Made to Order
To have a large inventory, by definition, means to have a large amount of products that you haven’t sold. It’s a necessity for big businesses and distribution companies–Can you imagine ordering a book from Amazon and having to wait while the book was printed up and bound? Of course not.
But small businesses across the country are starting to realize that, while having well-stocked inventories is vital to some, it’s not necessary for their particular business. A recent article in Business News Daily explores this trend.
“There are big benefits to producing the products this way,” Kirby Best says in the article. Best is CEO of Performance Healthcare Products, a company that started after Best made his wife a pair of pajamas from moisture-wicking fabric, to help with the night sweats her ongoing chemotherapy was causing her. The company now has their pajamas and products manufactured as an order comes in. One thing this allows them to do is make every product to the customer’s specifications. They produce the garments in their own factory in Cullman, Alaska.
“We have complete control over the process and the quality and it’s very quick,” Best says. A single product can be in the mail within 48 hours of being purchased online.
And what about new products? Mass-producing an untested design can be dangerous.
“[On-demand manufacturing] makes it easier for firms to design and introduce new products. Most product innovation nowadays is U.S.-centric due to the fact that it requires a significant investment in equipment that has low utilization,” Northwester University professor Had Allon says. “On-demand manufacturing will enable smaller firms to introduce new products and quickly alter their offering.”
There are plenty of other businesses and industries that can benefit from or utilize on-demand manufacturing. I know jewelry designers who, especially when introducing a new product, will only make one or two samples of a product, then make the rest as they’re ordered, whether the pieces are made by hand or cast from wax molds. In some ways, this is out of necessity– they just can’t afford to have every piece in every size and material. But it also has added benefits.
An inventory is an asset, but it could also be a liability. Especially an uninsured inventory- if anything were to happen to the building or area they were being stored in, their value could instantly burn or wash away. And then there’s always the chance that an inventory won’t ever sell.
Like most business ideas and methodologies, making products to order will be well suited for some businesses, and utterly counterintuitive for others. But by finding solutions that work for them, and thinking outside the box, companies like Performance Healthcare Products are able to keep overhead down and profits up.
Read more from the Business News Daily article here.