3D Printing / Additive Manufacturing : Its Disruptive Impact on Supply Chain

Picture phones and hand-held mapping devices were once devices of the imagination until technology made them real. Now, we can add 3D printers to this list of inventions. 3D printers have a huge potential to bring revolutionary changes. 

3D printers have been around as huge, costly machines for three+ decades, advances in digital scanners and software now make 3D printers accessible tools that can design and create products that once required a factory and dozens of parts. In fact, 3D printers can make items that even traditional factories can’t. With 3D printing, it’s a whole new game. 

What Can 3D Printers DO for YOU?

We are just starting to see the worldwide impact of 3D printing which is also known as Additive Manufacturing. What could previously only be imagined can now be made in minutes. Need a car 3D printed - Yes you can do it! Need a custom-fitted prosthetic hand or hearing aid? Print it on a 3D printer. Stuck on a freighter in the middle of the ocean with a broken engine valve? Print a new one. Have an idea for a cool new product? There’s no need to raise capital and have it manufactured – just design it yourself and print it on your 3D printer. The possibilities seem endless. 

3D-printed products will be made of advanced materials that are stronger, longer-lasting and multi-purpose – like bandages that help wounds heal. And because they can be manufactured in small runs, products like personalized replacement knees and hips are already being customized for individual patients. 

Even the U.S. Army is exploring the use of 3D printers to produce battlefield rations with nutrients customized to a soldier’s individual needs. 

3D Printing: A look at the Trends

3D printing is a hot topic; President Obama even gave it a plug in his 2012 State of the Union Address, saying, “3D printing . . . has the potential to revolutionize the way we make almost everything.” 

Elon Musk, CEO and CTO of Space Exploration Technologies Corp., or SpaceX, said that with 3D printers, “I believe we are on the verge of a major breakthrough in design and manufacturing . . . it’s going to revolutionize design and manufacturing in the 21stCentury.” 

The 3D printing market is growing fast. Estimates by Wohlers Associates, a consulting firm that reports on 3D printing trends, indicate annual industry growth of 20% to 30% as major manufacturers adopt the technology, such as GE Aviation which makes fuel nozzles used in its jet engines through 3D printing. 

Technology research and analysis company Canalys projects the global 3D printing market will go from $2.5 billion in 2013 to $16.2 billion in 2018. 

3D Printers and the Supply Chain

As technology made the world contract, companies expanded overseas and even local firms partnered with suppliers across the globe, leading to the rise of the global supply chain. In the not-so-distant future, 3D printers could transform it to a globally connected, yet totally local supply chain. 

Because 3D printers inherently create a close relationship between design, engineering, marketing and manufacturing, their use holds the potential to shift some manufacturing away from low-wage countries and closer to the customer base, so companies can more quickly respond to consumer demand. 

Factories could be affected, too. Additive manufacturing eliminates repetitive production tasks, so workers would need a higher level of skills to make more sophisticated goods. Factory jobs could dwindle as the focus shifts to design and engineering, logistics and IT. 

Here are ways in which 3D printers could alter the supply chain:

• Manufacturing lead times will be substantially reduced (think minutes, not days).
• New designs will have a shorter time to market.
• Customer demand will be met more quickly.
• Materials will be used more efficiently, as leftover substrate powder can be repurposed for the next project.
• Logistics will adjust to print-on-demand, eliminating the need to carry inventory. 

3D Printing ! Disruptive technology which will disrupt manufacturing and supply chains

The rise of 3D printing will greatly affect manufacturing and the supply chain. Its value in creating complex items that were once made on assembly lines has the potential to eliminate the need for high volume production from a traditional factory, as well as the factory workers. 

We can also expect the supply chain will become more efficient, more LOCAL and yet globally connected !

Today’s supply chains suffer from global sprawl, with months required to design and source components, and then assemble them into a finished product. Much of the time and expense in supply chains derives from the need to negotiate with and monitor suppliers. All this is made worthwhile due to the benefits of accessing specialization and competitive advantages from around the world.

The specialization and economic benefits of globalization become outdated in a world where a 3D printer and some spools of wire or other generic inputs can make nearly any desired product relatively quickly. Generic inputs require far less negotiation and planning. They also do not become obsolete and the quality is standardized, meaning that there’s less need to monitor supplier performance. Since nearly all value is added by the 3D printer and inputs are relatively low value, standardized commodities, Just in Time Inventory (JIT) and other inventory reduction approaches will be needed less.

Plan: The Consumer Takes Charge : 3D printing’s most amazing impact will be how it puts consumers in charge of the supply chain—and most companies are not ready. The old supply chain reference models put the company in charge of nearly the entire supply chain: developing new product offerings, sourcing all components, overseeing manufacturing and assembly, and finally distributing products to the retail level. The customer only gets to order the product after all the work is done, choosing among available offerings. In this model, companies take a huge gamble on whether and how many of a product they will sell, leading to waste and diminished profitability.

3D printing means a greatly simplified, highly responsive, and infinitely flexible supply chain fulfills the order. In the future supply chain, the customer places the order first, and then a local, highly automated 3D printing shop produces the finished product and then delivers it, often via drones. Rather than plan, source, make, deliver, and return, a future supply chain model will start with the consumer order which will initiate make, deliver and return.

The demand economy is disrupting every sector...
When demand economy is paired with the advent of 3D printing, is a true game changer for the manufacturing industry. It should be a warning sign for companies that if they don’t innovate their supply chains, they may become irrelevant as consumers will have more control of the production of their own products.

The specialization and economic benefits of globalization become outdated in a world where a 3D printer and some spools of wire or other generic inputs can make nearly any desired product relatively quickly. Generic inputs require far less negotiation and planning. They also do not become obsolete and the quality is standardized, meaning that there’s less need to monitor supplier performance. Since nearly all value is added by the 3D printer and inputs are relatively low value, standardized commodities, Just in Time Inventory (JIT) and other inventory reduction approaches will be needed less.

To Summarize: 3D Printing will tear up the global supply chain apart and re-assembles it as a new, local system.

The traditional supply chain model is, of course, founded on traditional constraints of the industry, the efficiencies of mass production, the need for low-cost, high-volume assembly workers, real estate to house each stage of the process and so on.

3D Printing / additive manufacturing bypasses those constraints. 3-D printing finds its value in the printing of low volume, customer-specific items, items that are capable of much greater complexity than is possible through traditional means. This includes hollow structures like GE's fuel nozzles that would normally be manufactured in pieces for later assembly.

This at once eliminates the need for both high volume production facilities and low level assembly workers, thereby cutting out at least half of the supply chain in a single blow.

From there, the efficiencies of that traditional model stop making sense, it is no longer financially efficient to send products zipping across the globe to get to the customer when manufacturing can take place almost anywhere at the same cost. The raw materials today are digital files and the machines that make them are wired and connected, faster and more efficient than ever. And that demands a new model—a need to go local, globally.

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