Debunking the 6 most common myths about industrial 3D printing and its impact on supply chains
by Tibor van Melsem Kocsis
3D printing has come a long way since its inception in the 1980s and is set to become an industry worth $55.8 billion by 2027, disrupting the $T12 manufacturing sector. We’ve all heard about its potential to upend supply chains and business models. But to this day, the benefits of 3D printing, also referred to as Additive Manufacturing, remain elusive to most supply chain executives. This is largely due to a number of myths and misconceptions. Let’s delve into these myths and discuss how supply chain leaders can generate value by embedding 3D Printing in a digitized and automated workflow.
Myth #1: 3D printing will change the world
It’s no secret that 3D printing has been overhyped. In the early 2010s, we could almost imagine a not so distant future with a 3D printer in every home. It’s 2017 and the craze over 3D printing has somewhat dimmed down. Most people have done a sanity check and realized that there’s much more to 3D printing than buying equipment. You need professionals to design printable files, skills to operate the machines, knowledge of different materials and post-processing expertise, among other capabilities. This has resulted in some extreme reactions (either very positive or completely negative).
The reality is that 3D printing should not be seen as a revolution by itself. It’s simply a means to an end. For businesses, 3D printing heralds a way to smarter and more efficient supply chains. Supply chains with substantial Total Cost of Ownership improvements, better service to customers, higher availability of parts, shorter lead times, and lower environmental footprints.
“For businesses, 3D printing heralds a way to smarter and more efficient supply chains.” — Tweet this
Businesses are under pressure to transform. Growth is slowing, innovative players are disrupting traditional industries, consumers are demanding more sustainable products and as Lora Cecere writes, “current technologies are rapidly becoming obsolete,” driving supply chain executives to redefine their practice. 3D printing is only one of the many technologies affecting supply chains. Advanced analytics, blockchain, autonomous vehicles and IoT are some of the others making the headlines.
How far has 3D printing come in the spectrum of disruption and what exactly can it bring to your supply chain at this stage? There are still limitations to the technology which will determine if it will work for your business or not. But even within these limitations, there’s a lot that’s still possible. The rising number of available materials and further improvements in printer quality are making it easier to incorporate 3D printing into the supply chain. Let’s take a look at some use cases for the technology by exploring the second myth.
Myth #2: Industrial 3D printing will not get any further than prototyping
Ever since the introduction of the technology 30 years ago, 3D printing has been used mainly for prototyping. Recently though, we’ve seen a strong movement towards printing functional parts. As Gartner’s Pete Basiliere states, 3D printing is “starting to press into manufacturing operations that require quick-to-market builds, unique design requirements and even low-volume production runs.”
Business efficiency, customization and innovation are the big driving forces behind this transition. At DiManEx, we see it happening first-hand. Our customers are original equipment manufacturers (OEMs) and parts-intensive companies operating in industries like defense, electric appliances and railway/transport. Our end-to-end digital supply service determines the “printability” of parts, converts part designs into print-ready files, and routes orders to certified printing service bureaus (or hubs) that can produce parts on demand and as close to the end recipient as possible.
Examples of parts being printed through our platform include switches, hinges, handles for household appliances, filters for washing machines, protection covers and housings, small metal parts and cylinder blocks.
Besides material specifications and dimensions, a number of other factors make these parts great candidates for additive manufacturing. Printing these functional parts solves several problems in our customers’ supply chains, including long lead times and prohibitive minimum order quantities (MOQs).
In some other cases, parts may be at their end of life phase, or the supplier may not even exist anymore, making 3D printing an attractive solution. A transport company, for example, worked with us to produce a part that was no longer available. Re-engineering the part and producing it with one of our hubs enabled them to lower their Total Cost of Ownership by 600%.
We’ve seen OEMs use additive manufacturing during the pre-mass production stage of a product in order to reduce risks and time to market as well.
So, how do you find out what’s possible for your business? The best practice is to assess whether 3D printing can contribute to drive down supply chain complexity and costs. This brings us to the fourth myth: are industrial parts too costly to print?
Myth #3: The production cost of Industrial 3D printing is too high
3D printing is still relatively expensive. But looking only at production costs is misleading. As PwC states in a recent report, “manufacturing concerns such as feasibility and production costs are not the whole story.” The full potential of 3D printing can only be determined if companies account for its effects on their entire supply chain and Total Cost of Ownership (TCO).
Consider an example. A mass produced lever could cost $3,02 to produce. 3D printing that lever could cost 4 times more, but if demand for the lever is low, the situation changes. Your supplier’s lead time may take weeks and they may require a minimum order quantity, resulting in multiple years of stock. Managing that extra inventory is expensive if you consider storage, handling, write offs, and ultimately scrapping costs. Moreover, stock is often at a central location and not where it needs to be delivered. Factor in the transport costs too and you’ll be better off printing only the amount of levers that you need.
Let’s take a closer look at the issue of value by delving into the matter of spare parts.
Myth#4: There is little value in the 3D production of service and spare parts
Manufacturing, storing and shipping spare parts is costly and time intensive. Some parts may no longer be available, so lead times are high and some customers may end up walking away. Some companies have to scrap an entire piece of equipment if they can no longer get a crucial part. Others are required by law or company policy to retain spare parts in their inventory.
One of our customers has a 10-year reparability program. This means they commit to stocking all parts necessary for equipment repairs for up to 10 years. Using 3D printing as part of a digitized and automated workflow, they are able to print spare parts only when and where they are needed. This results in more consumer trust and satisfaction, as well as a better brand image.
Another customer was able to reduce its TCO for the production of industrial spare and service parts by up to 80% using 3D printing instead of traditional production.
“3D printing spare parts results in less inventory and waste, a more efficient supply chain.” — Tweet this
The benefits are clear. Companies can decrease their level of inventory and waste dramatically. Production and shipping delays will be a thing of the past, resulting in lower lead times. Parts are manufactured closer to where they are needed, reducing carbon emissions and transport costs. PwC estimates that spare parts suppliers in Germany alone will be able to save €3 billion annually over the next 10 years by adopting additive manufacturing techniques.
Now, the question is, should 3D printing be done in-house? This brings us to the fifth myth.
Myth #5: Industrial 3D printing should be done in-house
Buying industrial quality 3D printers does not make sense for most companies. Their utilization will probably not be high enough to justify the investment. To operate them, they would need to train their team or hire skilled labor. To benefit from local production and minimize existing logistics costs, they would also need to acquire printers at multiple locations. A distributed manufacturing platform removes these hurdles, especially if it facilitates horizontal cooperation with an existing ecosystem of experienced print service providers.
A large service and repair organization with thousands of engineers uses our platform to 3D print spare parts. This allows them to forego the investment in assets as well as the associated training costs they would have to incur if they did everything in-house. They also save money on operating costs, equipment depreciation and idle times; and won’t have to write off equipment which will be subject to rapid technological developments.
Whether you choose to build up internal capabilities or work with a digital supply platform, you do need to consider that 3D printing will impact many facets of your company. This brings us to the last myth.
“Adopting 3D printing will impact many facets of your company, supply chain is the starting point.” — Tweet this
Myth #6: Industrial 3D printing will seamlessly fit in existing organizations
Having addressed the possibilities and the matter of value, I’d like to address a final myth: 3D printing will seamlessly fit in existing organizations. This is an important one because ultimately, a company’s internal discussion about 3D printing should not only be about technology. It should also address business strategy and collaboration. Like many digital transformation initiatives, adopting 3D printing can significantly impact how organizations are internally organized. Therefore, it’s absolutely crucial to get buy-in, not just from the top (a C-level sponsor is key), but also from other stakeholders within the organization.
You will need to consider the legal and IP implications, what it means for your logistics, taxation, IT systems, as well as collaboration across business units. As McKinsey writes, changing manufacturing capabilities will bring “dramatic shifts in company functions and their relative importance on the value chain.” The adoption of additive manufacturing can impact your capital expenditures on factories and warehouses. Ultimately, as EY explains, you could become a branding enterprise that outsources manufacturing and distribution to 3D printing providers entirely.
The shift to additive manufacturing can have a disruptive impact on your business model, so planning for it and seizing the opportunity soon is crucial. Ask yourself “what should my business strategy be in a world that’s being disrupted by 3D printing and how will this impact my supply chain?” Start experimenting with AM as part of a digital supply chain, learn through testing and then prepare to institutionalize it.
Understanding 3D printing — from myth to reality
3D printing is part of a larger digital industrial revolution that is transforming supply chains. This transformation should not be about adopting technology for its own sake. It should be seen as a comprehensive supply chain shift towards an increasingly digitized ecosystem.
A re-definition of how we collaborate, plan, source, make and deliver.
Building up virtual stock leads to lower lead times, better customer service, lower Total Cost of Ownership and supply, and sustainability resulting from lower waste levels and a reduction of inbound logistics.
Do you recognize the potential? Are you curious about the benefits this supply chain transformation can bring to your business? With new materials and equipment entering the market, the price of 3D printing will evolve and approach traditional manufacturing prices in the near future. So it’s vital for organizations to acknowledge that the effects of this revolution will radiate in multiple areas of their business. Preparing for this change is crucial.
Contact me to learn more about DiManEx and evaluate whether 3D printing can be beneficial for your business.
Tibor van Melsem Kocsis is the CEO of DiManEx, a cloud-based service that connects manufacturers and parts intensive companies to a network of certified industrial quality 3D printing facilities.