The effect of 3D printing on supply chain management
We live in a time of constant change, business and technological inventions are following one other in a continuous string of development. One of these major inventions is 3D printing. This technique has already effected supply chains and its impact will definitely increase in the coming years. Therefore, this topic is of great interest for managers operating on different levels in organizations. This article aims to describe the effects of 3D printing on supply chain practices. The article starts with briefly describing the impact of 3D printing, followed by the effects of 3D printing on supply chain management.
The endless possibilities of 3D printing
It is clear that the 3D printing market is increasing in size every day. According to a report of A.T Kearney, the 3D printing market was worth $4,5 billion in 2015 and is expected to increase to a stunning $17 billion in 2020. Besides the worth of the market itself, also its scope broadens. In the past, 3D printing was mainly utilized by manufacturers. However, anno 2017 3D printing is used in several industries ranging from medical devices to uniquely designed cell phone covers. In order to illustrate this statement, some examples are presented below.
- Local Motors used 3D printers to develop a customized car;
- NASA is making spare parts with a 3D printer on one of their space stations;
- Formule 1 teams are testing its prototypes through the use of 3D printing;
- Andrey Rudenko printed a real concrete castle for his backyard;
- Defense Distributed developed the first 3D printed gun.
In short, the possibilities of 3D printing are enormous and are increasing by the day. Because of the increasing number of usable materials and the decreasing costs of 3D printers, the future for 3D printing looks bright. But how do these developments impact the supply chain and the fields of management it encompasses?
The effects on the supply chain
As is explained in the previous part, the increasing number of possibilities will significantly impact many business environments. The impact on four management disciplines is described briefly below.
Being able to produce equipment, spare parts and components at any time and any place, allows many businesses to significantly reduce their inventory. 3D printing enables a firm ‘on-demand manufacturing’ thereby partly eliminating the need for stocking of both raw materials and finished products. Subsequently, pushing materials and products down the supply chain will become inappropriate and more attention will be paid to the production of the products on the time they are really needed.
As a result of the above, the manufacturing process will change because of the functionalities of 3D printing. Carrie Manty (SDC Executive, 2017) describes the manufacturing process as: “3D printing, also called additive manufacturing, incorporates the use of a digital product design or computer-aided design (CAD) file to control the addition of layer upon layer of material to create a 3D object or part. It is the opposite of traditional manufacturing in that it adds material whether it be plastic, metal, ceramic or even chocolate instead of subtracting it”. This difference has a revolutionary impact on the assambly, for instance some assembly activities become unnecessary because the parts can be printed as one solid part. Consequently, the assembly line can be reduced and further optimized in order to facilitate a higher degree of efficiency. On top of that, set up times can be reduced because less time is needed (i.e. to clean the machinery and change colours). Such changes have a clear impact on the entire production process of a firm. The impact goes beyond the production process itself but also impacts the way the processes are managed (i.e. ISO), measured (i.e. KPI’s) and controlled(i.e. Six Sigma). Therefore, it is wise to take the possibilities of 3D printing into account if you want to reshape your production facility.
Speeding up the lead times and adopting an ‘on-demand manufacturing method’ will drastically reduce the needed space at the warehouse. The products and materials stored in the warehouse change as well, as explained in the previous section, 3D printing makes use of a different kinds of materials and these need to be stored differently. Subsequently, the same goes for waste management. Therefore, the warehouse could be redesigned in order to create a better fit with the new production process. The additional space in the warehouse enables a firm to make room for new activities (i.e. product differentiation) broadening the assortment and if necessary storing of the 3D printers.
As aforementioned 3D printing could reduce the purchasing of materials from external partners and would allow local companies to form partnerships in sourcing/maintaining 3D printers. Another possibility is to locate small facilities nearby the end users to reduce the transportation time and costs. Through localization a company could benefit from face to face contacts and develop economies of scale in a different setting. Instead of purchasing on a large scale with quantity discounts on purchasing prices and transport. Cost reductions can now be established through: local production, minimizing transportation costs and smaller warehouses and stocks.
Within supply chain management all these disciplines come together and of course much more is needed to optimize the effects of 3D printers in the supply chain. Moreover, many actions need to be taken to deal with the internal changes. For example, new partner selection is necessary and purchasing contracts have to change because different quantities and or delivering schedules. In addition to secure the business operations and maintain operational a new contingency plan has to be developed. In such a plan the focus shifts from maintaining a certain degree of stocks to guaranteed operationality of the 3D printers.
Taken together, 3D printing will have a revolutionary impact on supply chains. This is just a brief explanation of some of the changes that could occur because of future developments. While writing this article, more questions and possible business opportunities popped up in my mind. The possibilities are huge and many more will emerge as the technology develops. 3D printing is not just a buzzword, it is a technique that has proven its strengths and will definitely further amaze us in the future.