How 3D printers will change the supply chain management in Industry 4.0 (please see updated version)

The 2nd International Conference on 4th Industrial Revolution
28th of February 2017
Diogo Quental
How 3D printers will
change the supply chain
management in 4th
industrial revolution

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Summary
1. What is 3D Printing
2. From Mass Production to Batch size 1
3. Massification of Mass Customization
4. Similar processes in other industries
5. Use Cases

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By doodlesplash.co.uk

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Evolution
It´s not a new technology...
The development started in the 1980s.
The exponential growth of 3DP, however, only started
recently when patents expiration triggered the use by the
open source community.
Evolved from “what can I print?” to “what can I not print?”

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Types
3 big groups of printers
• Desktop: < 3,000 EUR
• Professional: > 3,000 < 50,000 EUR
• Industrial: > 50,000 EUR

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Technologies
Several different technologies:
• FFF (Fused Filament Fabrication)

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Technologies
• SLA (Stereolithography)

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Technologies
• HP Multi Jet Fusion

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Technologies
• DLP (Digital Light Processing)
• SLS (Selective Laser Sintering)
• SLM (Selective Laser Melting)
• EBM (Electron Beam Melting)
• LOM (Laminated Object Manufacturing)
• …

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Advantages & Impacts
Rapid Prototyping
Now it´s possible to have a prototype in just
hours, instead of weeks or months.
(this will leverage the tech revolution and
contribute to substantial cost saving)

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Full geometrical freedom
Product design is no longer constrained by the
manufacturing process and can fully focus on
functionality, making unique shapes that could not be
produced in any other way.
The production of complex products without tools and
assembly is now possible.
(this will contribute to design revolution)

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Complexity Reduction
By replacing assembled parts with a 3D printed single component, the
manufacturing process can be simplified substantially.
(this will shorten the supply chain)

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Lower physical stocks
Stocks become mainly digital 3D model
files + raw materials.
(this will shorten the supply chain and
contribute to substantial cost saving)

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Resource Efficiency
3DP wastes less material, results in lower
wasted stocks, lower footprint and it can
enhance the full recycling of wasted
materials.
(this will contribute to ecological
manufacturing)

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Rapid Manufacturing
Today 3D Printing is already being used in manufacturing, which allows a
much faster time-to-market response.
(this will lead to demand-driven manufacturing)
Decentralization of Manufacturing
Manufacturing can take place closer to customers.
(this will shorten the supply chain)

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Difficulties
Slow process for large volume manufacturing
The traditional manufacturing processes will not disappear, but may be
combined with 3D Printing to increase efficiency
Material choices still limited
Not enough skilled people knowledgeable about the technology

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Stats
A PriceWaterhouseCoopers survey in 2015 to US
manufacturers in showed that:
• > 70% had adopted 3D Printing
• > 50% expected 3DP to be used for high-volume
production in the next 3-5 years
• > 20% predicted it will be disruptive on supply chains

2. From Mass
Production to
Batch size 1

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Mass Production is today still the common
approach to goods manufacturing.
Its main advantage is the production at a
low cost per unit, due to the economies of
scale.
In most situations, production is far from
the place of consumption, but the cost of
the transportation is outweighed by the low
cost of production.

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However, Mass Production has several disadvantages or risks:
• It is capital and energy intensive, so it´s not adequate for small or uncertain
markets
• It has a high set-up time, so it´s not good to respond to sudden demand
increases
• It has a complex supply chain, so there´s a higher risk of halting production
due to a missing component

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Image by: Bill Conerly, Forbes, “The Economics Of 3-D Printing: Opportunities”
It´s true that in 3D Printing the price per unit produced is higher than in
traditional manufacturing, but the tooling cost is zero and the time-to-market
is very short.
Therefore, in situation where:
• It´s important to test the market
• The market size is limited or
fully customization is required
• The financial capacity is limited
3D Printing can be the solution!

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In short,
3D Printing is particularly suitable for small runs,
that can be as small as a batch size 1.

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Example
End-of-product-life replacement parts
Thousands old cars are still on the road, and there is a demand for replacement parts.
Traditional manufacturing is too expensive to produce those parts.
3D printing can be the solution!

3. Massification
of Mass
Customization

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Despite the value added for customers, over the years
low prices of mass production pushed customized
products (usually hand-made) out of the market.
With 3D Printing, however, is now possible to
customize products at a low cost.
Because 3D printing utilizes a digital format, parts can be
completely different from one to the other and the cost
of changing them is very low.

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Products can now easily be made for just one
customer.
Instead of a one-size-fits-all approach, medical
devices, footwear and many other applications
will start being customized to fit an individual’s
anatomy.

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Mass customization by established industries is becoming a reality,
but there is another process running in parallel that we cause a strong impact:
• The beginning of Manufacturing as a Service (MaaS).
MaaS is the shared use of a networked manufacturing infrastructure to produce goods.

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MaaS:
• Can provide manufacturing solutions directly or close to the end-user
• Can provide the potential of large volume production of traditional manufacturing,
while making possible to provide a mass customised product
• Can disrupt the economies-of-scale model

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Example
UPS – 3D Printing service
“Custom solutions to meet your unique business needs.”
With this distributed, on-demand manufacturing network, UPS customers will be able to
get their products to market faster and more cost-effectively because parts can be
produced exactly in the quantity they need and when they need them.

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Mass Production Mass Customization
Distributed Manufacturing
Long supply chain Short supply chain
High rigidity of the manufacturing
process
High flexibility of the manufacturing
process
High market risk Low market risk
High investment Low investment
Slow development Fast development

4. Similar
processes in
other industries

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The Steel Making Industry
Source: adapted from “The Steel Making Industry”:
http://www.istc.illinois.edu/info/library_docs/manuals/primmetals/chapter2.htm
In the 1970s:
• High demand encouraged the
production of large quantities of steel
• Large steel mills with high capital
costs and limited flexibility were used

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The Steel Making Industry
In the 1980s and 1990s:
• Increased compliance requirements
and increased competition
• Steel makers were forced to reduce
expenses to remain competitive
• Just-in-time technology has become
more prominent and large steel plants
were partially replaced with smaller
plants, called mini-mills.

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Textile retailing: Marks & Spencer vs Zara
Zara
• High customization
• Low volume: new collections every 7 days
• Impressive performance
Marks & Spencer
• High standardization
• High volume

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5. Use Cases
3D printed car components for time and cost savings - Tucci Hot Rods
Source: Ultimaker

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5. Use Cases
Challenge
• Before 3D printing, Tucci Hot Rods would either fabricate custom aluminum or plastic
parts using laser cutting and CNC milling techniques, or create custom pieces by
hand.
• Both processes:
• expensive and time consuming;
• no way of ensuring that a newly-created piece would 100% fulfill its purpose.
Iterations may mean starting from scratch; wasting time and money.
Solution
• 3D printing has allowed the Tucci team to speed up and refine the entire production
process, from design and testing, through to production and post-processing.
• Tenfold savings have been made in producing test part iterations,
• … in turn, has encouraged greater creativity and raised production standards of
custom aftermarket car components.

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5. Use Cases

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5. Use Cases
Boeing: 20,000 3D printed parts used on Aircraft

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5. Use Cases
Boeing: 20,000 3D printed parts used on Aircraft
Source: Adapted from 3dprint.com - https://3dprint.com/49489/boeing-3d-print/
3D printing of replacement aircraft parts
• Instead of storing parts at their various hubs, or requiring parts to be shipped to them,
possibly causing extensive delays, the company can now just pull up a specific file for a
part that’s needed, and have it fabricated within minutes or hours in the nearest location
where they have a printer available.
• There are around 300 different aircraft production parts that are being 3D printed.
• It is estimated that there are over 20,000 parts currently being used on their aircraft (for
now, only parts that can be 3D printed out of plastics).

How 3D printers will change the supply chain management in Industry 4.0 (please see updated version)

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