3D Printing is certainly not is science fiction.  It will over time completely disrupt current distribution channels and logistics.  This is a short brief for BIIA members of the type of disruptions which can be expected in the logistics industry.

3D Printing ability to create strong but light parts has been identified by the aerospace sector; components for the automotive sector are already being printed and the technology is being adopted by the mobile telecoms sector.

It has been estimated that in 2012 up to 30% of finished products already involve some kind of 3D printing.  By 2016, this is expected to rise to 50% and by 2020 potentially up to 80%.

At the moment the following areas are in line for transformation:

Now

  • Production Prototypes
  • Small manufacturing runs of High Value/High Complexity products
  • Dental/Aural healthcare forms/aids

Soon

  • Almost all service parts
  • Complex high volume/high value forms
  • Products related to fashion/trends that have a high volume/short lifespan profile

Later

  • Mass produced fast moving consumer goods

It is difficult to see how industry will undergo complete transformation for many years – probably decades – to come.  What could happen, though, is that that some sectors are penetrated by the technology at a much earlier stage, such as the manufacture of spare parts. In this case, the most enlightened logistics companies could even become early adopters of the technologies – investing in the 3D Printers and providing facilities for engineers – rather than kicking against the progress. This would also provide a way of leveraging their capital and their own technological capabilities.

What Are The Implications For The Logistics Industry?

The implications of this new manufacturing technology for the logistics industry could be massive:

  • Potentially a proportion of goods which were previously produced in China or other Asia markets could be ‘near-sourced’ to North America and Europe. This would reduce shipping and air cargo volumes.
  • The ‘mass customisation’ of products would mean that inventory levels fall, as goods are made to order. This would have the effect of reducing warehousing requirements.
  • There would be fewer opportunities for logistics suppliers to be involved in companies’ upstream supply chains, as manufacturing processes are increasingly re-bundled within a single facility. Tiers of component suppliers are done away with, as is the need for supplier villages, line side supply etc.
  • Downstream logistics would also be affected. Build-to-order production strategies could fundamentally impact the manufacturer-wholesaler-retailer relationship. In the future the shopping experience could also be vastly different. In some sectors, retailers will either cease to exist or become ‘shop windows’ for manufacturers, keeping no stock of their own. Orders are fulfilled directly by the manufacturer, and delivered to the home of the consumer.
  • A major new sector of the logistics industry would emerge dealing with the storage and movement of the raw materials which ‘feed’ the 3D Printers. As 3D Printers become more affordable to the general public, the home delivery market of these materials would increase.

The Service Parts Logistics sector would be one of the first to be affected.  At present billions are spent on holding stock to supply products as diverse as cars to x-ray machines.  In some cases huge amount of redundancy is built into supply chains to enable parts to be dispatched in a very short timescale to get machines up and running again as fast as possible. It doesn’t take much imagination to understand the benefits for a service parts engineer of being able to download a part design from an online library, 3D Print it and then fit it within a very short time window. This would make global and national parts warehouses as well as forward stock locations unnecessary to fulfilling customer needs.

The Logistics Company of the Future

The changing supply chain dynamics will lead to the evolution of a new type of logistics company resembling a ‘4PL’, or service management company, as much as anything else. Their businesses will comprise a mix of software development, delivery services, partner relationship management, contract management and brainpower.

The new logistics company will design solutions comprising demand planning, manufacturing, delivery, market monitoring, service parts management and return and recycling services. In essence, they will become Product Life-Cycle Management service providers.

This is a big opportunity for the major industry players that have the resources to establish these new organisations.

The Service Parts Logistics industry will be either transformed or decimated by 3D manufacturing – or perhaps both! With small 3D Printing machines available, operations in remote locations – or even in an engineer’s van – will only need electronic libraries of designs available to them on a local computer. They can then call up the design of the spare part required and immediately print it. Obsolete parts could simply be scanned in 3D, fixed in the computer’s memory and the new part printed. The implications for inventory are clear.

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Source: SupplyChain 247