be enjoyed.

2. It is difficult to respond immediately to the response of market demand.

Low volume Manufacturing Cost

Low volume manufacturing is a great bridge between prototyping 1 to 5 units and mass manufacturing more than 200 units

With reduced tooling costs like silicone molding and duplication process for small quantity production will be very effective For better understanding here is one simple calculation for a parts with a quantity of 15 units :

Prototyping (3D printing / CNC Machining)

• Tooling cost : 0 USD
• Cost by units : 230 USD
• Total : 15 * 230 = 3450 USD

Low volume manufacturing (Silicon molding / Urethane casting / Vacuum casting):

• Tooling cost : 1000 USD
• Cost by units : 35 USD
• Total : 15 * 35 + 1000 = 1525 USD

Mass manufacturing (injection molding) :

• Tooling cost : 4500 USD
• Cost by units : 2.65 USD
• Total : 15 * 2.65 + 4500 = 4539.75 USD

What is Mass production?

Mass production is a type of multiple production in which a manufacturer produce parts using cnc machining, injection molding, and rapid prototyping techniques. The same parts and services are produced on a large scale.

Features & requirements

• Manufacture of the same products and services on a large scale to meet the need of the customers

• There is a high potential for rationalization in the manufacturing process

• Best possible utilization of the available resources

• No high qualification of the production staff required

• Future production program generally easy to define

• Switching to other products is not easily possible

• Flexible response to customer requests is not possible

Batch Production Advantages

• Concentration of the work preparation, the production process and the sales tasks on a product that is produced in large numbers.

• Possibility of rationalizing the manufacturing process

• The best possible utilization of resources leads to a fixed cost degression and consequently to a reduction in costs

• Inflexibility of the company, ie product lines cannot be changed easily.

Challenges of high-mix low-volume production:

In the manufacturing industry, in order to meet a wide variety of customer needs, high-mix low-volume production of one product with various specifications is required.

What is high-mix low-volume Manufacturing?

High-mix low-volume production is a production method in which products with low similarities (functions/designs) are produced in small amounts in accordance with customer needs. Until now, the mainstream of production lines was mass production, where many single products were made.

In mass production, quality can be made uniform without being affected by the skill of workers, and further cost (unit price) can be expected to be reduced. However, in recent years, with the diversification of customer need such as age, gender, region, season, etc., various products have been distributed in the market and the life cycle of products has been accelerated. The number of companies working on small-volume production is increasing.

Advantages, disadvantages and problems of high-mix low-volume production

Compared with conventional mass production, there are advantages and disadvantages in high-mix low-volume production. After taking a bird's eye view of them, we will also consider the issues that must be solved in order to improve profits by introducing high-mix low-volume production.

Merit

The advantage of the small volume production is that it can meet a wide variety of needs, improve customer satisfaction, and reduce the risk of holding parts inventory.

Responding to a wide variety of customer needs

A professional CNC machining or an injection molding company can promptly provide products that meet diverse and delicate customer needs that a single product could not meet.

Reducing the risk of holding inventories

High-mix low-volume production can reduce the risk of holding unsold inventory due to the nature of producing just what you need.

Demerit

On the other hand, the disadvantages are an increase in final cost and a decrease in production efficiency.

Increased cost

manufacturing one product with different specifications, there is concern that the cost will increase due to an increase in the number of materials that can be purchased from the same raw materials. Another point is that management costs are incurred for each product type.

Decrease in production efficiency

When the specifications of products change, it is necessary to change the setup and production line. Since work is stopped during this change, the final production efficiency may be reduced.

New human error countermeasures that occur by relying on human hands

In this way, considering the advantages and disadvantages, the key to high-mix low-volume production is how to improve production efficiency and not have inventory.

On the other hand, looking at customer cases, it has become clear that human error countermeasures are also an operational issue because it is essential to establish new production lines manually in high-mix low-volume production.

Conclusion

The biggest advantage of low volume production is that it is possible to select and focus on the most time to market products by testing the needs of various consumers and identifying the bestselling products. However, in the general small manufacturing industry, it is impossible to maintain scale production under a certain quantity or there is a large price difference depending on the quantity.

Eventually, it is difficult to bear the high production cost, and development costs increase because various products must be developed at once.