Pay-per part business model disrupts manufacturing industry

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The “pay-per-part model” reduces risk, increases flexibility, and supports agile sustainability

The pay-per-part model enables a specialist manufacturer to use a full-service machine without buying or leasing any equipment, presenting the opportunity for influencing entirely new business models through offering smaller batch sizes, shorter lead times, and low-cost product development cycles designed with the security of a set price. This creates space within the manufacturer’s own working cycle for innovation, testing, and experimentation as well as freeing up high-tech manufacturing services equipment from the bonds of long lead times and high volumes, opening the possibility for a new era of customer procurement based on data-driven resource management.

The first iteration of the pay-per-parts model is being rolled out in a collaborative project in Germany. MunichRe is covering insurance, IoT service provider relayr provides the data analysis for the financing model while manufacturing specialist TRUMPF supplies customers with the machines for their factory lines and the corresponding software and services for manufacturing sheet metal parts.

Can the pay-per-part model be an alternative to the traditional purchase of machines making it possible to enable innovative business models? Lessons learned from the initial pay-per-parts pilot will be valuable across the sector and drive the program’s expansion into other manufacturing processes.