How will 3D Printing Affect Supply Chains?
Updated: Sep 24, 2022
3D Printing, also known as additive manufacturing, builds a 3D object similar to the way a printer that prints text or images to a flat surface (paper, cloth, etc.). I first became aware of 3D printing on an MBA trip to Finland in 2014. While it had already existed for a long time and had strong enthusiasts, the technology was not quite ready for wide commercial adoption. It was slow, prone to print errors and printer malfunctions. We are still in the early phase of this technology, but I think the industry is set for growth. According to statista.com, the worldwide market for 3D printing is estimated to grow from 17.4 billion USD this year to 37.2 billion USD by 2026.
Supply Chain Structure
3D printing will play a strong role in the current trend of nearshoring. 3D printers can be located close to where it is required and reduce the time and costs of transportation. This advantage also reduces supply chain risk as it is less reliant on cheap foreign labour and fuel costs.
3D printing is able to manufacture more complex shapes than traditional methods. As a result, with design improvements, completed end products will require fewer parts. This potentially reduces the number of vendors and shipments required to create an end product by transferring some of the complexity of managing the supply chain to a manufacturing process that is automated.
Efficient supply chains have always supported customer demand. Rapid prototyping and mass customization enable faster and more diverse product development. New developments will create products that have not been possible before. Having a larger scope of products can put less strain on supply chain operations because customers are not spending efforts sourcing alternatives. Greater degree customization and supply chain adaptability to market requirements will also reduce inventory requirements as inventory is essentially a hedge against uncertain demand.
Additive Manufacturing compare to traditional subtractive manufacturing produces less wasted materials. Only the materials needed are ‘added’ to the product. This reduces material costs and reverse logistics costs required to dispose of or salvage post-production leftover materials. While this is probably not the primary advantage of 3D printing, it does contribute to sustainability efforts and can add up at scale.