Industry Outlook: 3D Printing and How it Will Revolutionize the Supply Chain


The Demand Economy + 3D Printing = Holy Sh** Moment for Old School Manufacturers

We are becoming an on-demand culture in nearly all aspects.  It used to be acceptable to answer an email within a week.  Now you need to respond the same day (sometimes within minutes).

Consumers and businesses alike are making decisions with a heavier focus on how long it will take for the product to get from A to B.  In fact, companies are beginning to rely on 3D printing to stay competitive in certain markets.

This seems like a “no-brainer” when you compare a typical supply chain model to the simplistic way 3D parts are produced.

Michael Gravier said it best in a recent article to Industry Week.

“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 and when 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 supply chain model below illustrates how complicated the supply chain can get between production and delivery to the consumer.  3D printing puts consumers in the driver’s seat and immediately eliminates many of these steps.

Traditional Supply Chain Model:

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Traditional Supply Chain Model

 

3D Manufacturing Model:  It’s a little oversimplified, but I think you get the point.

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Essence of 3D printing and why it’s so revolutionary to the supply chain industry

3D printing technology is laden with benefits that we weren’t able to put into practice 5 years ago because the speed and flexibility was not there.

There is still a gap between economies of scale and 3D printing capabilities, but it is closing as shown in the chart below.

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Production volumes versus costs: Traditional manufacturing versus 3D printing

Benefits of 3D printing technology to manufacturing industry:

  1. Low infrastructure requirements
  2. More mobility
  3. More programmable
  4. Adaptive – able to handle “on the fly” changes
  5. Easier to upgrade
  6. Waste is almost completely eliminated
  7. Prototyping is much less costly

Below is a table illustrating the cost savings in time and $ for a particular motorcycle brake lever part from Markforged.

Break lever part

An inherent benefit of 3D printing also comes in the form of creating more sophisticated designs while using less material in the process.

Getting beyond the strictures of traditional parts manufacturing can mean the difference in winning a formula 1 race or the overall cost to fly on Southwest.

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Impact on Real Estate

Parts that can be quickly created with the 3D printer will no longer be stored in a warehouse which will shrink the overall footprint required to manage inventory.  I expect this will have a profound effect on the automotive, aircraft, healthcare and building materials market within the next 5 years.

Warehousing and logistics providers will begin building networks of 3D printers for manufacturers and shippers in order to reduce occupancy costs and achieve a competitive advantage over other logistics providers.

Companies like Fastenal that provide small parts, fasteners and disposable products to support production for manufactures and their employees, will need to change their model.

They may even begin housing a 3D printer in some of their larger client facilities (i.e. Harley Davidson vending machines – See picture below).

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Thanks for reading!


Resources:

  1. http://www.industryweek.com/supply-chain/3d-printing-customers-taking-charge-supply-chain
  2. http://www.industryweek.com/supply-chain/how-3-d-printing-could-disrupt-your-supply-chain
  3. http://www.dhl.com/content/dam/downloads/g0/about_us/logistics_insights/dhl_trendreport_3dprinting.pdf
  4. http://ctl.mit.edu/sites/ctl.mit.edu/files/library/public/2014ExecSummary-BhasinBodla.pdf
  5. https://www.theguardian.com/sustainable-business/2014/nov/25/how-3d-printing-is-set-to-shake-up-manufacturing-supply-chains
  6. http://realtormag.realtor.org/technology/feature/article/2017/01/promise-3-d-printed-property
  7. https://www.realcomm.com/advisory/advisory.asp?AdvisoryID=598
  8. https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/insights-and-issues/ca-en-insights-issues-disruptive-manufacturing.pdf
  9. https://www.economist.com/news/briefing/21724369-additive-manufacturing-abandons-economies-scale-3d-printing-transforms-economics

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