In an article for Coindesk, Michael J. Casey, the chairman of CoinDesk’s advisory board who is also a senior advisor for blockchain research at MIT’s Digital Currency Initiative, wrote about the implications of blockchain technology for the supply chain. While several logistics companies are raving about how their industry will be disrupted for good, Casey points out another emerging technology that, if used in conjunction with blockchain technology, can restructure the industry even further:
“…the biggest change for global trade is yet to come,” he wrote. “That will be when the Internet of Things, 3D printing and other automating technologies finally free manufacturing from the constraints of geography. At that moment, blockchain technology could come into its own, enabling an entirely new paradigm of decentralized, on-demand production and forcing a realignment of global economic power.”
I’ve wondered about something similar. Several start-ups have taken it upon themselves to build new platforms for more efficient supply chain management through blockchain technology. Through these new systems, freight companies and shippers can directly coordinate shipments. But what if there is no need to ship anything overseas at all?
If 3D printers become so ubiquitous that even small businesses and even households have them, then manufacturing no longer has to be centralised. Instead of big factories that ship products overseas to meet demand, could the world shift to a decentralised network manufacturing system where accredited local producers can cater to local demand?
If product designers can charge for their design and have anyone within their network of accredited resellers “print” it overseas, close to where the orders are originating from, this could substantially cut down a lot of expenses stemming from shipping, handling, and cross-border fees while meeting demand significantly faster.
Additionally, with autonomous drone delivery becoming a common thing now, I wondered if that would add up
This could eliminate a lot of costs and wastes incurred by delivering products overseas, and offer a far more efficient supply chain system. Or would it really? I asked some industry experts what they thought of this.
I reached out to John Hauer, founder and CEO of Get3DSmart, whose company deals precisely with these kinds of possibilities—“identifying and capitalising on BIG opportunities with 3D printing.” And while my imagination goes to extremes at times, Hauer takes a more realistic assessment of my premises.
“First, while I believe 3D printing will [become] mainstream (already happening), I don’t believe that 3D printers in homes and small businesses will become ubiquitous. It’s far more likely that those individuals will pay someone else to print on their behalf. Even if 3D printers do become ubiquitous, they will account for a small amount of the total 3D print volume. For example consider 2D printing. Even though desktop inkjet printers have become nearly ubiquitous, they account for less than 10% of all print volume. The vast majority is printed for pay, by someone else,” Hauer wrote.
I also asked Paolo Velcich, CEO of Steezycam, Inc. who has spent a lot of time working on advanced autonomous drones. Similarly, he doesn’t think 3D printing is a one-size-fits-all solution, and that its use has its limits.
“Actually that’s already happening [3D printing becoming ubiquitous]. There are relevant case histories showing how much more convenient a 3D Printed part can be compared to custom made fixtures or short runs for special components. Some Industries are more interested than others. Consumer products appear to be far away from being affected by this revolution: quantities and overall finishing of the products are not compatible with the 3D Printing technology. Aerospace, Robotics, Dental and Medical, Composites, Oil & Gas are definitely already involved in Additive Manufacturing, with extremely positive results. The Fashion Industry is also exploring this technology with great interest. Finally, Architecture and Decoration are showing a huge interest on the matter, and there are already so many successful application, it’s definitely more than a trend,” Velcich wrote.
Velcich points out that consistency in output and quality control is one of the biggest challenges to this system, if it were to become common.
“All the above mentioned applications can work on a small scale (like an artisanal workshop) as well as a decentralized branch of a large corporation. The generation of the original 3D Model can be handled by corporate technical offices, made available on the cloud or forwarded by email (on demand), eventually incorporating critical updates and customization for the regional market/local application. The critical point in such a process, would be represented by the consistence of the final outcome. A strict QC and manufacturing process should be implemented, in order to ensure the proper quality to the locally printed parts. This is especially true for critical applications like Aerospace, Medical, Oil & Gas,” Velcich explains.
“As stated above, the currently available additive manufacturing processes could be easily decentralized and handled by smaller local factories. However, the critical factor remains the implementation of clear and strict Quality Standard (both on purchasing and handling raw materials as well on manufacturing the parts) and Quality Control Inspection on the final product.
The well established and seasoned manufacturing technologies usually offer a reasonably acceptable control on Quality Standards. A decentralized Additive Manufacturing process could be more prone to environmental and process variables. Leading to inconsistent products.”
Decentralised 3D printers a threat to big centralized factories?
So is the possibility of a network of decentralised “factories” a threat to the traditional, giant mass-production factories that have persevered for decades since the Industrial Revolution? Hauer doesn’t think so.
“3D printing will NOT replace manufacturing in the near or long term. They will be complimentary strategies. Typically, 3D printing will make more sense at the beginning of a product’s lifecycle, when demand is unknown, and at the end, when there is still some demand, but not enough to continue mass producing.”
Adding to his point on 3D printing as a complimenting strategy for traditional manufacturing, Hauer notes that manufacturers will still have a central point, but may be able to strategically position these centers closer to the consumers they cater to.
“Big companies will incorporate 3D printing into their workflows and utilize it when it makes sense (see drivers / benefits above). In some cases they will install 3D printers on their factory floors and utilize their existing supply chains (print centrally and deliver locally). In other cases, they will distribute manufacturing closer to the point of need (via networks of connected 3D printers), and then deliver locally,” Hauer explains.
“One of the big questions in the industry today is who will own those networks? Manufacturers, retailers, supply chain companies and dedicated service bureaus (print shops) are all options. Several big companies including Jabil, UPS, and Amazon are already building these capabilities.”
The question as to who will own these 3D printing networks is an interesting one—this could realign certain “responsibilities” within the supply chain and possibly open up an entirely new ecosystem. It may even point to the “new paradigm of decentralized, on-demand production” that would “force a realignment of global economic power” as Casey puts it. In fact, Hauer has also been pondering this, and has written an article about it.
Potential environmental impacts
With 3D printing becoming a powerful manufacturing ally, one of the biggest impacts I could see was environmental. Both Hauer and Velcich agree that the environmental benefits of integrating additive manufacturing into the traditional supply chain is quite promising.
“The environmental impact is undoubtably one of the most appealing factors in the application of decentralized additive manufacturing. By reducing the stocks, the packaging, eliminating most of shipping and handling, and dramatically reducing manufacturing and disposal waste, there will be a huge advantage from the environmental point of view,” Velcich says.
Hauer expounds on these advantages for manufacturers: “The biggest impact on the environment will be a reduction of inventory. Instead of manufacturing 100,000 of a product, packaging it, shipping it, warehousing it and redundantly storing it in hundreds of locations, they’ll manufacture in smaller batches and reorder based on demand. This greatly reduces risk for the product owner, but also reduces stress on the environment in instances when the product is unsuccessful and eventually gets liquidated or scrapped,” Hauer says.
Biggest risk apart from quality control: piracy
My email interviews to Hauer and Velcich were done separately. Yet their response, when I asked what they think the biggest risks were, point to the same thing: piracy. This has been a longstanding problem that has plagued traditional industries, and will continue to be a problem for the long foreseeable future.
“Again, most of the risks and dangers are related to the strict control required on the decentralized manufacturing. Any lack of control will lead to loss of standards, mechanical properties, functionality and even safety,” Velcich says. “Another potential risk could be constituted by unauthorized reproduction and use of critical parts. Where the design is critical or the product itself embeds potential hazards if unproperly handled or serviced. True that similar risks also exist on standard manufacturing and sales, however the new technology could make the counterfeit product virtually untraceable.”
“Intellectual property protection is probably the biggest risk. Producers will want to ensure their assets are protected, irregardless of where the product is manufactured,” Hauer says. He points out, however, that blockchain itself can play a significant role in solving the problem.
“Much work needs to be done on this front and blockchain could play a key role,” he says.
“As I mentioned in my article, blockchain could be used for licensing and payment (designs, products, etc.) but it will be used for “chain of custody” applications (medical, aerospace, and other regulated industries). Further ICO’s are a likely way to pay for investments in developing 3D printing production networks.”
“In either case licensing of designs is a challenge and intellectual property issues must be addressed. Most likely they will use closed systems where IP can be protected, vs. an open environment where anyone can grab a design and print it,” Hauer explains.
Hindrances to implementation
The 3D printing industry, although an interesting and quite exciting one still has a lot of evolving to do, particularly in terms of quality of output and the costs necessary to create a network of providers.
“There are several hindrances. First, the quality, speed, and cost of 3D printing needs to continue to improve. Second, there is significant cost to building out a network of connected 3D printers. Those who wish to build them will have to make massive investments with a longer-term vision of ROI,” Hauer says.
“But, if McKinsey is right, by 2025 as much as 5-10% of all products in relevant categories could be 3D printed. That would create a $500+ Billion market. Having a network to support that kind of volume would be very profitable. Finally, there is significant work involved in designing new products and converting existing products to enable 3D printing. In many cases digital versions of products don’t exist and must be reengineered.”
Velcich points out the same hindrances. “Decentralized or “redistributed” manufacturing has the potential to revolutionize the manufacturing approach, moving away from the Mass Production paradigm, delivering the required parts locally, timely and affordably, customized to/or by the end user and overcoming many of the challenges associated with manufacturing and distribution, dividing production across sites or geographic regions,” he says. “However, some advances in additive manufacturing technologies are still required. While accuracy is not real issue, reliability, consistency and finishing are still far from optimal. The availability and cost of the raw materials still represents a critical factor.”
Cecille de Jesus
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