Written by Hrishikesh Pawar

and Fevos Charlampidis

and Fevos Charlampidis

Could 3D printing herald a new era of lean supply chains?

Some of the key principles of lean include providing exactly what the customer wants, offering shorter order cycle times, and reducing transport and inventory to eliminate waste. Perhaps it is strange then that in the last 20 years most supply chains have moved in the opposite direction.

Globalisation has led manufacturers to move production to mega-factories located on the opposite side of the world from the customers to which they deliver. The result has been a move towards large batch production, lengthening lead times, increased transportation and growing finished goods inventories. Not lean at all!

Will new technologies and manufacturing strategies such as 3D printing (3DP) and distributed manufacturing finally herald a new era of truly lean supply chains with personalised products, made on demand and manufactured close to customer demand?

According to research carried out by Panalpina, the move towards distributed manufacturing is already happening and as 3DP technology becomes more mainstream, the trend towards truly lean supply chains is about to accelerate. 

Why are supply chains changing?

Although technologies such as 3DP are making the headlines, other factors are challenging companies to re-think their manufacturing and supply chains. Economic volatility, equalizing of global labor costs and huge fluctuations in oil prices are just some of the elements making it increasingly difficult to sustain the traditional supply chain model centered on a singular manufacturing unit based in Asia.

The drivers of distributed manufacturing:

 

Perhaps the biggest change making companies re-think their supply chain is changing customer demands – customers increasingly want personalised products and shorter lead times – neither is easy to achieve with centralised production in Asia.

Consequently, manufacturers are increasingly embracing the philosophy of distributed manufacturing – having multiple, smaller factories located closer to customer demand. And with this, supply chains are being transformed from traditional bulky models to leaner ones with reduced lead time, less inventories and more opportunity for personalised production.

Logistics companies like Panalpina that have a global footprint, are ideally positioned to transform facilities that were once used for storing finished goods into manufacturing facilities that make them. This idea of combining logistics and manufacturing processes is something that is radically changing supply chain design. What’s more, technologies such as 3D printing are expected to change them even faster, and even further.

Integrating 3DP into the supply chain will radically change the way products are made

Integrating 3DP technologies into the supply chain can provide versatile benefits ranging from manufacturing aspects, to streamlined supply chains and new business models for personalised products.

3D printing is not as new as many people think. The concept originated in the 1980s, but it has seen rapid growth in the past five years. This ground-breaking technology finds application in such varying fields as medicine, aerospace, the automotive and food industries, fashion, sports and many more that may not have even been considered yet.

The technology completely overturns current manufacturing and supply chains wherein the production is shifted from mega-factories in Asia, to mini factories that can move as demand changes.

Thanks to 3D printing, there is no additional manufacturing effort needed to produce a part with added complexity. When complexity is not a barrier anymore, it gives companies more possibilities to personalise products for each customer. This, together with the possibility to locate printers and production closer to the end customer, is what is attracting a growing number of companies to look for ways to integrate 3DP into their supply chains.

The growing 3DP industry

According to latest market research from Wohlers Associates, the global market for additive manufacturing reached $5 billion of sales in 2015. It is predicted to reach $12.8 billion by 2018 and exceed $21 billion by 2020. Aerospace (including defence) and the industrial sector (including construction) currently each account for 18% of sales, followed by the healthcare sector with a 16% market share. Automotive and jewellery sectors both represent 12% and the energy sector 5% of the market. Other smaller sectors make up the remaining 19%.

Applications of 3D printing

Medical: 3DP is currently used to produce personalised implants, prostheses, hearing aids, and U.S. FDA (Food and Drug Administration) approved 3D printed drugs for epilepsy and custom formulations based on the special needs of a patient. Concrete work is being carried out to develop novel applications including bio printing of tissues and organs.

The American hearing aid industry, which manufactures all of its hearing aids using 3D printing technologies, successfully converted to the technology in less than two years, showing promise for other comparable areas.

Aerospace: For the aircraft industry current 3D printing applications include manufacturing of prototypes, demonstration units and small volume production of cabin and cockpit equipment, functional lightweight components such as lightweight belt buckles made of high-quality Ti64 titanium, air conditioning and heating elements made from robust plastics, cable ducts and loading systems, parts for catering and sanitary areas, functional engine parts with complex geometries and defined characteristics, fuel systems, guide vanes and turbine blades, add-on systems and special heat protection components.

3DP is also used for Unmanned Aerial Vehicles (UAVs) to produce smooth master patterns, prototypes and models. In the future, the focus of 3DP in this area will shift to increased product quality, higher production speed and larger UAVs.

Automotive: Current uses include accelerating the product design of new models, enhancing quality via rapid prototyping, customised fabrication of tooling, and reducing tooling costs in product design. 3D printing technology will allow for more complex designs that drive weight reduction, reduce assembly and production cost through part simplification, customisation and improved market responsiveness. In addition, it will reduce spare part inventories.

Consumer goods: 3D printing has generated positive results for consumer goods including electronics through prototype development, new product and concept designs, and parts prototyping. Manufacturers are slowly moving beyond prototyping applications with more growth projected in the near future following advancements in materials and equipment. A growing number of consumer-friendly applications and marketplaces is also driving the sales of desktop 3D printers and the industry as a whole.

Fashion: This industry currently uses 3D printing for the manufacturing of jewellery and shoes with some designers using the technology to make bespoke dresses. The customisation of shoes is also extended to the sports industry where leading sports shoes manufacturers are piloting the use of 3D printing of shoes with soles customised to fit individual consumers’ feet.

How Panalpina is integrating 3DP to help its customers move to leaner, more distributed manufacturing networks

Introducing manufacturing services and 3DP requires a major change for any company and Panalpina is no exception. Following the company’s successful collaboration with Cardiff University to develop the new inventory optimisation application D2ID (Demand-driven Inventory Dispositioning), the company will again use a KTP (Knowledge Transfer Partnership) to combine academic research in the fields of 3DP and supply chain design.

As Panalpina currently moves many of the world’s products, it is in the perfect position to study these and identify how their supply chains could be re-engineered and made leaner using 3DP technology.

Last year, Panalpina invested in its first 3D printer to gain first-hand knowledge of how the technology works as a complement to its Logistics Manufacturing Services (LMS) offering. Having gone through this learning curve the company is now positioned to take the business further. Panalpina’s facilities can be equipped with 3D printers to cater to its customers’ needs and radically change the traditional supply chains from a linear to a more fragmented, distributed and leaner model.

We in Panalpina believe that the logistics industry can lead the change, shifting the supply chain focus from looking for the cheapest manufacturing location, to looking for the best logistics and manufacturing set-up. At best, this means meeting customers’ demands for personalised products with short lead times and the least amount of inventory and cash tied up. In other words, a lean supply chain.