3D Printing Is Transforming the Supply Chain

By Guest Author  |  Posted 03-02-2015 Print Email

More than one-quarter of middle market companies are in the pilot phase of 3D printing initiatives, or actually have projects in the works.

By Roger Nanney and Mark Cotteleer

For technology that’s been around for 30 years, additive manufacturing (AM) remains surprisingly unfamiliar to many in the business world.

Advances in additive manufacturing, also known as 3D printing, are reshaping how we make products. The technology allows three-dimensional products to be formed by machines that print materials in successive layers. Among the innovations across a range of industries, it’s breathing new life into medical devices as well as the jets soaring above us with 3D-printed components. Interest in AM is growing among companies and private enthusiasts alike, even if understanding about the technology’s full capabilities is mixed.

In our recent national survey of middle market executives on adoption of technology in this critical business segment, more than one-quarter said their companies were in the pilot phase of 3D printing initiatives, or actually had projects in the works. Four out of 10 leaders in the survey of 500 companies said they agreed or strongly agreed that 3D printing would have an impact on their organizations.

As more companies embrace this technology, it is transforming the product supply chain. And middle market companies have a unique opportunity to tap into this enthusiasm if they maintain a practical perspective and familiarize themselves with the advantages the technology has to offer.

First and foremost, midmarket companies need to keep in mind that AM is important within the constellation of manufacturing methods, but not a universal replacement for traditional manufacturing. Arguably, one of the strongest advantages of AM is the ability to produce parts in ways that are impractical or otherwise wasteful through conventional machining.

Consider manufacturers serving the aerospace and defense industry, one of the earliest fields to test AM technology. Producing a jetliner engine part from a titanium billet can produce significant waste in traditional manufacturing. Manufacturers can use AM to produce a similar component with roughly three-quarters of the same titanium material, which greatly reduces costs.  

Midmarket firms also need to consider their unique position in the supply chain.  And this was on the minds of middle market executives in the survey. Of managers at companies with more than $1 billion in revenue, more than 70 percent said 3D printing would impact their organizations by accelerating product development.  

To accomplish this, middle market organizations need a clear understanding of how to bring the technology’s full capabilities to bear. Designers, for example, need full command of software and data tools to take concepts from inception to the manufacturing table. Production specialists need training and practice on 3D printers. And managers fulfill the crucial role of understanding the value of AM and so their teams can get products to market more quickly.

To help shrink the knowledge gap, Deloitte is offering a complimentary, massive open online course (MOOC) exploring the business case for additive manufacturing. Through a series of 26 segments–including videos, lectures and assessment–participants examine the layers that make up AM technology.

But what about companies that are ready to move from theory to practice? A starter’s guide to AM investment could look something like this: First, companies must become aware of what the technology can do for their business. Next, organizations should build in 3D design capability. Companies should then focus on equipment. That includes 3D printers capable of prototyping, valued at a few thousand dollars, to metal-ready machines and more sophisticated systems, priced into the tens of thousands and even higher.  

Advances in AM also call for midmarket companies to take a serious look at the composition of their workforce. Teams who’ve been responsible for piecing together component parts using traditional manufacturing need to be willing to learn AM or cede their jobs to those with the right capabilities. Workers must understand their position in the supply chain, decide how AM is likely to affect them and identify the new skills they need to acquire.

Finally, companies may feel urgency to get up to speed on AM, but won’t truly maximize the technology’s potential unless they understand the production calendar. For instance, a part might take 45 minutes to print using AM, whereas the corresponding mold can be produced in 30 seconds. Hence, there’s a tendency to believe that 3D printing is slow.

But consider the complexities of the supply chain–a plant is located in one place, while the customer is located elsewhere. Product development, customization and logistics–just getting the products into the hands of the customer–all make 3D printing appear more attractive.

It would be disingenuous to say that AM will rid the business world of traditional manufacturing. More of a breakthrough than a revolution, the middle market can gain a competitive advantage through innovation that is restyling the supply chain.

Roger Nanney is vice chairman of Deloitte LLP and the national leader of Deloitte Growth Enterprise Services.



 

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