Home » Business » Additive Manufacturing and the Future of the Supply Chain

Additive Manufacturing and the Future of the Supply Chain

August 20, 2013

supplu-chain

Sweeping statements are rarely true. That’s why a headline that declared “Today’s complex global supply chains are poised to be dismantled” caught my eye. The summary of the article, which was written by Paul Brody, states, “Thanks to the growth of 3D printing, intelligent robots, and open-source hardware, tomorrow’s supply chains will be faster, smaller, cheaper, and local.” [Gigaom, 21 July 2013] There is certainly a kernel of truth in that statement, but I’m certain that not all global supply chains are going to be dismantled. The question really is: How disruptive is additive manufacturing going to be to supply chains? Noted MIT professor Yossi Sheffi, writes, “The additive manufacturing revolution is underway, and product supply chains lie directly in its path of creative destruction. Which ones, if any, will survive?” [“Does 3D Printing Doom the Supply Chain?Supply Chain @ MIT, 18 July 2013] Brody continues:

“Supply chains today are big, complex and global. Keeping them humming is an enormous challenge. But does it have to be that way? We think the world is entering the era of small, simple and local supply chains, powered by a new generation of manufacturing technologies such as 3D printing, intelligent assembly robotics and open-source hardware – also known as the Software Defined Supply Chain.”

Clearly, all of those advances are going to affect supply chains as well as manufacturing. Professor Sheffi provides a glimpse of how some of the changes could play out. He writes:

“Some supply chains will become obsolete as a result of this flexibility. For example, 3D printers in auto repair shops and retail outlets could make certain auto components on site, eliminating the need for these items to be delivered by suppliers. Many expedited shipments will not be necessary as the technology matures. When a production line goes down, for instance, the part needed to fix the problem might have to be shipped from a faraway supplier using expensive same-day delivery services. Simply printing the part in situ avoids this costly transportation option. Scenarios like these do not auger well for express delivery companies. But the news is not all bad because alternative business opportunities will open up. Delivering the raw materials that feed 3D printers is such a possibility.”

Unlike many forecasts about what the future holds, Brody claims that his predictions are going to become reality in the near-term “The 3D printing revolution is not a decade or more away,” he explains, “it’s going to start showing up in mass production within the next five years. Despite skepticism, research demonstrates 3D manufacturing improvements combined with the expiration of key patents will lead to a 79 percent reduction in average cost to print objects in five years, and a total of nearly 90 percent over the next 10 years.” Brody’s mention of patents raises the real fly in the ointment when it comes to additive manufacturing. Michael Weinberg, Senior Staff Attorney and Innovation Evangelist at Public Knowledge, explains:

“3D Printing has all the makings of a great disruptive technology. … It also raises some interesting legal issues. As we have seen from the rise of the internet, the ability to easily create and share goes hand-in-hand with the ability to copy and distribute. … Copyright is historically used to protect creatively conceived works that serve no functional purpose. That means that while many objects that come out of a 3D Printer — the sculptures and decorative baubles — will be protected by copyright, many more will not. As a result, copying those useful objects will not infringe on anyone’s copyright. … That does not mean that there is no way to protect these useful objects. Patent gives protection to many of the useful articles that are beyond the scope of copyright. … While copyright protects creative expression the moment that it is fixed, someone with a patentable idea needs to make an affirmative decision to apply for a patent. That takes both time and money, and requires a showing of novelty and usefulness. … If 3D Printing does gain wide adoption, the real secret will be to consider intellectual property concerns with an open mind and to ask a few simple questions. Is this really a new problem? Can the existing intellectual property regime cope with this problem? If not, what is the specific shortcoming? What are the wider effects of addressing that shortcoming? These questions should help us focus on what is truly new about 3D Printing, and what is just the status quo wrapped up in a fancy new technology.”

The editors at Bloomberg report, “3-D printing is already having a demonstrable effect on the economy.” [“How 3-D Printing Could Disrupt the Economy of the Future,” 14 May 2013] They point out that additive manufacturing has historically been used to produce prototypes; but, last year, “28.3 percent of the $2.2 billion global 3-D printing market was tied to the production of parts for final products rather than prototypes.” They agree with most other pundits that additive manufacturing represents a disruptive technology. They conclude, “Disruption can be dangerous and scary. It can also lead to wondrous new businesses and ways of life. Perhaps more importantly, it’s inevitable — so get in front of it while you can.” That’s really the same message that Brody and Sheffi are trying to get across. Perhaps the biggest change that additive manufacturing will introduce is mass customization. While that may sound a bit oxymoronic, what it really means is that the average consumer will have access to affordable customized products. Sheffi explains:

“Customization offers another example of how the technology will close some doors and open others in the supply chain domain. 3D printing makes it much easier to tailor products to customer needs, even down to the individual level. By tweaking the computerized blueprint and maybe altering the mix of materials, manufacturers can produce a limitless number of design variations. This newfound versatility is likely to trigger a dramatic increase in the number of product SKUs, which adds complexity and hence cost to supply chains. The proliferation of SKUs will pose a major challenge for companies. On the other hand, 3D printers are smaller and more compact than traditional manufacturing installations, and require fewer and less skilled operators. As a result, they can be located closer to consumer locations. This close proximity to markets, coupled with the short lead times made possible by 3D technology, shortens supply chains and reduces the need for large inventories. Service levels can be improved since additive manufacturing is ideally suited to just-in-time operations. These are only the possibilities that we can imagine in this early stage of the technology’s evolution.”

Ken Cottrill, a Global Communications Consultant at MIT’s Center for Transportation & Logistics, believes that hype over additive manufacturing could be creating a false dawn. “3D printing is being hailed as a breakthrough technology that will revolutionize manufacturing and supply chain management,” he writes. “This may be the case, but we should avoid repeating the mistake of relying on hype to judge its value.” [“3D Printing: Let’s Not Manufacture False Dawns,” Supply Chain @ MIT, 23 May 2013] He notes there are still a lot of questions that need to be answered about additive manufacturing. In addition to intellectual property rights concerns mentioned earlier, he indicates that questions remain about subjects such as quality, life cycles, and trust. He concludes, “Posing questions like these does not discredit a potentially paradigm-shifting technology; it helps us to take a step back and evaluate its evolutionary track dispassionately.” Professor Sheffi probably agrees with his colleague; but, he still believes that it is important to envision what could be possible. He concludes:

“Imagine global networks of additive manufacturing machines that are attuned to local markets and can be reconfigured in real time as demand patterns change. Such a network would take supply chain agility to new levels. Or distribution centers that store and supply product blueprints rather than physical products, located ‘in the cloud’ or in server farms. Of course the world can be altered further if home-based 3D printing becomes the norm. In this world, every home is equipped with a printer capable of making most of the products it needs. Supply chains that support the flow of products and parts to consumers will vanish, to be replaced by supply chains of raw material. It’s a compelling vision, but a long way off. Even assuming that consumers want to become micro manufacturing centers, the technology is many years away from such mass market applications. Meantime, 3D printing is a disruptive technology that will destroy many traditional manufacturing models. But reports that the concept of a supply chain will die at the hands of additive manufacturing are exaggerated.”

We may well be at the dawn of new age of manufacturing. Nevertheless, it is too soon to draw sweeping conclusions about how this new age will affect supply chains.

Related Posts: