How to Position 3D-Printing in Supply Chain

3D-Printing refers to the technology where we use raw materials such as plastic and metal, put them together layer by layer to “print” 3D objects. 3D-Printing is still in its infancy as it is mostly used by engineers to create prototypes. However, as this technology is becoming more and more affordable. People already started to predict its implications on global supply chain, if one day 3D-Printing is cost-effective enough to be applied into mass production.

Most of articles tend to claim 3D-Printing may put global supply chains out of business[1]. This opinion comes for reason. The cases of IKEA and Tata indicated how cost could be reduced by redesign the supply chain. IKEA and Tata both focus on its product design while outsourcing its assembling work to local manufacturers and even customers, which is so-called institutional innovation[2]. 3D-Printing takes “innovation” to extreme. It doesn’t require assembling work since the final product is printed out. It even skips the manufacturer and transporter in the supply chain, leaving designer and customer alone. A typical business process supported by 3D-Printing would be like:

However, I personally think 3D-Printing would be a complement but not an alternative to supply chain, considering its current situation and predictable future improvement.

The biggest obstacle impeding 3D-Printing to replace traditional manufacturing arises from the nature of materials. The functionality and quality of any product require usage of various materials. 3D-Printing has to deal with the physical properties of different raw materials. Possible problems may appear in how to convert raw materials into adaptable powder form and how to ensure the adhesiveness of adjacent layers. 3D-Printing might be a good choice for producing widgets using one specific material, but surely not for complex final products.

Besides the limitation of technology, business is another concern. Mass production is the key to reduce cost according to the economic of scale. It is true that 3D-Printing will eliminate most of transportation expenses. However, on the current stage, it cannot compensate the cost of a 3D-Printer, despite the fact the speed of printing is now far behind the benchmark of mature manufacturer.

In my opinion, 3D-Printing will have two ways out just as "2D-Printing". Firstly, it will largely reduce the cost of producing customized objects. It will meet the needs of a small portion of people like engineers and designers. Secondly, it will become popular in communities such as neighborhood, offices and universities. It is due to the high cost and random usage just as normal printers. As the current situation of normal printers, it is still an optional device for personal use but largely equipped in communities. 

However, technology is always beyond our expectation. 3D-Printing itself is an unanticipated one. As the technology becomes mature, we will see how it will affect the global supply chain. The global supply chain is established not in one day. It is now the vein of business operation. It takes new blood a long time to become an inseparable part of it.

Sources:

[1]3D Printing: The end of globalized supply chain?

http://www.supplychaindigital.com/global_logistics/3d-printing-the-end-of-the-globalised-supply-chain

[2]How Ikea Designs Its Sexy Price Tags

http://karlulrich.pbworks.com/f/IKEA-cost-article.pdf

Learning from Tata's Nano

http://www.businessweek.com/stories/2008-02-27/learning-from-tatas-nanobusinessweek-business-news-stock-market-and-financial-advice