The real value of 3D printing in the supply chain

Prototyping, the earliest stage of the manufacturing lifecycle, has been driver for 3D printing for many years. With the technology maturing, there has been a strong movement towards the production of functional parts. Spare and service parts (long tail/end of life phase) are interesting candidates for this production technique. Aggregating and analyzing supply chain data – and technical data points with a focus on feasibility – is a best practice to determine the value 3D printing can bring to the supply chain.

By Tibor van Melsem Kocsis

So, how can you visualize this value? For a manufacturer, producing a part, such as a hinge or lever, with 3D manufacturing will be multiple times more expensive than traditional mass production. If demand for the part is low, the situation changes. The supplier may have a lead time of weeks and would likely impose minimum order quantities, 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 or at multiple locations 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 parts that you need, as you could save between 56 to 95% on average in Total Cost of Ownership.

Does it make sense to buy industrial quality 3D printers for your company? You need to evaluate if their utilization will actually justify the investment and if it’s actually cost-effective to produce in your own factories when you can take advantage of distributed manufacturing. If you want to benefit from local production and minimize existing logistics costs, you may be better off working with a supply platform instead of buying equipment for multiple locations. Consider that you’d need to train your staff or hire skilled people to operate the machines as well.

A cost-benefit analysis is an absolute must and should determine whether you need to invest in your own equipment or work with an external provider. In either case, it’s 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.

The shift to additive manufacturing can have a disruptive impact on your business. Like other digital technologies, it can generate opportunities for new business models and value creation. 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 digital transformation?” Start experimenting with new technology as part of a digital supply chain, learn through testing and then prepare to institutionalize it.

 Tibor van Melsem Kocsis is the CEO of DiManEx, a global Enterprise Supply Platform for distributed 3D Manufacturing offering an end-to-end service