Impact of Direct Digital Manufacturing on Supply Chains - Essay Example

?The Impact of Direct Digital Manufacturing on Supply Chains Direct Digital Manufacturing (DDM) is yet another example of changing paradigms in the world of technological innovations touching new heights. Serious doubts have been raised over the impact of DDM on logistics systems in the coming years. What is DDM? Different synonyms used for it are ‘rapid manufacturing’, ‘additive manufacturing’ or just ‘fabbing’, which indicates its relevance in different businesses, particularly worrisome has been its propagated impact on logistics industry. Eyebrows are getting raised over the potential of DDM in cutting the demand for logistics services, as products would be manufactured at the place of demand or use. Effect of DDM would be felt in all industry sectors for meeting urgent product needs, providing customized products and parts of products, which were earlier supplied in bulk through the logistics industry. The crucial question before the logistics businesses worldwide is whether DDM would affect the business of logistics industry for transporting goods from one location to another. Naturally future repercussions of the innovation in technology cannot be denied. When customized parts could be accessed from the local DDM in a cost-effective and faster way, who would like to order it through a logistics process? Possibility of getting parts supplied locally becomes more evident for implementing changes in the designs of products. Actually, the risk to logistics business is genuine because no company would like to pay airfreight for getting a part from abroad when it can be produced locally but the business of DDM depends on innovation in concepts; only genius is not enough. If an idea is good enough, it will take time in proto-typing. 3D printing also requires time to process a concept into a product. It would start a war-like environment for safeguarding intellectual property. Imitators and innovators, both would make attempts to present their products fast to the market (“3D Printing” par. 27). For getting competitive edge from the given scenario, only those companies would get the leverage that would plan a long-term marketing strategy without considering the profit factor. Delivery of products would demand accuracy of timing in taking the products to the customer locations (“3D Printing” par. 30). A look at the business growth of DDM can help in evaluating the potential of new technology sweeping the stakes of supply chains. Seeing the latest market trends on manufacturing solid products by 3Dprinters, business in additive manufacturing reached $1.2 billion in 2008 and the possibility is that it could double in size by 2015. For understanding the impact of DDM business on logistics, some crucial data analysis is mandatory such as 75% of the sale of 3D printers has been registered for producing common sort of products while the balanced sale of the 3D printers has been made for producing industrial products. With the approaching time, there would be increase in the sale of cheap 3D printers, which can be to the tune of 90% market as price depreciates and functionality improves of 3D printers. Demand of the DDM machine is increasing not only for model-making and rapid prototyping, but for all types of machines for producing finished products as well (“A factory on your desk” par. 4). The only difference between the industrial revolution of the 1800s and the seeming-revolution of the future is that the manufacturing industry won’t be able to get the benefit of economies of scale that comes with bulk production. Another difference would be seen in the distribution of capital, employment, and intellectual property, thus, indirectly affecting the logistics business as any impact on various industries would get reflected in logistics, affecting its business potential (“Print me a Stradavarius” par. 9). Have a look at the success story of a U.S. company. Seeing the current status of rapid manufacturing (RM) in the business of making invisible dental braces, U.S. based Invisalign Inc. uses RM to manufacture forming tools over which disposable, transparent dental braces are custom-manufactured in sets for various patients. This company has earned recognition worldwide in the dental-supply sector, earning $206 million in sales in less than five years (Reeves, “Rapid Manufacturing” par. 27). Traditional supply chains would undergo huge transformations with innumerable products being produced at a number of locations in stead of an individual site. This transformation would be led by both the capacity to create equilibrium between demand and supply between the ALM machines, and the economic, environmental, and social leverage of starting production nearer to the consumer or original equipment manufacturer (OEM) (Reeves, “Rapid Manufacturing,” par. 30). . This business model has huge potential, which is evident from the fact that one of the divisions of Reeves’ company is using it. It helps consumers in designing of the toys, as seen in the video games. Customers themselves place orders online to a company in the adjacent location, capable of producing a particular toy. It helps in cutting cost, lead time, and helping in environmental cause as well. There are other goods such as lamp shades and gifts being produced by following this business model. Time is the only limit when companies in other business sectors such as aerospace and automotive will also follow this methodology. The end result possibly would be a scenario wherein there would be innumerable small production locations, probably splintered around either niche supply chains or advanced materials (Reeves, “Rapid Manufacturing” par. 31). Research indicates that ALM technologies would expand to create comprehensive systems equipped with electronic, optical, and mechanical parts. This will additionally affect supply chains, discarding multistage manufacturing and drastically minimizing the role for transportation, inventory, and logistics functions (Reeves, “Rapid Manufacturing” par. 32). DDM in its various forms would affect the logistics business, the most enormous effect on the supply chains would be from low-cost home-based ALM systems. Aligned with the internet, the home-based ALM could totally disconnect with the traditional product supply chain. Users would download the purchased digital data for their home based production, making small purchases of raw material at their locations, which would most probably be delivered to them through parcel or couriers than by logistics services providers. RM is the real challenge for the logistics industry (Reeves, “Rapid Manufacturing” par. 33). An imaginative glimpse of the future year 2028 provides a practical view when highways and roads would look scanty with reduced trucking traffic, as the fabber of the new millennium would become a must for home equipment with the diminished cost of the new PC. It is predicted that the economic marvel would outshine the technology marvel with the positive news of the survival of logistics. Yes! The bulk cargo demand would catch up with the huge increase in the demand of granulate, plaster, starch, and polymer liquid. Other transporters would manage the pipeline network, supplying fabber raw materials into households on the lines of delivering water or gas pipelines, particularly in big cities. These pipeline remedies had been suggested by scientists and logistics service providers at the congress, “Future of Logistics“ in the summer of 2008 in Hannover. Supply chain management companies would enter into new arenas of distributing fabbing services as well. They would invest in fabbing parks, which can produce goods that are too complicated for the small household machines. New addition to the logistics business by smart logistics service providers would be made by marketing the licenses for the designing data of the fabbing products. Logistics business can enter into new markets of creating new product concepts themselves for the household fabber. The need is to creatively adjust to new situations of changing business perspectives. For that those logistics businesses who take the lead in changing their businesses as per the future needs by simulating the approaching time demands would succeed in any business environment by showing dynamic flexibility in their approach towards business (Jahns and Gracht, “The wonder weapon of logistics” par. 5). A logistics company can still get a competitive edge from the growth of DDM through innovation. Future-oriented logistics service providers can get the leverage from 3D printing by getting associated in conducting collaborative research with universities. It would provide them significant benefit against competitors in the development of a “fabbing supply chain.” This way, a logistics company could possibly help in fixing up pipelines which distribute the necessary raw materials for the fabbing procedures, or could manage specialized reverse logistics (Price Waterhouse Coopers 50). Having a look at the year 2030 projections of the PWC that 3D printing could affect logistics business by reducing supply chain worldwide because customers would be producing items of routine and other spare parts at their homes only or in decentralized small-scale factories, the estimated possibility (EP) of the above statement is 40%, Measures of Consensus (C) is 35, Impact (I) IS 3.5, AND Desirability (D) is 3.4 (Price Waterhouse Coopers 58). Logistics entrepreneurs should not dishearten from this projection, as it provides a positive view of the role of logistics in the changing business (Price Waterhouse Coopers 50). At the same time, they should remain resilient on the future of additive manufacturing (AM), which according to the press release of Wohler Associates, as shown in their 2009 Report that future of DDM is very bright, as is evident from a survey of the technology companies, stating that AM part manufacturing would form 35.9% of its total business in the 5 years and cross the 50.5% mark in 10 years (Press Release “Additive Manufacturing” par. 3). Yet, there could be some solace from the assumed fact that companies would be supplying their own parts and goods. There would be a new line of micro-manufacturers, getting the benefit at both ends of the fabbing process, creating new possibilities of outsourcing some products and making in-house some other products. Designs would play the decisive role in producing more generic items and machines, changing the division of labor paradigms, and, thus, impacting the supply chains (IFTF, “Supply Chains.” 1). Works Cited “A Factory on your Desk.” Technology Quarterly. 3 September 2009 . IFTF. “Manufacturing: Do It Yourself?” Supply Chain. 2007 . Jahns, Prof. Dr. Christopher. and Gracht, Dr. Heiko von der. “The Wonder Weapon of Logistics: When the Factory comes to the Living Room.” October 2008 . Press Release. “New Industry Report on Additive Manufacturing Finds Significant Growth Opportunities in Direct Part Production.” 4 May 2009. Price Waterhouse Coopers. “Transportation & Logistics 2030: Volume 1: How will Supply Chains Evolve in an Energy-constrained, Low-carbon World?” . “Print me a Stadavarius.” The Economist. 10th February 2011 . Reeves, Phil. “How Rapid Manufacturing could Transform Supply Chains.” Supply Chain. 2008 (4) . “The Printed World.” The Economist. 10th February 2011 . Read More