3D printing and supply chain disruption
If you’re not excited by 3D printing, you’re not thinking big enough, say some technology visionaries who predict that life on Earth will soon change radically due to it.
According to these futurists, 3D printing is the “new industrial revolution” that will potentially make a greater impact on the world over the next 20 years than all of the innovations from the original Industrial Revolution combined.
Additive manufacturing (AM), as 3D printing is sometimes called, allows three-dimensional objects to be printed from digital data. Briefly, the process begins with a 3D model, usually created by using computer-aided design software or a scan of an existing object. Specialised software “slices” the model into cross-sectional layers, creating a computer file that is sent to the AM machine.
The machine then creates the object by forming each layer via the selective placement (or forming) of materials such as metals, plastics and ceramics. Think of it as a souped-up inkjet printer that goes back and forth, adding layers of material on top of each other until a 3D object is created.
How does additive manufacturing affect supply chains? AM enables designs rather than products to be sent anywhere instantly via the internet and printed in 3D. It eliminates physical distance in the material world in the same way the internet has eliminated distance in the information world.
With AM technology, products can be manufactured at the point of consumption, eliminating the need to maintain far-flung, low-cost “manufacturing platforms” in emerging economies and ship the goods back to developed countries. Call it the “deglobalisation” of production and distribution.
Mass customisation: AM opens the door to mass customisation and on-demand manufacturing of industrial parts. AM processes can print virtually anything that can be designed on a computer, thus eliminating the limitations posed by machine tools, stamping and moulding. Engineers and designers will no longer be limited by existing manufacturing technologies. This will lead to instant incorporation of design changes and tailoring of each item produced to meet the needs and specifications of each user.
Lead-time reduction: Instant production on a global scale through representation of physical artifacts with digital files has the potential to transform product distribution much in the same way that the MP3 format did for music.
Just-in-time inventory: As single items can be produced inexpensively without incurring moulding and tooling costs, products can be printed on demand without the need to build up inventories of new products and spare parts. Think e-books compared with paper books, which have to be printed, shipped, stored and returned (and often shredded) if unsold.
Waste reduction and sustainability: AM processes are virtually “green” with zero waste, as products are built layer by layer additively rather than by subtracting material from a larger piece of material as is common in today’s “subtractive” manufacturing.
Waste reduction comes from two sources.
First, in the manufacturing process the same amount of steel, cement, plastic and other raw materials will lead to more final products, thus conserving non-renewable resources — e.g., rare-earth metals — and enhancing global “resource productivity”.
Second, just-in-time production will sharply reduce unsold production waste and diminish the direct monetary cost of maintaining new products and spare parts.
From the above, we can easily imagine the magnitude of the effect AM will have on manufacturing, economies, societies, globalisation and the environment in the coming decades, just as the World Wide Web has had since it emerged a little over 20 years ago.
AM will alter the future landscape of global manufacturing as “offshoring” did in the 1990s, when it became shorthand for efforts to cut costs by using lower-wage workers in developing nations. But as wages and purchasing power rise in these emerging and developing economies, their relative importance as centres of global supply has gradually started diminishing.
Rather than focus on offshoring or even “reshoring” — a term that emerged recently to describe the return of manufacturing to developed markets as wages rise in emerging ones — AM has brought a new terminology called “near-shoring” to the fore. Near-shoring emphasises manufacturing in close proximity to demand and proximity to innovation. In fact, more than two-thirds of global manufacturing activity already takes place in industries that tend to locate close to demand.
Geographically, emerging markets’ share of global demand is climbing steadily, from roughly 40% in 2008 to an expected 66% by 2025. As that share rises, it is also fragmenting into many product varieties, features and quality levels, price points, service needs and marketing channels. The regional, ethnic, income and cultural diversity of different emerging markets is spurring the need to move manufacturing closer to meet local demand.
In the car industry, fragmenting customer demand has led to a rise of 30%-50% in the number of models. Ninety percent of recent capital expenditures in the automotive sector have involved product derivatives worldwide and capacity expansions in new markets.
With a transition to an AM economy, production and distribution of material products could begin to be deglobalised, with many goods manufactured closer to the customer and on demand. Such localisation might also have a disruptive impact on geopolitics in countries such as China, Japan and Germany that have built their prosperity and political power on export-led growth, especially of consumer products, and could experience a relative decline as more production is shifted to consumer countries and demand for imports falls.
However, a loss in exports by developing economies may not reduce economic prosperity in these countries, as an alternative economic surplus could be generated from AM processes by producing for their own populations with large domestic markets.
Like the internet and personal computers, AM is expected to have a gradual impact on manufacturing, the global economy and geopolitics over several decades, but we need to begin a significant dialogue now to prepare for this disruptive technology.
Kanishka Ghosh is a supply chain professional and independent writer. The Link is coordinated by Barry Elliott and Chris Catto-Smith as an interactive forum for industry professionals. We welcome all input, questions, feedback and news at: Barry.Elliott@inslo.com