How Does 3D Printing Fit into Your Mid-Market Supply Chain?

For mid-market manufacturing companies, 3D printing is becoming a hot topic. The first prototypes rolled out thirty years ago, but only recently, because of technological improvements and falling costs, has 3D printing come into the mainstream. The technology has grown at a faster pace than many expected, with a market share of $2.2 billion in 2012, up 28.6 percent from the previous year according to the 2013 Wohler’s Report. In fact, ​McKinsey Global Institute research suggests that the market could grow as large as $550 billion by 2025. Hobbyists are exploring the limits of the process to create everything from action figures to parts for home appliance repairs, but the largest impact will be felt in the manufacturing sector.

Mid-market manufacturers across all industries should evaluate how and where 3D printing can supplement their existing supply chain. 3D printing offers an extraordinary opportunity for mid-market companies to increase flexibility, responsiveness and cost savings when the technology is incorporated smartly and strategically into an existing supply chain.

Responsiveness as a Competitive Advantage
If your company relies on a global supply chain, then disruption is likely no stranger. Having a 3D printer on hand or available can provide a low cost and reliable back up plan when disruptions occur. If vendors have short-term supply problems (e.g., broken machines, regional turmoil or shipping delays), 3D printers enable mid-market manufacturers to temporarily produce some components in-house.

Volatile demand forecasts or unusual customer requests can also drive the need for responsiveness. Manufacturers that use 3D printing at their own sites, and print based on demand forecasts and inventory levels, can keep a tighter rein on production while ensuring that required parts are available. This added level of control is quite beneficial for necessary but low-demand inventory such as legacy spare parts. As-needed printing allows manufacturers to keep on-hand inventory levels to a minimum and reduce warehousing requirements.

This kind of fast and nimble response to market demand can be a major competitive differentiator for mid-market firms compared to large enterprises.

Visualize Cost Savings
Many mid-market companies may not be financially equipped to establish traditional manufacturing sites abroad, but small 3D printing facilities may be within their budget. Manufacturers and distributors may also benefit from placing printers in strategic global locations to avoid taxes, landing costs, customs delays and holding costs.

Also, the costs associated with design and R&D on a new product can be a barrier to innovation, especially for mid-market companies watching expenditures and cash flow closely. For example, injection molds are relatively expensive to produce, especially if several molds are needed during product development. 3D printing, however, eliminates the initial need for casting expense, which can greatly decrease the cost of testing and rapid prototyping.

Effective Use of 3D Printing Requires Real-time Visibility and Control
3D printing offers the potential to change the way mid-market companies operate over the next few years. For the benefits of on-demand printing to be fully recognized, companies need real-time visibility and flexible control across the supply chain. As 3D printing is integrated as a supplement to traditional manufacturing, a supply chain collaboration and management solution can provide vital information and control such as:

• Advanced warning of delivery delays so that the necessary components can be printed locally in the short-term.
• Drop-ship management for externally sourced and internally printed components.
• Inventory holding cost evaluation for targeted 3D printing or retirement of legacy components.
• Route and sourcing optimization that allows for rapid response to import regulations, shipping delays and regional disturbances.

Creating and maintaining a flexible, responsive and cost-effective supply chain requires the constant evaluation of new strategies, processes and technologies. With the support of intelligent operations and supply chain collaboration, 3D printing promises to be a powerful complement to traditional manufacturing and the end-to-end supply chain.  Let’s hear your thoughts on how 3D printing will change the manufacturing industry, and be integrated into mid-market supply chains, in the 3D manufacturing forum thread on 3DPB.com.

Written By:  Josh Noble, Account Executive, TAKE Supply Chain