It has long been said that 3D printing is capable of revolutionizing logistics. Despite this, the technology was arguably overshadowed in 2020 by the wave of supply chain digitisation sparked by the pandemic. The huge potential of 3D printing nonetheless remains, and the technology is still on course for a key role in the supply chains of the future.
With this in mind, we caught up with Len Pannett of Visagio, 3D printing expert and author of “Supercharg3d: How 3D Printing Will Drive Your Supply Chain”, to find out about how 3D printing can best be utilised, how the technology is developing and how it may be deployed in the future.
Hi Len, thanks for taking the time to talk to us. 2020 was one hell of a disruptive year for the logistics industry, albeit due to challenging and unwelcome circumstances. Looking back, what are your thoughts on how the logistics industry reacted to the challenges presented by the pandemic?
Well, I see you used the word ‘disruptive’, and 2020 was definitely that. What it [COVID-19] did was it accelerated a lot of the change and disruption that had been seen before.
Even before COVID hit, we were already seeing the beginnings of the effects of the trade wars between the US and China, we were seeing the uncertainty from Brexit kicking in, we were also seeing the questioning of globalization.
Then, when production in China started flattening because of COVID, that had a downstream effect on supply chains. And once COVID hit the European and American areas, as well as the rest of the world, we also saw demand being struck. So, unlike all of the other disruptions we’ve had in the last few decades, from Fukushima to SARS and MERS, this one was unusual in that it affected not just supply, but demand as well. It changed the way everybody works too, in that we all had to start working from home.
All of that together did three things. First of all, it meant that everybody had to change their priorities. Initially, most companies concentrated on ensuring that their people were safe, their customers were safe and their suppliers were safe. They then provided them with the tools to at least talk to each other and get communication going. The second priority was meeting the customer needs as far as possible. So there was a lot of prioritization for that up and down the value chain. And then the third one was cost reduction; looking at cash flow, trying to free up as much cash as possible, trying to cut costs as much as possible and open new revenue streams as quickly as possible.
All of that together had a catalyzing effect. To begin with, it put digital transformation squarely in the middle of what everybody did on an individual level. Although we’d already been on a wave of transformation that’d gone back 10 years, during which companies went through digitization, digitalization and then transformation, the first lockdowns from March to June changed the entire way in which all of us use technology.
“Zoom” suddenly became a verb, rather than a backwater company. We started seeing Amazon being the means of getting things, not just for home shopping but for businesses as well. And companies that had been very traditional in how they sell actually started getting onto e-commerce channels a lot more quickly than they had been planning to.
In addition to that, companies were generally starting to bring in tools to be able to do things on a shared basis, whether it was Microsoft Teams, Google Docs, or other workflow solutions. At the same time, they sought to bring in digital tools to automate what they were doing and bring in digital assistance to help them do business and transact their operations; this all happened very quickly.
From a supply chain perspective, the other thing it did was it put “the supply chain” squarely in the middle of everybody’s problem set: we now had a situation where we didn’t know what demand was going to be, where forecast models were completely wrong, all of the underlying assumptions before casting had been thrown out of the window.
At the same time, operating models quickly became superseded by the needs placed on them, and resolving supply chain issues became very dynamic. We saw this first hand when supermarkets suddenly faced a run on products – toilet paper being the headline grabber.
Interestingly, food manufacturers largely continued their output at the same levels. Working with their supermarket clients, they changed resupply and restock patterns, ensuring that shelves were not empty despite the shift in buying patterns, and they succeeded in doing that very, very quickly.
I think there were a number of success stories from 2020, and the way in which the food supply chain stepped up, changing its operating models and policies from farm to fork, one of those.
The other huge challenge came in healthcare, where we saw a huge spike in demand for all manner of PPE and for ventilators, both of which became a manufacturing and a supply chain issue. Then 3D printing started to play a role, helping to solve many of those issues in both. This served to realise many of the promises about 3D printing’s capabilities and how it could help supply chains. At the same time, it also exposed some of the constraints of the technology and its use.
Looking forward to 2021, it looks like vaccine distribution and Brexit will be two of the biggest challenges to be overcome. Do you see it that way?
I do, although both are relatively transitory matters from a supply chain perspective. The vaccine distribution plans in each country will probably be the most complex and extensive logistics plans they’ve ever implemented. However, we have known for many months that the challenge would have to be faced so planning has been underway for a while now. Furthermore, we now have several vaccines and some will be manufactured close to our shores and others further away. Of course, once we have the bulk of the population inoculated, then the vaccine programme becomes just like any other pharmaceutical production and distribution.
Now, given the planning and wider supplier base, you would think that the most relaxed person in the world right now would be the project manager in charge of those logistics plans. However, as all project managers know, no plan survives contact with the enemy, despite the best risk management, so this will be an intensive, complex problem throughout 2021, one that consumes resources, facilities and logistics across the globe.
On the other matter, Brexit will be a significant issue for the UK and EU countries in the short term as they are forced to adapt to the terms of the agreement that was signed in December 2020. There are new bureaucratic procedures to be followed, new restrictions to be worked through and those will result in more overheads and costs to operations. Those will naturally reshape supply chains, and the processes and tools that they use, this year and next. There will also be several changes to supply chain models to reduce risk and costs.
There will also be longer term, strategic changes because the UK will have a different role in sourcing and logistics, and those will also come at a cost. Even before 2020, many European companies were already moving their procurement base away from the UK in anticipation of possible barriers. The new trade deal implements many non-tariff barriers between the UK and the EU, and that will have an impact on UK manufacturers and logistics as the country will no longer be viewed as a convenient point of entry into the EU.
Rotterdam port saw this change coming and invested in the improvement of its infrastructure, processes and tools, with the result that they will handle much of the volumes that would have arrived into the EU via the UK. Similarly, ports in southern Ireland have seen increases in volumes that they are handling.
More widely, though, 2021 will see a shift in where supply chain resilience fits into agendas. From the outset of the pandemic’s disruption, it has been clear that supply chains would have to change to cope with the uncertainty over the near future, and that means increasing resilience in the supply chain network and in the inventory distributed throughout those. We have seen some companies already go down that route, looking at nearshoring or reshoring some of their supply chain, such as by moving manufacturing away from China to somewhere closer to their operations.
Now, while some manufacturing and logistics will stay in China and India – the benefits that they bring cannot be ignored – we saw companies splintering some of that into parts of Southeast Asia, Eastern Europe and Latin America.
This trend shouldn’t be a surprise: the call for resilience in supply chains has been perennial following every major downturn for decades. Historically, although firms make gestures towards increasing it in the immediate aftermath, those quickly die away as they are deemed not essential. What makes this time different is that the impact hit everyone and all parts of the value chain. At the same time, companies have now seen that they can react quickly if necessary, provided they have the right culture and the right strategic goals, and that the continuity of supply chains is now essential for survival.
The other trend that has been interesting to see not only keep its place, but grow in prominence, is sustainability. Firstly, there is a clear overlap between resilience and sustainability: both seek to shorten and simplify supply chains. Both look to reduce consumption of materials, energy and water, and both drive towards less waste. In parallel, there is far greater awareness of the impacts of a lack of sustainability in consumers. However, there has also been a shift in the financial investment where ESG – environment, sustainability and governance – are core factors. The result of those is that sustainability is now not only on the agenda for board meetings, but increasingly a determining factor for how supply chains are designed and operate. For instance, several FMCG companies make sure that they have traceability and visibility systems in operation, and that they can eliminate and mitigate social risks. What we are seeing now is a greater focus by supply chains on how to quantify their ESG impacts, such as their carbon footprints, in order to then control and reduce those.
Back in March 2019, you published your book on how 3D printing will drive the supply chains of the future. A year later though, the pandemic kicked in, and a series of revolutionary changes emerged in the logistics industry, mainly in the areas of digitalisation and automation. Has 3D printing gone under the radar during this time?
At its heart, 3D printing is a manufacturing process so when supply and demand hit manufacturers, the demand for 3D printers dropped. However, there was a huge change in the use of 3D printers driven by the needs for PPE and ventilators. We saw companies redirect their 3D printing capacity virtually overnight and even 3D printing hobbyists turned their machines to produce parts for visors. Producing PPE is fairly straightforward: most is plastic and the designs are relatively simple, so “approved” designs were made available for their distributed manufacture. Similarly, the colossal, successful efforts to design and build ventilators was accelerated by using industrial 3D printers, leveraging the expertise in producing high spec, quality items in companies such as Airbus, Rolls-Royce and Renishaw to create prototypes, have them certified by the medical authorities and then serially manufacture parts much faster than would be possible using traditional techniques.
What this did was to demonstrate most vividly that the promises of 3D printing were not empty, that the technology can produce items with simple and more complex designs, and that it can do so with far shorter end-to-end times that would be possible using traditional manufacturing. It also showed the flexibility of 3D printers, shifting what they were producing from one design to another seamlessly, without the need for retooling.
At the same time, it showed some of the constraints of the technologies, such as the challenges of quality assurance of serial items using 3D printing and questions around intellectual property of 3D printed parts. For instance, a small team of Italian engineers who used a 3D printer to produce out-of-stock, critical parts for ventilators were initially sued by the original manufacturer of those parts (although the case was dropped following an international outcry). The issue of IP, of how to deal with trademarks and patents of existing items that are 3D printed, is unresolved.
Nonetheless, the successful use of 3D printing has shifted the understanding of what it can do and this is now changing its perception in supply chains. Firms across sectors, from oil & gas to consumer goods manufacturers, are today turning to 3D printing as a means to reduce risk and cost in their supply chains, such as by using its on-demand characteristics to produce spare parts, reducing lead times, stockouts and obsolescence.
In what kind of situation does it make sense for a business to invest in a 3D printer for the purposes of their supply chain?
There isn’t one clear answer. 3D printing certainly has several benefits to value chains; it can produce items with complex designs as it can simple ones. It can produce items with a variety of designs in a series run just as easy as if all had the same form. It can shorten lead times for parts, reduce extraneous procurement, lower obsolescence and eliminate waste in supply chains. Put those together and this can result in lower physical inventories, reduced needs for warehousing and shorter logistics chains. Companies such as DiManEx in the Netherlands are helping firms to do just that by providing an end-to-end digital supply chain with 3D printing at its heart.
Moreover, the flexibility of 3D printing means that it has applications throughout the value chain, from developing prototypes, producing parts for use in manufacturing processes to making finished goods. This means that conceivably any company that uses equipment might have a case for 3D printed items. Recent experience has shown that a good place to start is in producing spare parts for equipment and manufacturing tools, including for mass manufacture such as injection moulding.
However, 3D printing is no Star Trek replicator, able to produce anything at the touch of a button. First, 3D printing is actually a range of different technologies, each aimed at producing items in a small number of similar materials, and we are a long way from a single industrial 3D printer being able to produce items reliably in more than one material type. Second, 3D printed items very rarely come off a machine all ready for use. In the vast majority of cases – particularly for industrial parts – there is a need for post-processing, such as heating, finishing or coating, and that takes time and effort; in some cases, the post-processing represents the bulk of the time to produce an item. Third, 3D printing requires specialist skills, from designers who are trained in producing the necessary design files to engineers and technicians who can set up, maintain and repair 3D printers. There are many others, as I wrote in the book.
The hardest question to answer is “where do I use 3D printing”? Companies may design many items, or use many items of equipment which employ several spare parts. Identifying which to produce and replace with 3D printing is rarely clear, given the many physical, financial and supply chain factors that will affect the business case for using those technologies. Even once parts have been identified as suitable, the question of how to have them 3D printed needs to be answered. Should the company buy or lease their own 3D printers and if so which? With machines costing anywhere from several thousand to a few millions of dollars, those are really big considerations. Also, where will the companies obtain the necessary design skills to produce the necessary design files.
Recently, we have seen the emergence of companies and consortia of firms to help with this. For instance, Visagio and DiManEx have joined forces to help firms to identify the parts in their materials databases for which there is a case to 3D print. DiManEx then provides the necessary engineering design skills to render the needed design files, and it has on hand a constellation of approved partners who between them have the multitude of 3D printers across the globe to produce the items and ship them to the end customer. 3D printing OEMs, such as HP, Renishaw, 3D Systems and Stratasys, also offer similar services, albeit with more restrictions on the range of technologies available.
Those solutions give companies of all sizes access to 3D printing “on demand” and with low risk. They provide companies with the means to demonstrate 3D printing’s capabilities in their supply chains and a platform to scale the initial proofs of concept. Ultimately, that model gives firms a means of digitizing their inventory, producing what they need – and only what they need – when they need it, virtually at the push of a button.
Technological change typically generates winners and losers. Should 3D printing take off in a big way as expected, who will ultimately stand to win or lose?
That’s a very good question. We’re never going to get to the point where 3D printing is used for everything. 3D printing is a manufacturing tool and there are certain situations when it makes sense to use a 3D printer. At the same time, there are situations where it’s just as valid to use other digital manufacturing techniques, such as CNC milling. There will always be situations where the volumes being manufactured call for injection molding. There will always be a need for traditional manufacturing somewhere in value chains.
What we’re seeing now, though, is a change of where it makes sense to use one particular approach over another. 3D printing is always advancing, improving the precision, accuracy and tolerances that it is capable of delivering, and reducing the speed of production, incorporating post-production in a single system. The variety of materials that can be 3D printed is increasing and the software needed to design items for 3D printers is becoming more joined-up and more user-friendly. This means that 3D printing is becoming more relevant as a manufacturing solution.
3D printing OEM may well see an opportunity to sell more machines to companies, although I expect that there will be a need for them to adopt capital equipment leasing models given the pace of technology development and the constraints that a single machine has. This shouldn’t be a surprise; we saw similar sorts of things with the photocopying world in the 80s and 90s. That shift will also lead to a change in OEM’s revenue models, with a greater focus on aftermarket services. In some cases, we may well see OEM’s customers acquire the OEM to secure the technology for themselves as a competitive differentiator, something we have seen firms such as GE do.
On the other hand, service-based companies, such as those providing 3D printing capabilities “as-a-service”, are likely to flourish given their low-risk, low-cost benefits.
Now, will this shift have an impact on the demand for logistics? I don’t think so, certainly not in the short and medium terms. Although 3D printing is a story of some 20% growth year-on-year for nearly two decades, it still represents only a very small percentage of all manufactured items. What we will see are logistics companies that recognise the opportunity 3D printing brings and which seek to be part of the ecosystem, offering 3D printing services directly and indirectly. For instance, the joint venture Fast Radius between a 3D printing company and UPS allows its customers to send designs to its 3D printing factories and have the finished items shipped on UPS’s package network the next day.
I also see supply chains as a winner, as their spare parts inventories get increasingly digitised, as lead times for replacements are reduced, as stockouts are minimised and as waste, over-procurement and obsolescence are reduced. Already, auto manufacturers pressing ahead with models that use 3D printing for their service centers, and firms such as Volvo and Mercedes Benz use 3D printers as part of their aftermarket offerings. The ability to produce items with optimised designs – another benefit of 3D printing – will also affect the sustainability of assets in many sectors. For example, using 3D printed parts on aircraft reduces their weight which lowers their fuel consumption, resulting in lower emissions. Over the lifetime of a single plane, those can soon add up to a mammoth saving, both in financial and CO2 terms.
And finally, just side-stepping for a bit – I noticed you spent some time working on a submarine for the Royal Navy. One would assume that your job looks very different now. That said, did you find that there were a number of transferable skills you could take with you from the Navy into the logistics industry?
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Indeed, there were. I suppose that foremost was the ability to adapt to changing conditions quickly, something that was only possible by preparation. In the Navy, you train, train and train, developing skills, knowledge and experience. The needs of the logistics industry also call for this agility and flexibility, coping with changing requirements and conditions.
Another aspect that is very transferrable is developing the understanding of how the team works and how to work with the team, something that the last year has shown to be a critical capability in logistics. Each person on a submarine – from the captain to the chef – undergoes the same qualification on each of the systems, values and switches so that we can all rely on each other when things don’t go according to plan. In the logistics space, it is vital that every part of the chain understands what each other part does, needs and why that is so, so that they can respond quickly and effectively, and that extends across into the other parts of the supply chain, within and between companies. The last 25 years have shown that those firms that have closer relationships between their supply chain functions and between themselves, their suppliers and customers, are the ones that succeed. Those are the supply chains that perform better, faster and produce better results for their customers.
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