How does AM impact supply chain complexity?

Supply Chain Management

How does AM impact supply chain complexity?

By: Justin Hollenbeck 

July 30, 2020

In bringing a product to market, 3D printing has long been suited as an ideal prototyping technology. 3D printing can quickly create relatively complex parts without breaking the bank. Recent improvements to its technology allowed 3D printing to compete with traditional methods in manufacturing end-use products, giving rise to a new 3D printing term, “additive manufacturing” (AM). 

The benefits of additive manufacturing are appreciated, with early adopters in many industries looking to harness design freedom, low costs, fast lead times, and material-use efficiencies enabled by AM machines to gain a competitive edge in their markets. Moreover, many current limitations associated to part finish quality, material availability, and production repeatability are expected to be overcome soon. 

However, many manufacturers are hesitant to jump in, as uncertainties around supply chain management persist. Specifically, how will AM technology impact supply chain complexity? 

Supply chain complexity refers to the number of dependencies between components of a supply chain network. The supply chain network aims to transform a company’s raw goods into the final product in a way that maximizes value to its customer, and it is typically composed of many highly interdependent components. Importantly, complexity added to even one component may severely disrupt the entire supply chain and significantly diminish a company’s bottom line. Thus, supply chain managers are often looking to reduce complexity in their network. 

This complexity can be added by downstream drivers (e.g. number of customers, customer differences, product life cycle changes, or demand changes), upstream drivers (e.g. number of suppliers, supplier lead times), and process manufacturing drivers (e.g. number of parts, low-volume production, schedule changes). When implemented in a supply chain, additive manufacturing can reduce or add to any one of these drivers. Knowing when or how to implement AM technology within the supply chain can help a company significantly simplify their supply chain and improve product value to their customers.  

How does implementing AM create supply chain complexity? 

Any additional component to a supply chain innately creates complexity. AM implementation requires: 

  1. Proper sourcing of AM material. 

Materials for additive manufacturing are being developed at an extraordinary rate, and the options today are limitless. Traditional polymer-based materials (flexible, durable, dissolvable) have been adapted for AM use, development of AM composite materials has improved part strength and stiffness, and biocompatible materials have allowed for the design of implantable parts for the medical community. Even material availability in the metal AM space have been significantly expanded with advancements into using common metal wire as an additive material. 

Keep in mind, expanded material options doesn’t necessarily translate into supply dependability, as more novel AM material options often lack a robust sourcing network compared to more established materials. Moreover, many AM machine manufacturers employ a closed-source business model, which means that customers of their machines must purchase their (often limited) material options. This can reduce material options and constrict the supply chain. 

  1. Experienced AM employees and sub-contractors to be hired. 

As AM advancement accelerates, so does the demand for the proper expertise. More and more additive manufacturing technologies are being developed and brought to market every year, and each one has its own challenges and subtle tricks that typically take years to develop. Yes, there are overlapping regions of expertise between AM technologies (e.g. FDM and LMD technologies), but recruiting the right employee or subcontractor who knows the inner workings of a specific AM technology can be challenging, and thus can impart a not insignificant load onto a supply chain. 

  1. Appropriate AM machinery to be purchased and maintained. 

Choosing the AM technology that fits your company’s manufacturing goals and business model can be challenging. The catalog of AM machinery on the market is variable and is growing quickly, each one with its list of service and maintenance requirements. Be sure that the machine’s maintenance schedule and required maintenance expertise does not impart a significant cost to the supply chain of your company. 

How does implementing AM simplify a supply chain? 

  1. AM consolidates parts and eliminates processes. 

With traditional manufacturing, a complex part is subdivided into simpler components as governed by their manufacturability (e.g. sheet metal and machined parts). Each component is manufactured or sourced independently then assembled into the final part. This process alone may require multiple independent suppliers, skilled employees, maintenance requirements, and additional capital, which increases opportunities for quality error instances. 

AM maintains product quality and simplifies the supply chain by enabling the part to be created as one unit. This capability consolidates the number of parts needed for a product and eliminates redundant or unnecessary processes (or employees) in the supply chain. Part consolidation in this way is the essence of vertical integration, the concept Elon Musk touts for the successes of SpaceX and Tesla. 

  1. AM enables traditional manufacturing tools to be created in-house. 

The initial tooling step (e.g. mold for injection molding process) required for traditional manufacturing processes is often time-consuming and expensive, and many traditional manufacturers will hire independent contractors to provide tooling services. Companies looking to leverage economies of scale are best suited to employ these traditional manufacturing processes, but only if the design is not expected to change.  

If companies expect their design to change during the manufacturing process (e.g. just-in-time manufacturing), utilizing AM in-house enables companies to create custom tooling in house. This capability eliminates the number of suppliers needed and reduces supplier lead time, ultimately simplifying the supply chain and expanding design freedom for the company.  

  1. AM leverages economics of low volume manufacture. 

In a similar way, companies whose products are low-volume and of high design variability (e.g. customizable parts, patient-specific parts) are also disadvantaged by time-consuming and expensive tooling processes. With its ability to create high-quality, end-use parts, AM enables parts of different designs to be produced quickly and affordably, which ultimately eliminates supply chain processes and reduces inventory demands in just-in-time manufacturing processes. 

  1. AM adds value to specific industries reduces buy-to-fly ratios 

The buy-to-fly ratio is the weight of the raw material purchased to the weight of the final part. In traditional (subtractive) manufacturing techniques most raw material is machined away to produce the final part, resulting in significant material waste. Thus, traditional methods require large amounts of raw material to be sourced, which places a strain on the upstream supply chain network. 

AM optimizes buy-to-fly ratios by only manufacturing with the material that is needed to produce the final part. Indeed, hybrid manufacturing, a method that combines additive and subtractive manufacturing, only needs slightly more material than the final part requires. A lower raw material requirement reduces demand for raw material sourcing, alleviating the upstream components of the supply chain.  

How do I determine if I should implement AM in my supply network? 

There are more opportunities to simplify than to complexify a supply chain network by implementing AM technology. 

  • Map out what your supply chain would look like if it used traditional methods, and map out what your supply chain would look like if it used additive manufacturing methods. In analyzing the complexity of these chain, consider all upstream, downstream, and product manufacturing drivers. 
  • Weigh the simplifications that AM technology provides against the complexities that it introduces.  
  • Explore implementation possibilities within their entire network. AM technology introduced to one segment of the supply chain might yield a greater simplification/complexity ratio than other segments. 

  • Finally, take a more holistic view of AM technology and the value it provides to your company’s bottom line. 

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