3D Printing to disrupt the future of supply chain
Logistics giant DHL recently released its report on '3D Printing and the Future of Supply Chains'. The trend report offers perspectives on the state of 3D printing and implications for logistics.
The much discussed trend ‘3D Printing’ has already made lives easier due to its immense potential to create instant production and distribution models, essentially enabling companies and consumers alike to print complex objects within the confines of a single printer.
The consultancy firm McKinsey estimates that the 3D printing market will grow to between $180 billion and $490 billion by 2025. Similarly, Gartner, the well-known information technology advisory company, believes that enterprise 3D printing is ready to break out and achieve widespread adoption.
Some of the major moves already announced by companies in 2016 alone include the Mercedes-Benz Truck’s first 3D-printed spare parts service, the launch of HP’s 3D printing initiative, and a multimillion dollar investment by GE, BMW, and Nikon into the 3D printing start-up, Carbon1, to name just a few.
A study by Airbus showed that by redesigning its brackets for 3D printing, the company could achieve a 40 percent reduction in CO2 emissions over the lifecycle of the bracket and reduce the weight of the airplanes by 10 kilogrammes. 3D printing also enabled a 25 percent reduction in material waste compared to traditional casting methods (see figure 1).
3D printing helps global manufacturing and consequently, logistics volumes will be disrupted. The online space reveals that the spare parts sector as one of the first areas to be disrupted by the proliferation of 3D printing.
The spare parts manufacturers will no longer have to store the spare parts physically in a warehouse for a long time. Rather, they can create the spare parts on demand. Another way out is they can collaborate with the logistics operators in creating a dense network of 3D printers to instantly print and deliver spare parts on demand.
Many companies are already embracing the concept of printing spare parts; a good example of this is the most recent news from Mercedes-Benz Trucks. In an effort to resolve backlogs in spare parts delivery, the trucking company announced it will now allow customers to 3D print more than 30 different spare parts for cargo trucks. Customers no longer have to face a lengthy wait for original factory spare parts to be delivered. Instead they can have the part printed at the nearest facility and delivered in less time.
The virtual print files of spare parts would be securely stored in software databases that essentially act as a “virtual warehouse”. One organisation that has already developed and implemented this type of virtual warehouse concept is Kazzata. The company aims to provide an online marketplace for spare parts, effectively establishing a CAD repository for obsolete and rare parts. When a part is required, users can simply search for the right part and send the file to the nearest 3D printer.
When customers require high level of customization, companies can work with logistics providers to create a network of 3D printers, each of which acts in essence as a small micro factory. These printers can be located in regional warehouses or local distribution centers and can be branded with an OEM’s label.
To increase customisation options but at the same time reduce lead times to the customer, companies can partner with logistics providers that offer postponement services using 3D printing. By delaying final assembly to the final point of demand, companies can give their customers access to a wide variety of customisation options so that they can select aspects of the design, material, shape and size, packaging, and product functionalities. Local distribution centres can hold stock of almost–finished goods as well as 3D printers that execute a variety of customisation functions before the product is delivered to the customer.
Another future vision is the idea of manufacturing individualised parts not in a stationary location such as a warehouse but in a moving vehicle. This can additionally reduce delivery lead times. Amazon, for example, has filed a patent for a truck fitted with 3D printers, with the intention of manufacturing products on the way to a customer destination. At scale, this could enable companies to produce parts very close to demand and thereby drastically reduce the lead time of individualised parts delivery to customers.
Another idea is ‘end-of-runway-services’. This concept is already being used by UPS with its investment is Fast Radius. It encompasses integrated logistics solutions located at specific warehouses in direct proximity to air hubs. Fast Radius has strategically located its 3D printing factory just minutes from the UPS global air hub. The value of this end-of-runway location is that orders can be manufactured up to the 1 a.m. pick-up time and be delivered anywhere in the US the next morning.
The limited scale of adoption is surprising considering the fact that 3D printing has been around since the 1980s. According to Ernst & Young’s Global 3D Printing Report 2016, 11 percent of companies in its survey are testing and experimenting with 3D printing, while just 3 percent claim significant experience of 3D printing and have a clear strategic plan at the highest management level for its future application.
Some reasons why adoption has been slow include lack of technological maturity for most industrial-grade applications, high costs for printers and materials, and limited knowledge about 3D printing technology.
The report concludes that in logistics, 3D printing will play a much more prominent role in the areas of spare parts logistics and individualised parts manufacturing. As manufacturers adapt their production processes and supply chains, this will open new opportunities and will also challenge logistics providers to find new customer-centric solutions. Some product ranges may be produced entirely on demand through 3D printing, and new regional and last-mile logistics solutions will be required.