Jun 14, 2016 | By Hans Thalbauer

Your company may be looking at how you can leverage 3D printing. But are you viewing this disruptive technology through all the lenses you should be?

If you’re a manufacturer, you may be wondering which products you can produce through additive manufacturing, or which products your competitors are thinking about producing in this way.

If you’re not a manufacturer, you may be thinking that 3D printing doesn’t really apply to your business, except that some products you buy in the future will be produced on 3D printers.

But you might want to take a broader view of 3D printing. Because the true disruption of additive manufacturing won’t be in individual products or spare parts. Instead, it will be in business models and markets. Even if your company has nothing to do with manufacturing, 3D printing could affect you in profound ways.

Here are just a few of the broad range of functions additive manufacturing has the potential to transform:

Shipping — Shipping and logistics are among the industries that will most obviously be affected by 3D printing. Additive manufacturing allows product makers to place production physically closer to the customer. That can disintermediate not only major express-delivery companies, but everything from international container shipping to regional freight forwarding, as well. And you can easily imagine an Uber-like approach to on-demand local delivery, making “last-mile” shipping up for grabs.

Warehousing and inventory — On-demand additive manufacturing obviates the need for large investments in warehousing and inventory. U.S. businesses alone currently carry $1.8 trillion in manufacturing and trade inventories, according to the U.S. Census Bureau. A reduction of just a few percentage points could shave billions of dollars in costs. Those savings can expand sales margins, they can be passed on to customers, or both — good for manufacturers and consumers alike. At the same time, manufacturers will have to rethink their current investments in large warehouses.

Service depots — Especially in consumer goods and IT equipment, manufacturers and service providers have invested in large, centralized depots to service durable goods and other high-price-tag products. But with more individualized and distributed production, will centralized service depots make sense? When replacement parts can be manufactured on demand close to the customer, there’s less need for investment in service hubs.

Imports/exports — Siting manufacturing near the customer can skirt major import/export taxes and related costs. It can also let you avoid shipping costs, as well as associated CO2 emissions, which could be a strong selling point for some customers.

Additive manufacturing could also overturn assumptions and cost models for where to locate production facilities. Rather than operating or outsourcing to a large factory in an emerging market where labor is cheap, it might make sense to run a small 3D printing facility in the target developed market. Alternatively, rather than manufacture in established technology corridors and then ship to emerging markets you’re just beginning to enter, it might make sense for production to remain close to sales in every market.

Innovation and prototyping — While two-thirds of U.S. manufacturers are using 3D printing for final products, more than half are using the technology for prototyping, according to PwC. So even if a product will never be produced through additive manufacturing, the approach can dramatically speed innovation. That has implications for your R&D function, which will have to become accustomed to faster design cycles. It also presents opportunities for startups to outcompete established rivals.

Intellectual property — Consumers will increasingly gain access to 3D printing files. They can use those files to produce their own products and replacement parts, and they can share those files with other consumers. They can even modify 3D printing files to make improvements to your products. Essentially, consumers have the opportunity to become manufacturers themselves.

In this new marketplace, how will you protect your intellectual property for the products you design, and how will you protect your revenue streams for the replacement parts you produce? In some cases the solution might be to forge close relationships with such “prosumers,” encouraging knowledge sharing and making consumers active participants in product design.

Customer relationships — In fact, 3D printing promises to affect customer relationships in a variety of ways. For starters, it can transform who owns the relationship between your brand and the end customer.

Let’s say you’re a fashion brand and sell only through retailers, with no direct contact with consumers. Because 3D printing allows consumers to order individualized products, you might now want to disintermediate your retailers. Or, you might want to partner with retailers to help them develop the capability to accept custom orders.

In either case, you need to do more than simply use 3D printing to produce an on-demand, individualized product. You also need to invest in the entire infrastructure to capture and fulfill custom orders, quickly and seamlessly. For many manufacturers, this is uncharted territory.

Forward-thinking companies are viewing additive manufacturing through all these lenses. Logistics company UPS, as just one example, is already investing heavily in 3D printing in anticipation of its effects on the logistics industry. Smart companies across industries will take the same initiative in perceiving the true implications of 3D printing and leveraging those insights to maintain competitive advantage.



About the author:

Hans Thalbauer, General Manager, Extended Supply Chain, SAP

Hans Thalbauer is the General Manager for Extended Supply Chain solutions at SAP. He is responsible for the strategic direction and the Go-To-Market of Supply Chain, Logistics, Engineering/R&D, Manufacturing, Asset Management and Sustainability solutions.

In this role, he is engaged in creative dialogue with numerous companies worldwide, addressing customer needs and introducing innovative business processes, including the vision of leveraging networks and the Internet of Things to reflect customer centricity and the speed needed in the Extended Supply Chain.

Hans is more than 15 years with SAP. He held positions in Development, Product and Solution Management. Hans holds a degree in Business Information Systems from the University Vienna, Austria.



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Richard wrote at 7/4/2016 8:50:58 AM:

In the old days, before plastics became widespread, an Austrian company came out with what they called the Unimat. It was a great little all around machine tool to carve metal. They were widely used in the WWII German Uboot fleet, because the Uboot didn’t need to keep extras of all the parts that might wear out or get damaged, rather the machinist on board could manufacture the part as needed for repairs at sea. Other than for light use hobbyists and similar type work, it never became popular in manufacturing, as specialized machines worked far better for manufacturing. The Unimat is no longer made, though there are a couple of other similar machines still being made. 3D printing is much like the Unimat—great for one-offs, short runs, repairs that can be made on the scene, but the quality and speed are not there for large scale manufacturing. One advantage it has is that it is newer technology that can make specialize parts that were impossible before, but except for a few high value, previously impossible parts, what is the probability that 3D printing will displace present manufacturing practices any time soon?

Bob wrote at 6/15/2016 11:32:08 AM:

The article states two-thirds of US manufacturers are using 3D printing for final products but the source referenced states 6.6 percent. Further, the report cited results from just 120 manufacturing professionals. Other than hearing aids its hard to think of anything we come across in daily life or while shopping that is 3D printed. The article conveys pretty much the same hype that's been going on for over five years, that 3D printing will suddenly begin to disrupt mainstream manufacturing. While investment continues, especially in applications involving metal printing, clearly the market sentiment is that 3D printing quality and economics for end use products has a long way to go--HP's new tech notwithstanding.

James Weiler wrote at 6/14/2016 11:43:11 PM:

"While two-thirds of U.S. manufacturers are using 3D printing for final products" - This statement is misleading. It may be true that 3D printing is used in product development for 2/3rds of US manufacturers, but it is not used in production for 2/3rds of all manufacturers.

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