More Than Logistics: UPS is Using 3D Printing to Completely Transform Their Industry and Business Model
The thing that has always struck me as disruptive about 3D printing is the unpredictability of who and how it is going to be used. The fact is, you just never know where it’s going to show up, and who is going to be using it. 3D printing seems a natural extension of services for companies like Staples or Home Depot, as they have already been in the market of providing small business services to their customers. But who exactly could have predicted that a shipping company like UPS would be one of the fastest growing 3D printing service providers in the country, through The UPS Store?
It started small of course, a handful of their physical locations started including a 3D printer on-site to offer customers an additional service while they stopped in to ship a package. But now, barely a year later and that additional service has spread to more than a hundred locations all over the country. But on-site 3D printing services are only part of the future of one of the largest private shipping companies in the world, and it is becoming evident than in a few years it may not even be accurate to call them a shipping company any longer.
It is important to remember that UPS has always referred to themselves primarily as a logistics company, and now, according to UPS vice president of marketing for global logistics and distribution Alan Amling, that is going to include light product assembly and manufacturing. In a conversation with InformationWeek, Amling detailed exactly how 3D printing is going to factor into the future of the company, and how they’re going to do it.
For a company that sells customized golf clubs like Hopkins Golf the ability for UPS to store individual components, assemble them together when an order is placed and ship directly to the customer is a key part of their business plan. What is sort of brilliant about this particular partnership is the benefits that the relationship offers both companies. For Hopkins Golf they only need to source the parts and make sure that UPS is fully stocked, there is no need to assemble the clubs themselves, package them up and ship them off to customers. Not only does that save them time and allow for faster fulfilment in the age of Amazon Prime, but it reduces the amount of staff that they need as well as virtually eliminates the need for packaging or shipping materials.
UPS benefits by saving on the manpower required to physically pick up Hopkins Golf’s products from their shipping location and physically transport them to a UPS distribution hub. By having the products already in their central shipping facility, where staff can pick and ship what is needed, they can almost instantly be sent directly into their shipping network. This is a service that is already being implemented successfully and has proven itself to be viable. And according to Amling, light manufacturing using 3D printers is simply the next step of this type of service.
“You’d never want to make and store all the possible combinations [of Hopkins Golf clubs]. UPS stores shafts and heads and puts them together to order — this is light assembly that’s already being done. 3D printing coupled with pre-manufactured parts is the next evolution,” Amling told InformationWeek.
UPS recently invested heavily in a 3D printing services company called CloudDDM, who set up a large bank of about a hundred industrial 3D printers inside of the massive UPS facility in Louisville, Kentucky. The workflow is pretty simple, a company offers 3D printable products, or products that need light assembly with 3D printable components. When a customer places an order, it is sent over to UPS and any parts that need to be 3D printed are sent directly to CloudDDM. Once the product is printed and assembled, it is immediately shipped out to the customer. CloudDDM founder Rick Smith sees his new partnership with UPS as a way to set his company apart from his competitors.
“Most of the service companies in the space are mom and pop, but CloudDDM is trying to be a manufacturer with some scale. The target parts are things like low-volume replacement parts that might fall below the minimum order from a manufacturer,” explains Smith. “We talked about this huge disruptive tech over a 50 year span. UPS is a supply chain management company. They want to go to customers and tell them this is how to think about additive manufacturing.”
While it is still early days for this type of service, and both UPS and their customers have a lot of logistical issues to work out, creative logistics is what UPS is known for. Not only is this an evolution of the 3D printing service provider market, but it’s a complete disruption of the light manufacturing, shipping and fulfilment markets as well. UPS has a huge network of customers all over the country, and a sizable staff of people who manage them. If anyone can successfully proselytize the benefits of using this type of business model to their clients it is going to be UPS.
According to Amling, the goal of their new light manufacturing and digital reordering business model will require the use of every resource that UPS has available to them. That means using both the CloudDDM printer farm in Kentucky and the 3D printing capabilities of local UPS Stores to to the work. They just need to put a system in place to figure out what can be done where, and how much time will it save them. UPS is a global company, so the plan is to put this new model into place everywhere, however the company is currently restricting it to the US until they get the new model just right. But honestly it is only a matter of time before they do, and I fully expect to see similar fulfilment models implemented by other large online retailers like Amazon (which already offers something similar without the 3D printing) and Wal-Mart.com.
At a previous job I worked closely with UPS for several years, and the few times that I was able to look into their logistics network it was sort of like walking into an Escher painting come to life. Nothing seemed to make sense to me, but for some reason it all seemed to work both quickly and efficiently. With the plans that UPS has for 3D printing, it’s pretty clear that logistics is just another industry that is being transformed by 3D printing. Discuss this story in the UPS 3D Printing forum on 3DPB.com.
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