Is the 3D printer the better spare parts warehouse?

When I talked about the industrial application of additive manufacturing in the past, I often focused on advantages like rapid prototyping, shortened time-to-market, optimization of designs, freedom of engineering, and improvements in product performance. Today I’d like to discuss another very exciting use case: Using AM to reduce inventory. Is the 3D printer the better spare parts warehouse?

To answer that question, one first needs to understand the challenges with the current practice of warehousing spare parts in many industries. Whether your company provides energy infrastructure solutions such as turbines and generators like we at Siemens Energy do, or other industrial machinery or vehicles, you usually guarantee spare parts availability for many years and keeping them on stock for both planned and unplanned component replacements. For larger companies, the value of these spare parts quickly amounts to hundreds of millions, and this capital is tied up and unavailable for other purposes such as product upgrades or innovation. Other disadvantages are that physical storage costs money and parts can also become obsolete when they are no longer needed.

Possibilities and limitations

Should you now replace your inventory of spare parts with 3D printers? In some industries, this vision of near-complete virtual inventory may become a reality in a few years, reducing inventory to an absolute minimum. In companies like ours, which manufacture extremely complex and large machines which operate for decades, this “zero inventories” vision might be a few more years out. Nevertheless, we see great potential to optimize our supply chains and improve cash flow by using AM in our spare parts business already today.

Around 25% of our spare parts at Siemens Energy can benefit from the use of Additive Manufacturing. Utilizing an AM supply chain can significantly reduce the overall supply chain lead time through part consolidation and elimination of non-value add machining steps. If a part is virtually inventoried, it can be reproduced indefinitely, even in 20 or 30 years' time, without the need for maintaining cost-intensive toolings available in the supply base. Since parts can be 3D printed in smaller lot sizes, lead times in production can be significantly reduced. Spare parts can thus be reproduced at shorter replenishment times. This would enable us to significantly reduce our inventory and improve inventory turns. Of course, the availability of qualified printers in our supply base becomes a limiting factor in producing parts on demand and will require an optimization of production utilization vs. the advantages of on-demand printing. 

Do you already use Additive Manufacturing for inventory reduction or have you thought about this option?