The way we do things in many industries is changing now perhaps more rapidly than ever before. Modern technologies are growing and evolving at exponential rates, carving new paths for start‑ups and disrupting blue chips. Technologies such as robotics, automation, drones, artificial intelligence, and 3D printing continue to reshape both company operations and customer expectations. Now more than ever, organizations must innovate within their supply chains to remain competitive in a changing marketplace. This article outlines where 3D printing is in 2016, and how and why it should be implemented into the modern supply chain in order to develop and sustain competitive advantage.
Where is 3D printing today?
We are at the cusp of a 3D printing revolution. Revenue in the 3D-printing marketplace has averaged 26.2% annual growth over the past 27 years, bringing the total market size to $5.2 billion in 2015, according to the Wohler’s Report 2016. Recent industrial, commercial, and consumer interest has surged, and the capabilities of the technology have grown to a point where 3D printing can be implemented within supply chains in a valuable way.
3D printing is a process by which a three-dimensional component is 'printed' from its raw materials, layer-by-layer. The technology has evolved significantly in recent years enabling printing of various alloys, metals and plastics using a variety of processes—including multi-material printing. Consumer-grade Fused Deposition Modelling printers offer a low-cost at-home plastics printing option. Enterprise systems can create stronger and more precise models utilising photopolymers and industrial systems are capable of printing metals using a near-melting process, offering the ability to fabricate high-strength components and expand beyond prototyping to true manufacturing.
The promise of 3D printers copying-and-printing physical objects is not as farfetched as it might seem; 3D scanning has been integrated with 3D printing to effectively “copy-and-print” objects as required (see Officeworks’s Mini Me service). Being able to copy-and-print parts without the need for CAD expertise creates tremendous value, particularly in supply chains with low-volume sporadic demand profiles. The ability to print key components as and when they are required provides a viable alternative to conventional procurement of items, which may no longer be produced, or require extensive cost and time to acquire. Stratasys's Connex3 printer offers commercial multi-material printing with up to three different plastic materials. MIT’s $7,000 MultiFab 3D printer and scanner highlights the future trend of multi-material 3D printing, capable of printing with up to 10 materials simultaneously and producing a wide array of products including LED lenses, plastic handled blades and phone cases which print around phones.
3D printed products are now a viable alternative to many traditionally manufactured parts, as the strength and precision capabilities of 3D printers has vastly improved. These advances generated commercial and government interest in the technology. The U.S. military has reported widespread use of 3D printing across a number of applications, with operational components in-use today. GE has also invested heavily in the technology, leading to the first 3D-printed aircraft components being certified by the U.S. Federal Aviation Authority (FAA) in 2015. The technology is proliferating within a variety of industries including automotive, consumer goods, dental and electronics by the likes of BMW, Google and HP.
Why 3D print in the supply chain?
3D printing offers three overarching benefits to supply chains:
- Efficiency encompasses the costs saved when 3D printing is deployed, including decreased supply costs and inventory holding requirements. With 3D printing, multiple parts can be printed from the same raw material, thus allowing for reduced inventory safety stocks by aggregation of demand, otherwise known as 'risk pooling'. This in turn allows for reduced storage area requirements, and procurement costs by consolidating supply chain requirements.
- Speed covers shortened lead-times achieved by printing when required, eliminating setup and manufacturing time, and shortening the overall supply chain as manufacturing is brought closer to the end user. This reduces supply risk and leads to enhanced certainty.
- Certainty describes the reduced risk of out-of-stocks achieved by being able to print “here-and-now”, the ability to print discontinued parts, and through the safety provided by a shortened supply chain. Shortened supply chains are beneficial for all organisations, in particular those such as the Defence industry, where certainty of supply is paramount to meet urgent demand and stringent service level requirements.
The benefits of 3D printing in supply chain
Costs to consider
Determining how to implement 3D printing within a supply chain requires a detailed cost-benefit analysis, weighing the benefits against the four lifecycle costs: ranging, process development, initial outlay, and operation cost.
- Ranging cost is the cost of determining the range of parts and products you are physically able to print with current technology and the cost associated with aggregation of any data and designs needed to print that range to the required quality standards.
- Process development cost is the organisational investment required to develop internal standards, processes and policies for 3D printing. How will we determine if quality standards are met? What IT systems are required? Who will manage the initiative?
- Initial outlay is the lump sum expense of purchasing new machinery, facilities, and full-time personnel to run the 3D printing capability.
- Operation costs are the ongoing costs associated with maintaining 3D printing and includes power, repairs, upgrades, and ongoing labour costs.
The costs of 3D printing in supply chain
How to implement 3D printing into your supply chain
Once the range of printable parts has been established, a key decision point for implementing 3D printing into your supply chain is deciding where and how the technology will be used. To do this you must decide whether to:
- Make-to-stock, or
Making-to-stock, the process of effectively using a 3D printer as a supplier by printing components and products to stock shelves and increase inventory, is typically best suited 'higher-up' the supply chain nearer the conventional supplier. Making-to-stock is primarily associated with the efficiency benefits.
Making-to-order, the process of printing components and products as and when required, is typically best suited 'lower-down' the supply chain, nearer the end user or customer. Making-to-order is primarily associated with speed and certainty benefits.
How & where to implement 3D printing
Though there are nuances to this rule, this segregation of implementation options and the associated benefits is a good starting point for determining how and where to apply 3D printing.
The make-to-stock and make-to-order decision should be used hand-in-hand with the detailed cost-benefit assessment to determine where your best return on investment lies. It may be that you decide to implement both make-to-stock and make-to-order capabilities within your supply chain, or instead focus your efforts on perfecting make-to-stock in a centralised location, cultivating internal skill development. This will all depend on your industry, customer value proposition and demand profile.
One thing is certain, given the great potential benefits offered by 3D printing, any forward-looking supply chain strategy should consider its implications as a chance to innovate and lead within the marketplace.
Michael Dentry co-wrote this article. Michael Dentry is a consultant with GRA based in Melbourne. Michael has worked with a diverse range of clients, across industries including FMCG, retail, manufacturing, and defense. Dentry has developed experience within innovation engagements dealing with the adaptation of new technologies within the supply chain. Prior to joining GRA in 2015, Dentry operated within the space of high-tech engineering. Dentry has specialised experience in the manufacture of microscale technology and 3D printing.