The global pandemic, severe weather events or new legislations such as the Supply Chain Act – in the face of continuing risks and rising demands, companies in the manufacturing sector are increasingly looking for approaches to supply chain optimization. New opportunities to make supply chains more cost-efficient and sustainable whilst keeping the risks low are being opened up by 3D printing processes, also known as additive manufacturing. The innovative technology promises greater agility, resilience and independence from global supply chains, while providing a more positive carbon footprint. We explain how it can be applied and discuss the benefits it offers.
What is additive manufacturing all about?
Additive manufacturing (AM) refers to 3D printing processes that are used in an industrial context. The two most important process groups are plastic printing (polymer printing) and metal printing. The main areas of application are diverse and include, for example:
- Rapid Manufacturing: the mature and serial production of additive end products (parts or spare parts).
- Rapid Prototyping: the production of prototypes within the framework of product development
- Rapid Tooling: the production of highly specialized tools and designs with high requirements for precision and execution
- Rapid Repair: the repair of damaged tools and other objects
In contrast to subtractive manufacturing, the workpiece is not manufactured by removing material, but by applying material layer by layer. This allows the production of highly complex structures coupled with design freedom and a high degree of individuality away from standardized products. For the supply chain, there are even more advantages that the use of additive manufacturing offers.
The potential: reducing risks while increasing sustainability and flexibility
Supply bottlenecks are and remain a constant challenge for companies worldwide. The German industrial sector has recognized additive manufacturing as an effective means of minimizing negative effects – this is confirmed by a quite recent Bitkom study conducted in 2021. For the study, 551 industrial companies with more than 100 employees have been surveyed on the topic of 3D printing. More than one in three (38 percent) cited additive manufacturing as an effective protection against supply chain disruptions, and four out of ten companies (44 percent) are already using it, with greater flexibility being the most important benefit for 43 percent of respondents. So, what’s behind this successful trend?
Advantages of additive manufacturing for the supply chain
Additive manufacturing offers numerous advantages with regard to the optimization of supply chains in terms of cost, sustainability and risk management:
- Reduction of risks: Instead of outsourcing various manufacturing processes to other companies, additive manufacturing allows companies to increase their vertical integration, drastically shorten the supply chain and thus reduce the risks of global production and supply processes. For example, supply bottlenecks can be avoided, as printed parts can be produced on demand in hours instead of weeks. Further, temporary peaks in demand can be cushioned much better. Thus, supply chain agility increases significantly. This, on the other hand, reduces the need for safety stocks – a definite plus in terms of efficiency and profitability.
- Cost reduction in storage, production and transport: If excess inventory is avoided, this does not only save storage space and significantly reduces the costs, but it also lowers the risk of obsolescence. For example, instead of having to order large quantities of spare parts that may not be sold due to minimum order quantities, companies produce only the parts they actually need. Advanced production methods minimize material waste and thus disposal costs. Transport costs can also be reduced if spare parts do not have to be imported from overseas, but are produced locally.
- Increase of sustainability: Thanks to shortened supply chains, additive manufacturing ensures a significantly more positive environmental balance. Likewise, the material consumption and energy efficiency are significantly better than it is the case with subtractive manufacturing. Further, overproduction rates and unnecessary warehousing can be considerably lowered through print-on-demand models. By shortening transport routes, CO2 emissions in the supply chain can also be reduced.
- Enabling nearshoring: Companies outsource production processes to sometimes far-flung regions of the world – above all Asia – primarily for cost reasons. Even if Eastern European countries or Portugal are now emerging as good alternatives, manufacturing and labor costs in Europe are still not in line with competitiveness on the global market. Manufacturing processes using 3D printing open up new possibilities through highly automated, digitally supported and material-saving production.
Alternatives to additive manufacturing in the supply chain
However, the advantages of additive manufacturing cannot always be used. Many products are simply not suitable for 3D printing. For some others, manufacturing in this way would be uneconomical. A vehicle, for example, could in principle be manufactured using additive manufacturing, but this would hardly be feasible and would not make much sense due to the large number of different components.
Other effective tools for optimization include:
- Supply chain management: A well thought-out supply chain management ensures transparent and specifically controllable supply chain processes. This means, for example, that costs, expertise and supply security can be optimally managed.
- Diversification and supplier management: A broader supplier network and efficient supplier management can help to reduce costs and risks whilst also increasing the efficiency.
- Risk management and business intelligence (BI) tools as well as digitally supported supply chain risk management and sustainability management can help to set up supply chain processes in a future-oriented and competitive manner.