October 9, 2017
The future has arrived: 3-D printing is now a proven manufacturing and supply chain technology, from product design right through to the end customer. From engineering and space-station resupply to automotive parts and healthcare prosthetics, there is universal acceptance that 3-D printing has created the opportunity to “do things differently.”
3-D printing is changing the rules of the game and making the consumer the supply chain decision-maker—and most companies are not ready. The old model often has the manufacturer in charge: developing new products, sourcing, manufacturing and assembling, then distributing products to end consumers. The product emerges only after all the work is done. Consumers can only choose what to buy after all the manufacturing and delivery work is done. This results in risk for manufacturers, who must forecast how many items need to be made and what will sell, leading to waste and lower profitability.
Consumers in control: Mobile technology and 3-D printing go together like peanut butter and jelly. Consumers now use their mobile phones to customize goods, and they expect fast delivery—the same day in the case of Amazon Prime—from e-commerce providers. 3-D printing bypasses many of the costly physical logistics and inventory steps with localized, on-demand printing. There are already online ordering platforms that are popular with consumers, and 3-D printing will give retailers such as Amazon even more brand power at reduced cost.
Parts on demand: Spare parts is one of the first areas to be disrupted by 3-D printing, particularly in reducing the need to store parts in a warehouse. Parts will be printed on demand, close to the delivery point and with greatly reduced production, storage and distribution costs.
Logistics providers can create a network of 3-D printer services to print and deliver spare parts on demand. Imagine a virtual warehouse, where every part can be ordered online and created at the nearest 3-D printing facility. Products as diverse as cars and X-ray machines break down and need spare parts, which can be created and dispatched quickly to get critical equipment up and running again as fast as possible.
Individualized parts manufacturing: 3-D printing is already used in the healthcare industry with remarkable results. Whether it’s a small clinic or a huge hospital, it makes no difference for this technology. Facilities of all sizes can collaborate with medical companies and logistics providers to make an efficient end-to-end supply chain for individualized parts with 3-D printing. Applications include prosthetics, cosmetic surgery, dental implants, knee replacements and hearing aids. Significant savings can be achieved in this area.
End-of-runway services: End-of-runway services are based on integrated logistics services located around warehouses close to important airport hubs. Fast response times and speed to market are main priorities, especially for time-sensitive shipments of critical parts. More than just warehouse operations, end-of-runway services offer sector-specific integrated return and repair services. Here is where 3-D printing will be a great disruptor.
UPS has started to explore this path with Fast Radius, which has strategically located its 3-D printing factory just minutes from the UPS global air hub in Atlanta. Orders can be manufactured up to the 1 a.m. pickup time and be delivered anywhere in the United States the next morning. UPS is planning another factory in Singapore to extend this service.
Logistics industry to take some hits: The impact of 3-D printing on suppliers will be significant, particularly in their upstream supply chains. Manufacturing processes will be centralized within a single facility. Tiers of component suppliers will shrink. Some of the goods now made in Asia could be relocated to home countries in North America and Europe.
Inventory levels and warehouse needs will shrink as goods are made to fit the personalized needs of the client. There will be a move away from international freight to last-mile delivery. Printer facilities will need reliable supply chains to support the storage and movement of the raw materials that feed the printers, along with improved local delivery capabilities.
Downstream logistics will also be affected. Build-to-order strategies could disrupt the manufacturer-wholesaler-retailer magic trio. The shopping experience will be different. Certain types of retailers will either cease to exist or will simply become display spaces for manufacturers—no stock needed.
What’s next for logistics companies? New dynamics in the supply chain will require customer-centered solutions and technology to support new delivery models. A lot of companies are already investing in 4PL (fourth-party logistics) services, which run complete supply chain solutions beyond the scope of 3PL. With the rise of 3-D printing and other technologies, we will see more companies taking on roles as consultants or supply chain solution developers. Their businesses will deliver complex services based on software development, contract management delivery and partner relationship management.
The new wave of logistics companies must design solutions comprising demand planning, manufacturing, delivery, service, parts management and recycling. The future is based on delivering the best product-life solution for clients.
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