3D Printers

How will 3D printing affect the supply chain?

We know that 3D printing will disrupt manufacturing and the international supply chain, but nobody seems to know how yet. Now a paper from the Business School at Lingman Normal University in Zhanjiang has tried to separate the wood from the trees.

The general consensus is that 3D printing is going to have a profound effect. The concept of mass producing goods half way around the world and then shipping them is inherently inefficient. UPS clearly agrees, as it is investing heavily in 3D printing centers throughout the US that can produce goods on demand for local delivery.

So even the big players are panicking, but what will actually happen? There are theories that much of the labor market could actually be wiped out and logistics will become a casualty of the digital era. This doesn’t take into account our natural capacity to adapt, though, and the fact that we have been here before.

This isn’t the first rodeo

When Asia effectively took over mass production, Europe and the US concentrated on complex products. These goods were often assembled with parts taken from the factories that sprang up in China. Those that didn’t adapt, simply died. The ones that did were often more successful than ever.

Now we face a new industrial revolution that brings its own unique problems. We know that there will be upheaval, but still nobody quite knows how this will pan out.

We really don’t know if 3D printing will take over mass manufacturing, or if the benefits of the old system will keep it in the game for a long time to come.

Does 3D printing have a limit?

Printing speed, cost and the quality of the finished product are all improving at a rate that suggests this is the future. But we may yet find a cut-off point where it is simply not cost-effective to use the printers for a certain product.

Well the Chinese researchers have attempted to analyse the situation using system dynamics to offer a rational answer.

It posed a number of possibilities and came to the inevitable conclusion: 3D printing is set to change the manufacturing world and the supply chain.

Final manufacturing sites are set to be much closer to the customer, one way or another, and that means that a large amount of the transport and logistics will simply disappear.

Delivery companies might want to consider following in UPS's footsteps

UPS might have the right plan

The paper supports the UPS model and suggests that transport companies will have to become 3D printers or find a way to work hand in hand with big suppliers. The supply chain will have to become fluid and companies may have a variety of partners around the world that produce certain goods.

The emphasis will be on shortening the supply chain for each and every product, so there may be vast 3D printing factories for certain products that require complex source elements. For others, smaller factories could do the job just as well. So every major company could have an ecosystem of manufacturing facilities around the world.

A flexible supply chain

The way a product is produced will depend upon the location of the customer and the complexity of the task at hand. So the supply chain will not be rigid, it will be a fluid and ever changing organism depending on the specific variables that swiftly account for labor, transport and production costs at each separate facility.

Of course any number of factors could change the playing field in the years ahead, but this seems to create an opportunity for production houses to set up in major cities. It also seems to suggest that even the biggest companies could have a number of different suppliers around the country and that production will shift to an on-demand basis.

The Chinese study also seems to suggest that UPS has bet the farm on the right horse.