Spend Matters welcomes this post by Steven P. Roth from GEP.
The long heralded commercial arrival of 3D printing (3DP) is upon us, and a number of industry surveys indicate the impact of this emerging technology is anticipated to grow significantly over the next 10 years. For those unfamiliar with the technology, 3DP, or additive manufacturing, is a process by which a 3-dimensional object can be constructed from a computer model through successive layering of various materials with the use of a specialized computer-controlled machine.
In media related to 3DP, considerable coverage has been given to the technical capabilities and long-term potential of the technology, but little consideration has been given to how it will change the day-to-day work of supply chain, operations and procurement professionals in the immediate future. To remedy this deficiency, this article identifies and discusses 3 ways 3DP will revolutionize the modern supply chain and one very important way that it won’t.
1. Supply Chain Disintermediation
Traditionally, supply chain is segmented into a number of intermediate steps where specialized firms play a specific role in manufacturing, transporting, combining or distributing products. 3DP threatens to rapidly disintermediate these traditional supply chains for select products. As the cost of 3DP continues to decrease, the prospect of transporting certain small, specialized and/or unique goods across vast distances and working through disparate distribution networks will become less financially attractive. Instead of shipping products overseas with months of lead time, savvy suppliers will send electronic blueprints to local 3D printers or even to the end user where products can be printed in a matter of hours.
2. Value of Geographically Fixed Distribution Networks Will Decrease
As a consequence of the new parameters for global product delivery, the value of established geographical distribution networks for products that can be readily 3D-printed will decrease significantly. This rule will apply to everything from specialized machine parts to home goods. 3DP manufacturing technology will allow design to become increasingly virtual and remote and production to become increasingly local. These shifts are already visible in the emergence of online 3DP marketplaces for consumer goods, like 3DLT.com and large manufacturers, like GE, that have begun to incorporate 3DP into their production strategy. Information networks, rather than geographic networks, will be the channels through which firms in a 3DP economy deliver value to their customers.
3. Vertical Supply Chain Collaboration Will be Key
3DP enables much faster prototyping, shorter lead times and creates an environment where direct communication of standard design files is much easier. These developments remove many of the traditional barriers to high-performance vertical supply chain collaboration and continuous improvement. With this new potential for greater partnership between companies and their suppliers, forward-thinking firms can develop competitive advantage through increased supply chain performance and speed-to-market by integrating 3DP as part of their supply chain strategy.
3DP Will Not Completely Replace Traditional Mass-Production
Given the excitement surrounding the more recent evolutions of 3DP technology, one might surmise that 3DP was poised to overtake traditional mass-production any day now. This, however, will not likely be the case. 3DP has high potential value for rapid prototyping and manufacturing of customized, unique and complex products and parts. For many high volume, standardized and cheap items though, mass-production will likely remain the manufacturing technique of choice for the foreseeable future.
Supply chain, operations and procurement professionals will need to incorporate 3DP into their strategic plans in order to stay competitive in the evolving global marketplace. While mass production will remain the manufacturing method of choice for high-volume, standardized and cheap products, 3DP will increasingly become a more attractive option for a wide range of items and categories. The emergence of 3DP as the preferred method of manufacturing such items will pose new challenges and present new opportunities that will require supply chain, procurement and operations functions to work collaboratively and drive value for their customers and the business.
For more interesting thinking on procurement, visit the GEP Knowledge Portal.