Supply Chain Management: 3D Printing: the future of SCM

Wednesday, October 9, 2013

3D Printing: the future of SCM

The topic of our last SCM class is "21st Century Supply Chains: Challenges and Opportunities for Executives". In such a context, I decided to devote my blog to the newest technology that is developing very rapidly now and that is expected to bring a revolutionary change into many aspects of human activity, especially into industrial production. This truly 21st century technology is going to affect the whole SCM field and is definitely a huge source of opportunities and challenges for any company and any executive dealing with supply chain processes. I am speaking now of the 3D Printing.

First of all, it is reasonable to set the definition of 3D Printing. According to Wikipedia's article, "Additive manufacturing or 3D printing is a process of making a three-dimensional solid object of virtually any shape from a digital model. 3D printing is achieved using an additive process, where successive layers of material are laid down in different shapes. 3D printing is also considered distinct from traditional machining techniques, which mostly rely on the removal of material by methods such as cutting or drilling (subtractive processes)." In more simple words, 3D Printing allows to create the object of any shape and "on the spot" using the 3D image of this object (software) and the special machine (3D Printer, hardware) loaded with the material needed (now it is usually liquid plastic or rubber, but in future more materials will be available). This sounds really exciting, isn't it?

If we look today at the popular croudfunding website Kickstarter.com, we can see that the number of 3D Printing projects in technology section is very large, and most of those projects are getting successfully funded by the crowd. That shows how interested people (both creators and potential users) are and promises the great future for the development of the technology. Yes, there are many concerns about 3D Printing - mostly connected with bio printing (reproduction of human body parts) - but even more hopes. So, lets now speak of what SCM people are hoping for as far as 3D printing is concerned.

First of all, the possibility to produce objects of different shape and size by using only one machine (which is less complicated in operation and also smaller than traditional manufacturing machines) and without need to alter it (only loading the software model is needed) is going to solve a lot of problems connected with factory space, workforce and whole technological process. This will allow to place factories closer to the end-user (there are even thoughts that 3D printers will be used by end users directly - for example, to make simple kitchen stuff), eliminating transportation and buffer inventories. [1,3]

Second, 3D Printing will allow fast and cheap customization of products as well as easy shaping of products to changing demand needs. This will increase the responsiveness of manufacturers and will eventually lead to higher gains for producers and lower prices for consumers. Also, the choice of different designs available to customers will increase significantly.

These two main points show that the 3D Printing technology will be definitely disruptive to the SCM processes existing now. The supply chains will become much smaller and the inventories will be considerably reduced. Here is a nice simple example of car manufacturing SCM of the future I found in HBR article: "Whereas cars today are made by just a few hundred factories around the world, they might one day be made in every metropolitan area. Parts could be made at dealerships and repair shops, and assembly plants could eliminate the need for supply chain management by making components as needed."[1]

One of the global SCM changes brought by 3D Printing will be the decentralization of global industrial production from developing countries to all-over the world. Indeed, the price of expensive workforce and huge rent needed for the 3D printing facility in developed country will be much less than the one associated with shipping goods from China. So, as the result, we will have more small factories located near end-users and much less shipping and warehouses.[3]

All in all, here is a nice infografic which illustrates how the future SCM with 3D printing will look like:

(http://www.industryweek.com/emerging-technologies/impact-3-d-printing-supply-chains-infographic)

However, this all is only the discussions of the future and no one knows how it will be for sure. For me everything described above sounds very convincing, but I wonder if it does same for you. Do you also believe that 3D Printing will significantly change the SCM? Or maybe there is something else which is even better than 3D printer?