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Supply chain, logistics and inventory go 3D with additive manufacturing

Additive manufacturing -- popularly known as 3D printing -- has been touted as the next big thing in manufacturing, but its impact will soon be seen in supply chain management.

Additive manufacturing -- the creation of product parts or components from a digital 3D model -- has gotten a lot of attention lately, and rightly so: It's one of those ideas that's simultaneously wildly innovative, and yet glaringly obvious.

Indeed, with the benefits of additive manufacturing causing a stir in manufacturing, and, therefore, in supply chain management, 2017 is looking to be a breakout year for the technology.

No longer a clever parlor trick for creating action figures and novelty items, additive manufacturing is poised to take on a serious role as a manufacturing alternative worldwide. In 2015, the additive manufacturing industry grew to $5.165 billion, representing a growth of nearly 30%, according to "Wohlers Report 2016."

As evidence, HP and Carbon3D have opted to go 3D in the development arena alongside early market leaders, such as 3D Systems and Stratasys, producing machines that are an order of magnitude faster, as well as more accurate, than what was available only 24 months ago.

Uptake of the technology was expected to more than double last year, according to research firm Gartner, with an expected 500,000 3D printers shipped worldwide, and a projected 6.7 million units shipping by 2020. And, according to global consulting firm PwC, 71.1% of U.S. manufacturers are turning to the benefits of additive manufacturing already. And though most use it for rapid prototyping, with only 6.6% using it to produce end products, that will change over the next three to five years, with most U.S. manufacturers believing that 3D applications will eventually be adopted by more than half of the sector.

3D printing boosts on-demand model in manufacturing

When just-in-time manufacturing became popularized, it had a great effect on supply chain management. The concept of producing a product to meet demand rather than in advance of it brought about a revolution in inventory control that represented a huge makeover to supply chain practices.

Recently, that idea has seen its stark expression in the publishing industry, where the use of on-demand publishing has grown, in addition to the reliance on purely digital versions.

Manufacturers may undergo a complete metamorphosis over the next decade.

It's reasonable to expect inventory management itself to undergo a similar revolution across markets as the benefits of additive manufacturing become more widely known and trusted. As the technology's quality and flexibility with various materials has increased -- it already outperforms traditional manufacturing methods with ceramics and many metals -- manufacturers have begun to function as Amazon does in publishing books on demand.

In this scenario, inventory isn't stored in a warehouse. Instead, it's a database of digital models, and components aren't created until they're ordered. This trend will transform inventory and logistics, and that transformation is already underway.

What it means to go 3D for the last mile

One of the biggest costs to manufacturers is the last mile -- the movement of products from the fulfillment center to the destination. The traditional challenge of that last mile is finding ways to circumvent long lead times and the expense of import and export fees when relying on foreign suppliers, all in service of a marketplace with rapidly shifting delivery expectations.

Additive manufacturing, according to CBRE Research, is the fulfillment solution for the last mile -- real-time demand response that is simultaneously higher quality, more flexible and less expensive than traditional manufacturing.

UPS, itself a global supply chain paragon, is going a step further. The company is implementing additive manufacturing as a service, offered to consumers with its on-demand 3D printing network services. This in itself could revolutionize order fulfillment, as the actual creation of a product, in many cases, can be undertaken by supply chain participants, and not the manufacturer.

This should be a wake-up call to even the largest, most entrenched manufacturers: There's a new player in town.

3D printing as a cottage industry

According to "Wohlers Report 2016," almost 300,000 non-enterprise grade 3D printers were sold in 2015, a number that has surely since been surpassed. That means UPS isn't the only non-manufacturer out there with the potential to make a dent in the manufacturing business.

Just as the internet leveled the marketing and sales playing field so that anyone could join in, additive manufacturing is empowering anyone with an idea with the ability to create a product entirely on their own.

This is yet another game-changing possibility for manufacturers that go 3D, but there's another: Manufacturers may undergo a complete metamorphosis over the next decade, no longer providing products at all, but, instead, selling the digital models from which proprietary products may be fabricated by anyone with the right 3D printer. This completely new concept for creating parts and products would also, necessarily, upend and bring about a revolution in the supply chain itself, drastically reassigning roles, and generating legal and regulatory revisions in the areas of patent and copyright law, quality control and consumer protections.

Siemens has predicted that additive manufacturing will be 50% cheaper and 400% faster in five years. It's a strong possibility that it will become the dominant manufacturing methodology over the next decade -- and a certainty that it will take its place as a major force in the supply chain, in any case.

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