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3D Printing Is Transforming Industrial Supply Chains [Infographic]
Additive manufacturing has exploded. Sales of 3D printers and related materials, services, and software soared to $1 billion in 2015 — and are predicted to surpass $30 billion by 2022 (a compound annual growth rate of 28.5 percent).
Manufacturing executives already understand how these technologies are revolutionizing their own operations. Design engineers are using additive manufacturing to develop and test prototypes, production operations are fabricating small components, and maintenance staff are creating replacement parts.
And that’s just today. As technologies evolve, new applications and new 3D materials emerge daily. Boeing, for instance, recently patented a levitating additive manufacturing process; rather than build layer-upon-layer from a platform, Boeing’s approach uses magnets or acoustic waves to float a nugget. Multiple 3D printers can then add material from every conceivable angle.
Yet for all its promise, additive manufacturing also creates risk by radically disrupting supply chains. Some manufacturers will win big by capturing new customers. But others will struggle as entire sectors move toward the future.
Check out our infographic on how these astonishing new technologies will impact your competitive position, and start planning to adjust now.
Take stock of 3D opportunities
Before you evaluate the risks of supply-chain changes, consider the ways 3D printing can improve your operations and open doors to new opportunities.
Product development — Additive manufacturing may have its greatest impact on product development. Many innovation processes require a lengthy list of development activities: design the product, design the equipment and molds to create a prototype, test the prototype, revise the prototype and mold, and repeat the process again and again.
3D printing allows engineers to develop prototypes without expensive mold-making while eliminating wait times and costs associated with multiple prototypes. It also frees up manufacturing capacity previously dedicated to building and testing prototypes.
These new capabilities are critical in R&D-intensive industries bound to large OEMs, such as auto or aerospace. In these sectors, suppliers must rapidly develop prototype parts to support new vehicle platforms or risk losing OEM relationships. 3D printing allows suppliers to rapidly create prototypes for experimental vehicles, changing specifications per OEM requests.
Finished products ― Finished products also are being produced via additive manufacturing, especially by companies selling small build-to-order or customized components. These firms can develop and test multiple prototypes, improving the success rate of product introductions.
Maintenance — Plant maintenance will benefit, too. New 3D printers can create replacement parts for machinery and equipment on the spot, provided that digital specifications are on file. This eliminates expensive “just-in-case” inventories of replacement parts, freeing up capital for other investments. Maintenance staff no longer need to worry if they have a critical part in stock.
All of this is good news — except for companies that rely on sales of traditional replacement parts. These manufacturers must reinvent their business models or fail. Fortunately, parts makers can also embrace additive manufacturing. Instead of investing in traditional equipment, they can use 3D printing assets to leverage existing customer relationships, working from digital specs to broaden the scopes of their businesses.
It’s important to note that all suppliers will likely face new rivals in the era of additive manufacturing. Logistics and distribution companies, for example, are already entering the quick-print parts and components businesses, expanding their roles from transportation to supplier in much the same way they did with pre-assembly and kitting services. They recognize that 3D printing could cut the volume of goods they move — unless they themselves are the 3D suppliers.
Supply-chain changes on the horizon
Additive manufacturing will create new supply chains and supply-chain requirements. Just as welding technologies (such as arc, resistance, and gas) gradually replaced blacksmithing, 3D printing will eventually supplant current metallurgy techniques.
Manufacturers will rapidly become less dependent on traditional production processes (e.g., grinding, stamping, milling). Similarly, production facilities and supply chains that incorporate will be redesigned to blend additive manufacturing with traditional processes. Workforce requirements will change, too; as manufacturers print components that previously required casting, grinding, and bending, workers who performed these functions must be retrained and redeployed.
Manufacturers will become more dependent on additive-manufacturing processes, as well as the 3D printers and materials used in them. Executives will either turn to suppliers with 3D-printing expertise or develop internal talent to leverage these new processes.
Additive manufacturing also creates new risks, since products and components can be copied by anyone with a digital file, and anything digital is also exposed to cyber-theft. Indeed, some experts believe that by 2018, 3D printing may result in the loss of $100 billion annually in intellectual property (IP) rights infringement.
Fortunately, patent and copyright laws such as the Digital Millennium Copyright Act (DMCA) protect products and the digital files used to create them, allowing companies to seek damages when IP designs are unlawfully shared or counterfeits are illegally marketed — but they require deep pockets and resources to find and eliminate copycats. Savvy companies are preventing infringement by drafting strong supplier agreements that protect IP rights and require minimum security thresholds while still allowing access to digital designs. These firms also incorporate quality and compliance specifications that clearly identify their own goods as authentic, making it difficult to print inexpensive knockoffs.
Plan for the future of additive manufacturing
Your company is already being affected by additive manufacturing. Assess operations now so you can begin taking advantage of 3D-printing opportunities in your facilities and across your supply chain.
- Sales — Is your staff running into low-cost competition from 3D products? Do customers seek additive manufacturing options? Identify markets your company could enter or expand into via 3D printing capabilities.
- R&D and design — Where can 3D printing be incorporated to reduce the time and cost of product development? Where can engineers specify 3D-printed components in designs to reduce complexity and cost?
- Asset management — How will 3D-printing technologies affect your budget for traditional equipment? Review upcoming purchases versus the likelihood that they could be made obsolete by 3D printing.
- Procurement and supplier management — Which suppliers could be replaced by 3D printing options? Options include internal 3D-printing investments, new 3D suppliers (such as distributors), or those very same suppliers switching to 3D technologies.
- Production and maintenance — How will 3D printing decrease your dependence on equipment parts inventories? Identify IP requirements associated with replacement parts and develop a strategy to reduce inventory while maintaining good relationships with equipment-makers.
How we can help
A rigorous additive manufacturing assessment will gauge the potential of 3D printing to reinvent your company and its supply chains, as well as identify hidden risks. You can then develop a plan to test 3D ideas with modest investment before committing to a full 3D future — whether alone or with help from partners.