3D Printing and the Next Big Shift in the Global Supply Chain Network

Guest Post By Dr. Mindy Perot, faculty member at American Public University

3-D printing is another term for additive manufacturing, an emerging technology utilized to fabricate items in a layer-by-layer process. This is the exact opposite to the conventional machining, forging, molding, and casting processes that exist in today’s manufacturing operations. This technology will influence logistics and supply chain operations, causing the next big shift in the global supply chain network.

Currently, the technology is limited to prototyping, customization, and production of small volume items because of the expense and time required to facilitate the process. However, as we have seen with all predecessors, prices will come down and processes will become faster, allowing for an economically feasible and higher volume capability.

Impact on Logistics and Supply Chain Operations

Waste Elimination–The newer technology prevents the scrap and waste that the traditional subtractive and reductive processes create while still maintaining the lean and quality advantages of conventional processes. 

Reduced and New Inventory Requirements–The ability to produce an item at the point of need significantly reduces the requirement to hold inventory. In addition, items in inventory would become gases and raw materials in the forms of powder, requiring different and reduced warehousing requirements.

Different Relationships with Suppliers and Retailers–The tiers of component suppliers may not be required because the manufacturing process of all items could take place in a single facility. Orders could be placed by the customer, fulfilled directly by the manufacturer, and shipped direct from the manufacturer to the customer—eliminating the need for intermediate retailers

Expanded Flexibility–The capability offers more flexibility when it comes to customization and shorter lead times. Traditional manufacturing processes focus on standardization and achievement of economies of scale to gain efficiencies. The new capability leans more toward economies of scope instead of economies of scale in manufacturing processes.

Reduced Transportation Costs–Products are often lighter in weight, which could cause changes in transportation systems. Manufacturing locations could change because products that were once produced at another location to take advantage of low cost labor and/or raw materials and tiered suppliers could now be near-sourced reducing the shipping volumes and requirements and vastly changing shipment profiles.

Reduced Carbon Footprint–In addition to the reduction in waste, 3-D printing requires less energy to facilitate the manufacturing processes.

Challenges of 3-D Printing

There are challenges associated with 3-D printing such as regulatory and policy barriers, challenges with safety considerations of products manufactured and the shipment and storage of the raw materials, potential issues associated with patents and how digital files would be maintained and exchanged, and more environmental considerations and restrictions on materials.

“In 2012, President Obama called for the creation of a National Network for Manufacturing Innovation (NNMI), consisting of regional hubs to accelerate development, scale-up, and adoption of cutting edge manufacturing technologies” ( Additive Manufacturing Portal). Further in Aug. 2012, the National Additive Manufacturing Innovation Institute was established and in Oct. 2013 it announced its new identity, America Makes.

As more senior level emphasis and research and development are applied to the application of 3-D printing, the closer it becomes to a reality. Some have predicted that it will take less than 10 years for this capability to be widely implemented.

About the Author

Dr. Mindy Perot teaches courses in transportation and logistics management as adjunct faculty for American Public University and in a full time capacity serves as a Course Director at the Army Logistics University. Prior to this, Dr. Perot worked on the business side supporting pursuits to improve logistics and supply chain operations for the Army. Her research interests include logistics, supply chains, leadership, and adult education.

 

Reflecting on Supply Chain Education

Guest post by Dr. Stacey Little, Program Director, Transportation & Logistics Management at American Public University

New technologies, teaching soft skills, learning to deal with uncertainty, and international considerations are all issues that are affecting the way that we are educating people in the logistics profession. I recently had an opportunity to discuss these issues and the skills needed for supply chain graduates for the just-released  February 2015 cover story in Inbound Logistics.

The article provides insight from directors of college and university programs in logistics and supply chain management into the growing list of competencies employers are looking for in graduates.  As I read all of the thoughts contributed to the article, it is clear to me that as important technology is to logistics and supply chain success, we should not dismiss the significance of communication, negotiation, and relationship building through face to face interaction. Employers are looking for graduates who possess both hard and soft skills.

Read the article: “Today's Supply Chain Education: It's All in Your Head.”

The Impact of Crumbling Infrastructures

Guest Post By Brenda Rector and Tommy Rector, Faculty Members, Transportation and Logistics Management at American Public University

When we think of the transportation and logistics industry, the first thing that comes to mind are the trucks and terminals with millions of parcels being sorted, shipped, and received. The challenge of this vision for industry professionals is that consumer expectations are that items ordered should be received minutes later.

This is a society of now. Customers order an item and log into tracking systems immediately to get the status of the order. Delivery via next day and second day shipping methods has become the norm.

There will come a time when customers will not be able to get the item overnight or second day delivery because the delivery systems have no additional capacity. What will happen when this occurs? The transportation and logistics industry could possibly implode by trying to deliver an undeliverable product.

When an item is ordered from the customer’s favorite outlet, especially at the last moment, there is little thought to what that last minute purchase does to the industry as a whole. Each day, the industry handles millions of packages that hit thousands of supply management systems with great accuracy. A small number of them that do not reach the expected destination on time but, when the data is studied, the percentage is negligible.

Customers generally do not realize how difficult and delicate the logistics and transportation industry truly can be. Think about a typical item being ordered such as  a sweater or a wine rack. The item is ordered Monday night on the company’s website. At that precise second, a purchase order is electronically sent to the warehouse to have the item pulled from the shelf, tagged, boxed, and sent to shipping for release. Within hours, a carrier arrives at the warehouse to pick up the item. This is where the unbelievable part of the ordering process begins.

The item will be scanned into a hand held device that communicates via radio signals with the home office. Information is sent to the carrier about the item such as: item description, hazardous material information, the shipper, the receiver, package type and weight, and the required delivery date (RDD), to name a few. The customer gets updates through the shipper’s website.

If the item is next day or second day, this is where the miracle of logistics and transportation happens. The items are carried to the terminal and divided into RDDs, called broking in the industry. For the next day and second day parcels, they are loaded onto another trailer or put on an aircraft. Within hours, the item is received at the local terminal, placed on the delivery truck, placed out for delivery, and delivered to the customer’s door.       

Many companies, such as DHL, FedEx, UPS, and USPS offer guaranteed delivery times and a discount. Some offer a full refund if the items are not received by the time specified by the shipper at the time of the order. 

All of this demand means that the infrastructure of logistics and transportation is crumbing under its own weight. We are sure to see many innovations to turn this around, among them incentives to entice consumers to purchase items with more lead time. 

About the Authors

Brenda Rector is an adjunct professor and Tommy Rector is an assistant professor, both for the Transportation and Logistics Management Program at American Public University. They have been in the military and civilian transportation and logistics industry for nearly 30 years. They are in the dissertation phase of their doctorate programs.