One more product of 3D printing: supply chain disruption

Transformation & Innovation

Supply chain management / Transformation & Innovation 488 Views

History could repeat itself as 3D printing is poised to disrupt the supply chain much like email changed the way people communicate.

In the 1990s, people scoffed that email would replace sending letters through the U.S. Postal Service. Today, billions of emails travel the world every day as USPS struggles with lost revenue from first-class mail.

The degree to which supply chains could be impacted by 3D printing is only an educated guess at this point as the technology matures and companies come to understand how to make the best use of it. Industrial-grade 3D printing moves production closer to the point of use, changing relationships among suppliers, customers and service providers like transportation carriers.

A 'reasonable dent' in freight volumes

Air cargo experts estimate up to 5% of all cargo could be produced with 3D printing, Air Cargo News reported. However, consulting firm Strategy& in 2015 estimated 41% of air cargo, 37% of ocean freight and 25% of truck freight is at risk from 3D printing. Rather than shipping raw materials or components, the supply chain may shift to moving 3D printing materials and parts for final assembly or finished products for distribution.

While it may be a few years before trucking and air cargo carriers see a decline in volume due to additive manufacturing, the trend is moving in that direction.

"I don't think it'll be a significant dent in the next year or two, but in the next five years and certainly in the next 10 years I definitely expect to see a reasonable dent in the supply chain as additive manufacturing matures," Vinod Devan, product transformation lead for Deloitte Consulting LLP, told Supply Chain Dive.

Minting new business models

As 3D printing matures, change will come not only from shifting freight volumes but from new business models.

The technology can manufacture shapes that simply can't be made with traditional methods. Additive manufacturing creates objects by adding layers of material, which could be plastic, liquid metal or concrete. Traditional manufacturing and machining are based on removing material from a blank to create an object. Other manufacturing techniques like injection molding for plastics are also targeted through additive manufacturing.

Large companies such as GE, Boeing, Ford, Adidas and HP have embraced 3D printing. Today it's possible to print everything from a model of a molecule to a whole house. Instead of carrying an inventory of thousands of parts, manufacturers can store designs as digital files and print parts on demand, cutting out long lead times and long-distance shipping.

"You're disintermediating the value chain, changing who makes money," Devan said. "If you are mass customizing products or providing products on demand, you are delivering value differently, and you're charging for it differently. That, to me, will be the exponential game changer.""

"In the next 10 years I definitely expect to see a reasonable dent in the supply chain as additive manufacturing matures."

An aerospace client called on additive manufacturer Fast Radius to fabricate a tool needed for an urgent repair. Producing and shipping the tools by standard methods would have taken about 45 days, Lou Rassey, CEO of Fast Radius, told Supply Chain Dive. Fast Radius located a 3D printing factory near the UPS global hub in Louisville, Kentucky. Orders can be printed over night and delivered in the U.S. the next morning.

Fast Radius took the tool's digital file from the virtual warehouse, printed the tool and, using its supply chain partnership with UPS, delivered it to the client in 45 hours.

"Spare parts and tools are areas where we see really massive supply chain implications," Rassey said.

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