Global Freight Demand Sinks; U.S. Focuses on Essential Goods
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My love-hate relationship with printers goes way back. I worked in several corporate offices during the 1980s when there was one printer on every floor and it wasn’t working 50 percent of the time. The only person who could load or fix the printer was an executive assistant who had more important things to do.
Then came the age of personal printers, where the only person that could fix them was in India. Every individual I know at one time or another wanted to throw their printer out the nearest – and highest – window.
Now it’s the age of 3D printing (3DP) which has the potential to change more than how we interface with paper. 3DP has the potential to shake up the industrial supply chain.
There are three words that can strike fear in the heart of even the most experienced procurement manager: end-of-life (EOL). End products with a shelf-life of more than a couple of years – such as those in the communications, medical, IT, defense, aerospace, test and measurement, transportation and manufacturing markets – are likely to need repairs. When a component goes EOL, users of the part have only a few choices, and none of them are good. They can buy up existing inventory of that part. They can ask a partner, such as distributor, to buy that inventory. They can see if the part is available in the open market, where excess and EOL inventory is bought and sold; or they can find (or make) a substitute part with comparable form, fit and function.
In almost all of these scenarios, buyers face risk. There’s the risk that they’ll never use the entire EOL inventory they buy. There’s the risk that their partner won’t either. There’s a risk that a part from the open market is damaged or counterfeit. There’s a risk that a substitute part will fail in the application.
3DP has the potential to eliminate these risks. An electronic component can literally be built from the ground up in the exact quantity a user needs. Think about how that will simplify the supply chain: no more last-run buys; no more obsolete inventory and no more open market. There is still the risk of component failure, but it’s less likely to be the result of a counterfeit part.
PwC, in a report on 3DP, said the technology could potentially make inroads in the after-market space, particularly for manufacturers of products with long lifecycles and a high demand for parts replacement. Beneficiaries could include industries such as aerospace, consumer appliances, electronics, transportation, power, utilities and energy. According to PwC, 70 percent of manufacturers believe that in the next 3 to 5 years 3DP will be used for obsolete parts, while 59 percent said it was likely the technology would be used for the production of after-market products.
While this will be a boon for equipment manufacturers and users, 3DP also has the potential to displace current members of the supply chain. The most disruptive effect, PwC found, is a restructured supply chain. The next effects, in order, are the threat to intellectual property; changed relationships with customers/end users; weakened economic viability of traditional high-volume production; increased competition for talent for 3DP; and a reduced need for transportation and logistics.
Those are pretty significant disruptions. As always, users of 3DP will have to weigh the cost advantages of adopting the technology against alienating long-term partners.
There are still a number of problems with 3DP including the cost of printers and the cost of materials. Also, component suppliers may have to share their schematics with customers that want to print a part. Not all materials are suitable for 3DP. It’s unclear where testing and quality control will reside. In fact, 47.2 percent of respondents to the PwC survey cite quality and their main concern with 3DP.
One of the scenarios in the PwC report doesn’t cut all existing partners out of the supply chain. Logistics companies such as UPS could act as a 3DP service provider, defraying the costs of 3DP across its customer base. They could also be called upon to deliver the components, and, of course, fix the printer. Unfortunately, that brings the printer-repair dilemma full circle: only a few specially trained people will know how to fix the thing.
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