In today’s global economy, e-commerce sales are increasing at a rapid clip, transforming the way products and goods are moved through the global supply chain. Retailers and manufacturers aim to deliver goods to customers in ways that are both fast and cheap, but doing so can come at the expense of the company.
E-commerce sales are expected to surpass $520 billion by 2020, and with this increased economic activity comes added strain to retailers and manufacturers.
“As people turn to the web to purchase lighter-weight, less-expensive goods, and do so more frequently, the supply chain extends right to the mailbox,” says Rick Rover, senior vice president of operations for Streamlite, an Atlanta-based shipping solutions company, in an interview with Supply Chain Digital.
There is one potential solution for manufacturers that want to reduce the cost of “the last mile,” the movement of goods from a fulfillment center to the final destination: 3-D printing.
According to a new report by CBRE Research, implementing 3-D printing in the global supply chain can improve flexibility, quality and cost. It can keep price-per-unit low, help companies meet demand in real time when long lead times are expensive, eliminate costs associated with import and export fees and manufacture parts wherever and whenever they’re needed.
Printing the Future in 3-D
Also known as “additive manufacturing,” 3-D printing is a process that produces solid objects using computer-aided design (or CAD). These printers build 3-D objects by adding layer-upon-layer of materials like plastic, metal or concrete.
Although CBRE estimates that 3-D printed manufactured goods only represent 1 percent of all manufactured products in the United States, the technology is experiencing “staggering growth” and has the potential “to significantly disrupt the manufacturing sector in the short term.”
The opportunity for 3-D printing’s global growth lies in parts production, according to a joint report by UPS and the Consumer Technology Association (CTA). Today, the use of 3-D printing for parts production makes up 43 percent of global 3-D-printed product and service revenue (at an estimated value of $1.8 billion), according to UPS and CTA.
The global 3-D printing market is on pace to exceed $21 billion by 2020, according to UPS and CTA, especially in China and the U.S.
This is a market ripe for disruption.
“This is a market ripe for disruption. Technology adopters that move beyond prototyping to use 3-D printing in supporting and streamlining production can achieve new manufacturing efficiencies,” notes the UPS and CTA report.
“It’s probably the most advanced and the most mature of the technologies that we’ve talked about (in the report), but it’s also the one that’s had the least impact at the moment,” says David Egan, Americas head of industrial research for CBRE.
The challenge right now is for companies to figure out how to work it into the context of an existing supply chain. Companies like Hasbro, Hershey’s and GE have started to offer 3-D printed goods, although the impact 3-D printing has had on these companies’ respective supply chains is unclear.
3-D Printing: Can You Hear it Now?
For those who want to get a glimpse into how much of an impact 3-D-printed goods can have in the world of manufacturing and distribution, look no further than hearing aids, says Matthew Walaszek, a senior research analyst at CBRE.
There were an estimated 15 million 3-D printed hearing aids in circulation in 2013, according to Deloitte. Smartphone manufacturers are also using 3-D printing to build hardware and internal parts.
3-D printing is only going to evolve and high-tech and healthcare are going to be the industries most likely to be impacted.
“While I think 3-D printed-products are still a development, 3-D printing is only going to evolve and high-tech and healthcare are going to be the industries most likely to be impacted,” says Walaszek.
The impact 3-D printing will have on the industrial real estate market is unlikely to be dramatic, according to CBRE Research. There is the possibility that 3-D printing will transform last-mile delivery points into production locations, which could mean fewer large site locations.
“To me, the promise of 3-D printing is where you can take part of the supply chain, put it in one room and then distribute 3-D-produced goods to a very densely populated metro area that has limited industrial space,” says Egan.
In a metro market like Manhattan where industrial warehouse space is limited, manufacturers and distributors can use 3-D printing to their advantage.
“Imagine if you were able to take a point of production and move that to an office building and then take, receive, make and distribute all of the products out of that building to wherever you needed to go in Manhattan?” asks Egan.
“That’s the supply chain problem and solution all right there, but it hasn’t happened yet,” he adds.