Supply Chain for 3D Printed Parts– the Good, the Bad, and the Unexpected

3D Printing, or Additive Manufacturing (AM), has many implications for the supply chain. It’s often claimed that with AM, you can move to virtual inventory and save many supply chain costs. While this is mostly true, it’s not so cut and dried. AM, as the name implies, produces parts one layer at a time, on demand and with a minimum batch size of 1. Let’s try to break this sentence down to its components and see the various implications it has for the supply chain when AM is involved.

Minimum batch size of one
With a minimum batch size of one there is no need for physical inventory – the inventory can be virtual, maintained as a digital file rather than product on a shelf. This has two implications: first inventory costs go way down (virtual inventory is much cheaper than physical inventory) – that’s a very good thing.

Second, the manufacturing step is further down the line in the chain. This also has a good side: Parts are always up to date (the customer will always get the most up to date part) and there is no obsolescence and no more write-offs. However, there are also some associated risks with this strategy: Usually when a part reaches physical inventory it has passed a (potentially certified) production line and quality assurance. If a part was faulty is was already removed before it could reach the physical inventory.

With virtual inventory, on the other hand, the production comes after the inventory and there is still a risk of inconsistency of parts. It’s important to make sure that consistency is enforced and strictly adhered to, even though each item is produced separately, at different times and potentially at various locations (more on that below). This is a new concern for the supply chain executive but it’s well worth dealing with in order to enjoy the cost savings and other benefits of AM.

One layer at a time
The nature of AM means that more complex geometries such as the photo below can be produced than in any other manufacturing technology.

That implies that whole assemblies can be produced at once, saving on the need to assemble multiple parts – a simplification of the supply chain. Instead of several parts from multiple suppliers you have a single assembly. GE, for example, has replaced 855 parts in its new turboprop with 12 assemblies that are 3D printed in metal. That is certainly fewer SKUs to handle at the very least…

On Demand
AM can produce parts on demand – meaning that the parts are produced as they are ordered, not in advance. Ideally the parts are also produced close to where they are heading. This cuts down on delivery costs and on the time it takes the get it to the customer (compared to using AM in a central location only). That’s great. But, producing in multiple locations increases the risk to consistency and it’s harder to stay in control when more and more locations have AM capabilities. These are risks that need to be mitigated before a corporation can adopt AM in production and enjoy all its benefits.

Where’s the Unexpected?
Now we come to something that few people are speaking of in this industry: AM doesn’t just simplify the supply chain, it also complicates it.

The complication comes in the input and the output. The input is the raw materials supply chain. With traditional central manufacturing, the raw materials are ordered and delivered in bulk to a central location where they are stored and managed.

With distributed additive manufacturing, raw materials need to be distributed to many locations and each location will need smaller quantities. Multiple locations now need facilities to store and manage raw materials. Does the company itself buy in bulk and distribute to the various locations? Will the suppliers deliver to all the various locations? Are there external companies that this task can be outsourced to?What’s the cost of all of this?

The same is true for the output: The logistics and delivery at the end of the process is different in this case than in the central manufacturing and inventory case. One possibility is to take this complicated process (from multiple locations to many destinations in a timely manner) and outsource it to logistics companies whose bread and butter is to do just that. In some cases, the logistics company might even be able to do the AM part.

All in all, AM offers multiple benefits for supply chains, especially in lowering its overall costs. However, there are less discussed challenges that come with these benefits that merit thought and solutions.

Lee-Bath Nelson is co-founder and Vice President - business at LEO Lane, an Israel-based business that empowers industrial manufacturers to securely manage additive manufacturing, anywhere anytime, using the company’s cloud-based SaaS solution.