3D Printing Changes the Supply Chain

November 23, 2015

Written by Joe Cannata. This post first appeared on the Kinaxis industry blog, The 21st Century Supply Chain


I recently took a trip to my local big box electronics store, and saw a 3D printer on display. I asked what they were printing, and the response was “plastic components”, which were being sold in the store. The salesperson was busy, so I did not have the chance to find out exactly what those plastic components were, but I thought, wow, they can make parts for sale right there in the store. Retail is changing for sure. I then decided to do a little more checking on 3D printers when I got home. I learned about biofabrication, a recently created word that means the convergence between technology and medicine, to print items to be used in the human body. Living cells are used as the “printer ink”. Visions of the Terminator came to mind. I also discovered, from an article the Guardian that the U. S. Food and Drug Administration has approved the first 3D printed drug, called Spritam (levetiracetam). It controls seizures coming from epilepsy. The drug manufacturer, Aprecia Pharmaceuticals, uses 3D printing to create a more porous pill. This means the pill dissolves more quickly with liquid, making it much easier for the patient to swallow higher doses.

3D printing has gone from a novelty to a serious industry, a predicted $16 billion industry by 2018 according to Canalys as stated in another article from the Guardian. Basically, it has become mobile. It has become additive manufacturing. An article in my local paper, the Atlanta Journal-Constitution, had this interesting quote, “From aerospace to health care to consumer products to toys to medical devices, furniture … what I think you’re going to see is an explosion of use.”

A startup local Atlanta-based 3D printing company, CloudDDM, is looking to make an impactTraditional manufacturing requires the creation of dies or molds that can cost thousands of dollars to create a prototype3D printing only requires a digital file with the design of an object, and the specialized “ink”. This also introduces a whole new issue to supply chain and the manufacturing process–protection of intellectual property (IP), in the form of the digital files being sent to 3D printers. Just as important as the prototype itself, is the thought and research behind the design. Printers can be a vast source of digital information based on the memory they possess. This creates a potential security issue.

Atlanta is home to many Fortune 500 companies like Coca Cola, Home Depot and UPS. UPS has already thought about how 3D printing could affect its core business, which involves moving materials in the supply chain. They installed a 3D printer at a local high-profile store, which will be able to perform on-demand services. Their rationale was, if businesses can produce parts easily on-site, instead of off-shore or elsewhere domestically, that could impact the UPS global market for shipping and logistics and cut into revenue. To get ahead of the curve, UPS invested in the aforementioned CloudDDM. The two companies have jointly opened a facility near the UPS air hub in Louisville, Kentucky, with more than 100 industrial 3D printers. They can take an order in the afternoon for a 3D printed item and ship it overnight for arrival the next day.

TNT Express, FedEx and Amazon are looking at investing in mobile 3D printing trucks, which could come to a site and start “manufacturing” on demand. This not only brings the manufacturing closer to home, it reduces the transportation costs and also shrinks the length of the supply chain. Local manufacturing, or on-demand, means creating only what is needed, as opposed to stocking materials and keeping an inventory, all of which need to be managed to optimize cost. Third party printing companies can now become value-added distributors and manufacturers. Also, if plastic or other “inks” are used that can be recycled, the waste is then reduced, and in turn lowers the cost even more. This puts a whole new stream of thought into the traditional supply chain.

Take a company like Hershey, which produces massive amounts of chocolate candy in various forms. Using “chocolate ink”, they can get into new areas of specialized chocolate, and produce it anywhere, licensing the IP for the design of the object to be printed. The part of the supply chain that handles movement of goods from the traditional manufacturing plants to the retail outlets can again be shrunk, with management complexity being greatly reduced. Manufacturers in any industry will need to make their supply chains more agile and able to operate in real-time to cope with expedited production cycles.

According to a statement on the Material Handling & Logistics News website from the Ed Morris, director of the National Additive Manufacturing Innovation Institute (NAMII), “In terms of impact on inventory and logistics you can print on demand. Meaning you don’t have to have the finished product stacked on shelves or stacked in warehouses anymore. This collapses the supply chain down to its simplest parts, adding new efficiency to the system.”

Traditional supply chain models are founded on constraints of the industry—the efficiency of mass production and the need for low-cost, high-volume assembly workers, real estate to house each stage of the process, and more. Additive manufacturing bypasses the traditional constraints. Raw materials become digital files and their associated IP.

Whether 3D printing becomes a disruptive force to the traditional supply chain is no longer a hypothesis; it is a reality. Just a thought however, 3D printers require materials to use as ink. What about the supply chains to get the raw materials that comprise the “ink”? Doesn’t that pose an altogether different supply chain scenario to manage? That thought is enough to give me a headache. I think I’ll use my new 3D printer and make some aspirin. 

What other ways can you see the rise of 3D printing impacting traditional supply chain practices? Let us know in the comments section.

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