Another tool in the supply chain toolbox, on-demand additive manufacturing promises lower inventories and costs, plus less waste.
The inability to perfectly correlate demand with supply has been a key riddle for supply chains and logistics throughout history. Too much product is a glut. Too little is a scarcity.
Striking a balance is hard, so suppliers use sophisticated algorithms to take their best shot at how much of their products will be needed at a certain time and a certain place to meet an uncertain demand. Couple that with the need to produce products in large quantities to achieve economies of scale and the issue is exacerbated.
To deal with this, suppliers produce products in large quantities in low labor cost countries, ship and store those products near their customers, hoping that their demand projections turn out to be accurate. This projection is always imperfect, especially considering that the value of inventory in the United States alone was $1.8 trillion in 2015, according to the U.S. Department of Commerce. Assuming an inventory carrying cost of 25 percent, that’s $450 million U.S. companies pay each year to hold that inventory.