India Insights

3D Printing influence on supply chain and logistics

Manufacturing when there is a demand- A method to solve logistic related costs

The word 3D printing is a 3 decade year old word. At the infant stage, 3D printing was stereotyped as an advanced manufacturing method and not seen as a potential replacement to the existing methods of manufacturing. It was used to print objects in the so called “souvenir” category. Initially, the heads of business enterprises were sceptical about it, that it would never advance to be an integral part of manufacturing. Just like the evolution of an ape to a man, 3D printing has evolved from souvenir to consumer to prototyping to large volume manufacturing. The idea of 3D printing has grown in such a way that NASA has plans to have 3D printed human habitats on mars. To name a few of the advancements, the digital model of a food recipe can be made into a physical form ,3D printed organs used in replacement and Divergent 3D’s fully 3D printed cars justifies the evolution of the technology as a whole. We are now seeing that 3D printing has reached an inflection point as lower costs and technological advances have put it within reach of more people. That’s the most common use because it allows for a more agile design process and rapid product iterations. Some of the more progressive users are exploring larger-scale parts production for existing products. 3D printing as an Industry 4.0 technology throws up compelling business opportunities, an entry into unexplored territories.

Additive manufacturing is often seen as a prototyping method. Well, if someone still believes that he is not thinking the right way. FDM printing has evolved a long way. Composite filaments have come up which can replace metal parts. A company named Virtual Foundry has developed filaments with more than 80% metal composition and can be printed using a FDM based printer. Companies like AREVO labs and Sandvik have developed high performance plastics that are rich in mechanical properties.

What and where are the issues?

Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics is the management of the flow of things between the point of origin and the point of consumption in order to meet requirements of customers or corporations. Logistic is a support activity to manufacturing. A small issue in logistic network can lead to heavy revenue losses.

Inventory and warehouse management is as volatile as petrol prices. Huge losses are incurred as a result of keeping finished products in stock. To add to the problems is the fluctuating market dynamics. The finished products remain on shelf and move to the category of expired creating losses. There are companies that have to maintain continuous operations (because of technical reasons, where stopping production would mean incurring high operational costs) and to do that, these companies have to stock a number of spare parts in their warehouses/factories. In situations when these spares sit unused, lead to wastage of invested capital.

No company strict to country. In order to expand its business, it migrates across borders to have a larger customer audience. It is very costly to have a large network where a component is manufactured at a place far away from where it has to be delivered. The place of manufacture may also not live up to the quality of manufacturing process. A 3D printer when employed translates the digital model into the physical one; one just has to set the same process parameters. The process is independent of efficiency of human lab. Apart from this, the logistic and warehouse costs can be kept at a minimal.

How to overcome

Additive manufacturing as a technology promises solutions to these problems. Additive manufacturing open up the business model – Make on demand. The demand of a customer is often dynamic; it can vary in quantity and can vary according to certain trends. In a traditional industry demand planning is done and sometimes inventory pile up resulting in large warehouse costs.  When the demand of a product is under the category “impossible to predict” the go to business model is make on demand. But again in a conventional manufacturing process, this is time consuming, a customer lost will never return. With a 3D printer the demand is fulfilled within a short interval of time.

In part having subassembly the demand of a part has to meet. The unavailability creates bottlenecks.

Apart from these evident scenarios, there are some issues that often turn up suddenly:

  1. A part can get damaged suddenly resulting in a halt in production operations
  2. In short production runs material wastage can happen which is zero in AM
  3. Every OEM depends on many suppliers for assembly of their product.

These issues in a traditional supply chain, make additive manufacturing a good contender for establishing processes that reduce interdependencies among participants and promote smooth production in factories. Industrial manufacturing has certain processes that require changing parts which each process cycle. Additive manufacturing can provide lightweight and cheap replacement parts for such processes. Also, these parts can be developed as per demands.

There exists a stereotyped belief that parts manufactured by 3D printing require post processing. But now printers have notched up their resolution in such a way that all the printing process be put in the category of “near net shaping”. Some of the trends that have to be taken into considerations are:

Southeast Asian countries have become the fortress of manufacturing where end products are made at a lower price. This is the reason why many companies across the world have outsourced their manufacturing operations to Southeast Asian countries. Even a mobile case used by many is customized. A shift towards mass customization would mean that the warehouses will be locked up and production will be happening according to “made to order”.   The future will see a digital warehouse or online market place of models that upon order is floated to a printer and delivered to the customer. One of the industries will be services industry. The physical warehouse will see a transition into global digital one.

While it is true that, 3D Printing has come a long way, there is miles to go before which it cannot be realized as a logistics solution. At the same time, the fact that industry players like Airbus are using additive manufacturing, underlines the potential of the technology. It is important to select the right technology at the right time.