manufacturing as a service

What Is Manufacturing-as-a-Service and Why Is It Important?

May 14, 2020 - Emily Newton

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The future of manufacturing — and probably every other industry — is looking more communal and collaborative by the day. Nothing demonstrates this better than the rise of manufacturing-as-a-service (MaaS). Everybody knows that it takes just one good idea to change the world. Yet, not everyone has the capital to get their idea off the ground all by themselves.

That’s where MaaS enters the picture. It’s a way to distribute and share the functions that are most critical in manufacturing today. Doing so eases the investment burden for smaller companies. It also helps us use resources more effectively and lowers the barrier of entry for companies that want to capitalize on new technologies. Let’s take a closer look.

What Is Manufacturing-as-a-Service?

MaaS is one of the chief opportunities unlocked by widescale business digitization. Look around you at the competitive global economy and the urgent calls-to-action to use Earth’s resources less wastefully. With challenges like these, using emerging technologies and connected services to make manufacturing more efficient, and businesses leaner, isn’t optional. It’s mandatory.

Manufacturing-as-a-service offers a way for companies to remain committed to their core mission. They can focus on product innovation while outsourcing the actual process, along with critical services and technologies, to an outside party.

The modern factory contains a host of emerging technologies. It features things like:

  • Sensors, edge computing and IoT systems for industrial equipment
  • Big data analytics for enterprise resource planning (ERP)
  • Cloud storage, connectivity and collaboration tools

If you want to open a grocery store, you might not have the cash on hand to open the refrigerated warehouses or even purchase the building you’ll occupy. Therefore, you lease the property and pay over time for continuous access to the assets your company needs to remain operational.

MaaS is similar. The company doing the outsourcing owns the intellectual property. They’re the ones innovating on their products over time. With MaaS, they don’t have to purchase and upgrade the ever-more-complex physical and digital manufacturing apparatus they need to get their products into users’ hands.

The chief benefit of MaaS for companies is that they get to consolidate their ongoing costs into an easier-to-manage single contract. It means lower overhead and improved profitability. However, cost savings are just one way to look at the opportunities MaaS represents.

How Is MaaS Revolutionizing Manufacturing?

You might think of MaaS as “cloud networked manufacturing.” The service provider may not be located anywhere near its clients’ facilities, yet it provides infrastructure for several companies at once.

You’ve heard of the sharing economy — usually in reference to platforms like Uber or Fiverr — but MaaS is its large-scale industrial counterpart. Here’s how it’s revolutionizing manufacturing:

1. Controlling Costs and Lowering Overhead

Manufacturers need lots of standard and specialized equipment to get batches of products out the door. Some of the most common industrial equipment categories include:

  • Industrial power systems and generators
  • Centrifuges and mixing equipment
  • Boilers and chillers
  • Conveyors, robots and material-handling equipment
  • Sorting and packaging equipment

This is a serious amount of overhead for an entrepreneur or small company that’s trying to seize the moment and get their product made. MaaS allows them to use a third party’s infrastructure to turn their concept into a reality. Doing this saves them considerable investment expenses, as well as the cost of labor, maintenance and upgrades.

2. Providing Access to New Technologies

A related issue for manufacturers involves the accelerated pace of technological innovation. Many companies prefer renting or leasing critical equipment because making a purchase outright might mean it’s out-of-date in a few short years.

The Internet of Things has introduced lots of innovations, some of which we’ve touched upon. Integrated equipment analytics, internet connectivity, automation and machine learning are all entwined with modern manufacturing. This raises the barrier of entry higher and makes equipment investments a more difficult pill to swallow for smaller companies.

Using manufacturing-as-a-service unlocks access to emerging technologies and their benefits for the client company. The MaaS provider pays for the equipment and plans for its eventual retirement and replacement. In the meantime, the client company reaps the benefits of the technology without fretting about oftentimes-harsh upgrade cycles.

3. Boosting Innovation, Customization and Time-to-Market

Additive manufacturing, known as 3D printing, could become the keystone in manufacturing-as-a-service.

Multiple companies are demonstrating how 3D printing could become the most shareable manufacturing asset to date. One example, Techniplas Digital, has made itself the “Airbnb of auto e-manufacturing” by offering remote 3D printing services to companies that need automotive parts and other critical machined products.

This business model is distributed in nature and efficient. Techniplas is an online platform that connects clients with manufacturers that have unutilized 3D printing capacity and geographical proximity to the client. The result capitalizes on the benefits of 3D printers. They provide faster prototyping, quicker time-to-market and the ability to personalize short runs of products. It combines innovation with the power of the sharing economy.

The Case for Manufacturing-as-a-Service

Companies with in-house infrastructure are under constant pressure to maximize their manufacturing capacity utilization and eliminate downtime. A production line that isn’t running is bad for business — and it represents a misplaced investment.

As Deloitte noted in May 2018, the United States has had a difficult relationship between manufacturing capacity and output for the past several decades. Companies’ average manufacturing capacity utilization ebbs and flows over time, but there has been a definitive downward decline since at least 1970.

Productivity-boosting technologies are a main culprit for this downward trend. Technology helps us do more work with fewer investments in physical infrastructure. The decline in manufacturing capacity utilization means the world has a greater surplus of facilities and equipment over time. Companies that invest in their own infrastructure will see those assets sitting unused more than they’d like. This is a waste of time, capital and energy.

The case for MaaS practically makes itself when you consider how reliably manufacturing productivity has increased and how steadily capacity utilization has fallen.

The Internet of Things has brought industry to new levels of productivity. Meanwhile, the sharing economy creates a new business model. Those with capacity to spare can share it, for a price, with those in need. Everybody’s bottom line benefits, and the planet has fewer factories operational they aren’t producing goods.

Featured Image Credit: Technology vector created by vectorpocket via Freepik 

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Emily Newton

Emily Newton is a technology and industrial journalist and the Editor in Chief of Revolutionized. She enjoys reading and writing about how technology is changing the world around us.

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