Economic Growth

Will 3D printing kill the supply chain?

Yossi Sheffi
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Economic Growth?
The Big Picture
Explore and monitor how Innovation is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Innovation

The additive manufacturing revolution is underway, and product supply chains lie directly in its path of creative destruction. Which ones, if any, will survive?

In additive manufacturing – also known as 3D printing – a computer-controlled laser melts materials such as plastic or a mixture of alloys according to a blueprint that is programmed into the machine. An object is made by building up ultra-thin layers of the material one by one.

The technology reduces waste to a minimum because material is added (hence the term “additive”) in the precise quantities needed to make an item. In addition, additive manufacturing is incredibly flexible both in terms of the type of object that can be manufactured and where the process takes place.

Some supply chains will become obsolete as a result of this flexibility. For example, 3D printers in auto repair shops and retail outlets could make certain auto components on site, eliminating the need for these items to be delivered by suppliers. Many expedited shipments will not be necessary as the technology matures. When a production line goes down, for instance, the part needed to fix the problem might have to be shipped from a far-away supplier using expensive same-day delivery services. Being able to simply print the part in situ avoids this costly transportation option.

Scenarios like these do not auger well for express delivery companies. But the news is not all bad because alternative business opportunities will open up. Delivering the raw materials that feed 3D printers is one such possibility.

Customization offers another example of how the technology will close some doors and open others in the supply chain domain.

3D printing makes it much easier to tailor products to customer needs, even down to the individual level. By tweaking the computerized blueprint and maybe altering the mix of materials, manufacturers can produce a limitless number of design variations.

The result of this newfound versatility is likely to trigger a dramatic increase in the number of product SKUs, which adds complexity and, hence, cost to supply chains. This will pose a major challenge for companies.

On the other hand, 3D printers are smaller and more compact than traditional manufacturing installations, and require fewer and less-skilled operators. As a result, they can be closer to consumer locations. This close proximity to markets, coupled with the short lead times made possible by 3D technology, shortens supply chains and reduces the need for large inventories. Service levels can be improved since additive manufacturing is ideally suited to just-in-time operations.

Moreover, these are only the possibilities that we can imagine at this early stage of the technology’s evolution.

Imagine global networks of additive manufacturing machines that are attuned to local markets and can be reconfigured in real time as demand patterns change. Such a network would take supply chain agility to new levels. Or distribution centres that store and supply product blueprints rather than physical products, located “in the cloud” or on server farms.

Of course, the world can be altered further if home-based 3D printing becomes the norm. In this world, every home is equipped with a printer capable of making most of the products it needs. Supply chains that support the flow of products and parts to consumers will vanish, to be replaced by supply chains of raw material.

It’s a compelling vision, but a long way off. Even assuming that consumers want to become micro-manufacturing centres, the technology is many years away from such mass market applications.

Meanwhile, 3D printing is a disruptive technology that will destroy many traditional manufacturing models. But reports that the concept of a supply chain will die at the hands of additive manufacturing are exaggerated.

3D printing is one of the subjects covered in the Outlook on the Logistics & Supply Chain Industry 2013 by the Global Agenda Council on Logistics & Supply Chains.

Author: Yossi Sheffi is Elisha Gray II Professor of Engineering Systems at the Massachusetts Institute of Technology (MIT). He is also a Member of the Global Agenda Council on Logistics & Supply Chains.

Image: A 3D printing machine is seen in California REUTERS/Robert Galbraith.

 

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Economic GrowthFinancial and Monetary SystemsJobs and the Future of Work
Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

A decade of slow growth? The World Bank’s chief economist on the global economic outlook

Linda Lacina and Ian Shine

September 25, 2024

About us

Engage with us

  • Sign in
  • Partner with us
  • Become a member
  • Sign up for our press releases
  • Subscribe to our newsletters
  • Contact us

Quick links

Language editions

Privacy Policy & Terms of Service

Sitemap

© 2024 World Economic Forum