Will 3D printing disrupt Asia's dominance in manufacturing?
Prosthetic arms, bicycles, airplane interiors, robotic birds, shoes, homes – all sorts of different items across myriad industries are being manufactured by 3D printing. While not yet mainstream, this technology is extremely helpful for small-scale projects or creating specialized components. People have even tried to 3D print food – yikes! Ambitious projections for the growth of this market abound. For example, IDTechEx forecasts that the global 3D printing materials market will reach 16 billion USD by 2028, and IDC predicts 28.9 billion USD in 3D printing revenues by 2020.
One company leading the way is Carbon, a Silicon Valley-based 3D manufacturer, and a few weeks ago I had the opportunity to tour their facilities. I was impressed to learn more about their technology and processes and to see that they’re already starting to 3D manufacture items at mass scale (including the midsoles for Adidas shoes as well as various dental, automotive, and industrial components).
The question that came to my mind during the tour was “How will this technology impact procurement and the broader supply chain?” The answer could have far-reaching consequences that transform how businesses operate.
As 3D printing becomes more widely adopted, one can imagine a world where, instead of procuring raw materials, companies will source “designs” from suppliers – and then either have their own 3D printers or find a local resource to print the part.
From a procurement perspective, companies will need to learn how to pay for the intellectual property (IP) of the designs, not the physical goods, and determine where to get the raw materials for printing. In this scenario, companies may not have to pre-order and stock inventory, but rather do just-in-time printing on an as-needed basis. It will also simplify logistics, since companies won’t have to deal with the long-distance transportation of the goods and products – enhancing their ability to maintain a lean supply chain.
The lure of cost savings established Asia’s initial stronghold in manufacturing, an advantage solidified over time by the ecosystem of primary, secondary, and tertiary suppliers that make this region such a tightly knit manufacturing community (similar to how the entrepreneurial ecosystem in Silicon Valley helps to breed and fuel new entrepreneurs). With 3D printing, that existing ecosystem becomes less relevant, since new communities of partners/suppliers will be required.
Will this lead to an opportunity for local companies to disrupt the dominance of Asian manufacturing?
As we look to the future, the manufacturing world that appears so solid today may shapeshift into something markedly different, upending existing economic structures and replacing them with new ones. One day soon, we may even see drones crisscrossing the sky as they deliver 3D printed parts to buyers from local suppliers. And with the potential for volatility looming large, technology partners who can help companies respond effectively to sweeping change – through intelligent procurement, global network access to millions of qualified suppliers, and innovative solutions that support end-to-end insight and agility – will become increasingly crucial to business success.
Interested in exploring the impact of emerging technologies on your business? Check out Revolutionizing Procurement’s User Experience with AI to see how the way we consume information and interact with our business systems is primed for a significant change.