How 3D Printing is Revamping Supply Chains and Operationsby

Joseph Kissinger

The purpose of this position paper is to provide insight as to how 3D printing will impact supply

chains through reduced lead times, leaner inventories, lower costs, and increased effectiveness mass

customization. Some consider 3D printing to be a technology that could lead to localized manufacturing

and simpler supply chains. “IBM researchers believe 3D printing can change the classic mass-production

paradigm that bigger is better, production is global and supply chains are highly complex” (Biederman,

2013). IBM formed this belief after conducting a study to show the potential impact of 3D printers on

supply chains.

Industries already taking advantage of 3D printing include the medical field, aerospace, and

automotive sectors. These industries use 3D printing for rapid prototyping and to manufacturing

specialized parts. IBM went outside of this realm a bit and disassembled three items during their study –

a cell phone, a hearing aid, and a washing machine. What researchers found was that 3D printing could

reduce lead times and lower costs through the elimination of investments in machine tools, casts, and

molds. For example, the washing machine used in the study was made up of 63 mechanical parts. These

parts were estimated to be supplied by 30-60 different companies and included molding parts, stamping,

and a production line. IBM found that each of the mechanical parts could be made with a single 3D

printer. Thus, the supplier base could be significantly reduced making for a shorter and simpler supply

chain (Biederman, 2013).

From this study, IBM concluded in its executive report titled, “The New Software-Defined

Supply Chain”, that 3D printers “[free] companies from the need to build standardized parts and pursue

economies of scale” (Brody and Veena, 2013). 3D printers do so by eliminating the need for an

intermediary step to purchase metals and plastics typically used to create molds. “With 3D printing, you

can go directly from a design to a part” (Brody and Veena, 2013). This allows for enhancements in

accuracy which leads to on demand manufacturing and an increased potential for customization. Free of

the requirement to pursue economies of scale, risks in the supply chain and manufacturing process will be

reduced. This will be driven by leaner inventories allowing for more accurate demand forecasts and

shorter product design cycles made possible through rapid prototyping.

Another advantage of utilizing 3D printers is its cost effectiveness, proven by its ability to

produce relatively large product volumes of hearing aids and dental crowns. Further, these products are

able to be customized to fit individual customers through the use of dental CAD software (Research and

Markets, 2013; New trends in 3D printing, 2013). According to IBM’s study, it is already cheaper to

make significant components of hearing aids using 3D printers. IBM also estimates that by 2022,

“hearing aids made with […] 3D printers will be up to 65% cheaper than with traditional manufacturing

approaches” (Brody and Veena, 2013). The use of 3D printers to manufacture components as well as 1

finished products will reduce the need for large supplier networks, providing an opportunity to bring

production to a regional or local level, rather than the global level it presently operates in due to the need

to achieve scale. With localized production sites comes easier and cheaper distribution and

transportation.

Despite the aforementioned advantages of utilizing 3D printers, manufacturing leaders remain

“ill-prepared” for their impact (Brody and Veena, 2013). Many consider the buzz surrounding this

innovation as “hype”, as Amy Machado, senior research analyst at IDC, claims that “3D printing is

unlikely to ever revolutionize manufacturing” (Biederman, 2013). However, others view the introduction

of 3D printers to manufacturing processes as “game changing” for industries with high-value and

customized parts. For example, NASA tested and compared the performance of printed and

manufactured parts for its heavy-lift rockets and found that printed parts could be made in three weeks for

less than $5,000 whereas traditional parts were made in six months at a cost of more than $10,000 each

(Biederman, 2013).

3D printing has increased the possibility of customization and proponents for digital printing

believe the technology could be used effectively in mass customization. This can be seen in the apparel

industry, where mass production often leads to a significant amount of waste as every consumer is unique

and clothing will not fit or be valued by everyone. Joseph Pine, co-founder of Strategic Horizons LLP

and co-author of the book “Mass Customization: The New Frontier in Business Competition”, suggests

that 3D printing makes the process even easier than using modular equipment, a common feature of mass

customization. Further, Dr. Frank Piller, co-director of the Smart Customization Group at MIT, suggests

that 3D printing and digitalization may change the need for modularity, in the future, and allow for truly

unique solutions for the consumer.

To illustrate his point, Dr. Piller considered the purchase of shoes. 3D printing will allow the

customer to choose the model, size and color of their shoe from a manufacturer’s “menu”. The real

customization is in the possibility of 3D printers to customize the fit of the shoe for each individual.

Though this would require consumers to have their foot scanned, a whole collection of shoes could be

manufactured in the future by using the same scan. Here is where we will see mass customization, as

consumers will be able to choose the color, model, and size of their shoe as well as which material they

would like it to be made out of and how they prefer their shoes to fit. “Instead of pushing what you have,

the consumer pulls what he wants,” says Joseph Pine. Producing on demand reduces waste and

eliminates shipping costs for products that won’t be sold by retailers (Bolgar, 2014).

To show the impact 3D printers are already making, consider the following statistics, found in an

article dated 2013: “The 3D printing industry has grown at a 274 percent compound annual growth rate

over the past three years. In 2012, the worldwide market for all 3D printing products and services was

$2.2 billion, up from $1.7 billion in 2011. Revenue is expected to reach $10.8 billion by 2021, according

to 3D printing consultants Wohlers Associates” (Biederman, 2013).

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Though 3D printing has not yet been captured on a global scale, there is an opportunity for

manufacturers of high-quality products to act proactively and lead the change that is sure to be seen in the

future, especially since many manufacturers are “ill-prepared” for this technological change.

Manufacturing with 3D printers can help a firm build flexibility into their supply chains, reduce costs, and

provide customers with customized products manufactured on mass scales, thus making products

affordable but of high-quality. 3D printing has the potential to reduce the necessity to achieve scale, and

to therefore ease barriers of entry to the competitive landscape, change the current thinking that “bigger is

better”, in terms of scale, as production can be localized and components can be manufactured and

assembled by a sole printer, thus ultimately reducing the complexity of manufacturing supply chains.

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Works Cited

Biederman, D. (2013, Oct 24). 3D printing transforming the way companies think about supply chains.

Journal of Commerce Retrieved from

http://search.proquest.com.jproxy.lib.ecu.edu/docview/1444693757?accountid=10639).

Bolgar, C. (2014, September 8). 3D Brings Mass Customization Closer. Retrieved May 30, 2015, from

http://perspectives.3ds.com/manufacturing/3d-brings-mass-customization-closer/

Brody, Paul, and Veena Pureswaran. The New Software-defined Supply Chain. Rep. July 2013 ed.

Somers: IBM Global Services, NY. Print. Electronics Industry. Retrieved from http://www-

935.ibm.com/services/multimedia/The_new_software-defined_supply_chain_Exec_Report.pdf

New Trends in 3D Printing - Customized Medical Devices. (2013, May 30). Retrieved May 30, 2015,

from http://envisiontec.com/trends-in-3d-printing-of-customized-medical-devices/

Research and markets: Low-volume manufacturing: Mass customization markets for the 3D printing

industry 2013-2022. (2013, Nov 26). Business Wire Retrieved from

http://search.proquest.com.jproxy.lib.ecu.edu/docview/1461731346?accountid=10639

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