3D Printing: Bringing Jobs Back to The US, While Changing The Fabric of Manufacturing


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With everyone from private enthusiasts to industry experts and CEOs heralding 3D printing as the next great manufacturing shift, it can be easy to forget the last sea change in the industry—the effects of which are still very much2-6 being grappled with at every level. Before 3D printing there was outsourcing, and it made itself hyper-profitable for companies operating on volume margins. The ability for Chinese factories to mass-produce a given widget at a lower cost per unit than U.S. factories made it a no-brainer business move for many.

This was not just a revolution in the logistics and structure of marketing, but in global economics. Seemingly overnight, employers once assumed to be golden tickets for American workers were conducting layoffs and moving their operations to China to save money, and Americans flocked to Wal-Mart to reap the rewards at the register. While unemployment in certain U.S. sectors increased, China’s middle class exploded, as a rush of overseas money was opened up to unskilled, uneducated Chinese workers.

2-1This shift to overseas manufacturing—and especially assembly, in the high-tech industries so often represented by Apple—was not without its caveats, however. No sooner did the first assembly lines start running than the markets from East Asia and beyond began flooding with knock-offs, cheap imitators, and sketchy off-brands made on the fourth shift at the new outsourced factories.

It turned out that relying on volume to cover the cost of international logistics came at the expense of intellectual property protection. Only recently has the Chinese government begun to take seriously the problem IP theft poses to its trade relations around the world, and it still has a long way to go in gaining back lost ground.

After all, how valuable are the pennies saved on mass-production if the very designs guiding production are stolen, copied, and distributed among competitors? This is where 3D printing makes its mark: it’s not just influencing the manufacturing world, but, once again, it’s changing global economics. As the costs of international logistics and lost IP continue to rise, there have already been considerable shifts back toward domestic U.S. manufacturing. By enlisting additive manufacturing to produce prototypes and specialized tools, more companies of every size have more opportunity to closet the secrets of their new concepts from unscrupulous factory owners abroad. As 3D printing technology costs continue to drop, new opportunities for product development are opened up without dependence on the factory model, and absent a given factory’s infrastructure limitations.

Prototyping is one of the well-known benefits of 3D printing, at least in terms of time and materials costs. The hard-learned lessons of IP vulnerability in developing markets is adding a new impetus to home-based preservation of the manufacturing process.

The benefits of domestic 3D printing technology are not limited to dealing with uneven enforcement of IP laws. Driven in part by the ascension of internet shopping, the retail industry as a whole is shifting away from mass-production and profiting off of volume.

Online retail and increased consumer access to industry information is putting a rapidly growing emphasis on speed to market. For overseas factories, this means predicting how much of a product to mass-produce and when, in order to ensure sufficient time and supply, to cater to markets around the world. With additive manufacturing, this means having a printer as close as possible to the market or end-user, with no delays for customization, and no lag period while a giant ship trudges halfway around the world–laden with containers. It would be difficult to think of a manufacturing location further from the market than current outsourced factories.

Logistics aside, a factory must be retooled at great expense for each new product coming down the line, and for each product change or upgrade. The current model of overseas mass production is extremely inefficient at any sort of 2-2customization on a limited scale. Through additive manufacturing, the cost per unit remains flat without the need for costly retooling delays, and products can be customized on an individual scale without throwing off the whole production

Despite the growing shift back to domestic production, 3D is not necessarily the end of traditional manufacturing methods, or even outsourced factories. Assembly of various specialized parts is still often an important, irreplaceable component of the process across various manufacturing industries. Additionally, there is still a huge variety of products that need to be mass produced and require minimal retooling.

What the shift toward speed to market and increased customization means is that assembly is likely to move back, in part, to American shores, along with the intellectual property protection and component manufacturing that is so unreliable overseas. Outsourced production of items with reliably high, regular demand and low IP value may yet remain abroad; specialized, innovative products with fluctuating demand and high IP value are likely to be brought home by the new capabilities of 3D printing.

The drive away from outsourced manufacturing is not one-way, either. While its function as The World’s Factory has brought a massive influx of wealth, it was never built to last. Under pressure from the U.S. government and international market forces, the Chinese government has allowed the Yuan to gradually appreciate against the U.S. dollar, reducing the already slim margin that made outsourcing profitable. Even without the advance of 3D printing, this alone would drive manufacturing back eventually.

2-3Focusing on assembly and manufacturing has come at the expense of innovation in China, with a dearth of unique patents being brought to market, beyond a few transparent knock-offs that cannot be retailed outside of the country. Poor regulation in the field of IP has been something of a double-edged sword, leaving many finding greater wealth by opening a factory—whether outsourced, or a domestic black-market enterprise—than by developing a unique product, brand, and market space abroad.

As U.S. manufacturing continues to withdraw, China will have to take its economic development strategy to the next level. In order to compete with international companies with established brands, products, and reputations, factory space will have to start shifting toward production of Chinese-developed goods, and implementing stricter IP laws and enforcement to protect fledgling brands. Unlike in the U.S., however, China will have the opportunity to shift directly and quickly to taking advantage of state-of-the-art 3D printing even as the outsourcing model crumbles, rather than waiting for the technology to catch up with demand.

The ascension of 3D printing is indeed a revolution, but it is also a return to domestic production, as it provides new means and imperatives for economies old and developing to redraw their manufacturing blueprints. Discuss this story in the 3D printing & Jobs forum thread on 3DPB.com.


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