A hallmark of the Fourth Industrial Revolution (4IR) is the convergence of the digital and physical worlds, which is in turn blurring traditional boundaries throughout the value chain.
3D printing, for example, can help companies meet the growing consumer demand for product personalization. The fashion brand Ministry of Supply now uses scanning and 3D printing in its stores to create sweaters mapped to an individual’s thermal profile, in under 90 minutes.
Of course, this is just one example. The scope of the changes now underway are too vast to be recounted here. Rather, this article points to a specific business model innovation – 4IR Production Platforms – that can help players across the value chain adapt to and prosper in the Fourth Industrial Revolution using the power of digital technologies.
The manufacturing industry has always been directly impacted by the technological advancements of its time. From the advent of coal and steam as new sources of energy, the cotton gin and its impact on cloth manufacturers, and the assembly line for Ford, each has altered and benefitted the industry. As we enter Industry 4.0, a new batch of technology is shaping how, and how fast, we make goods. 3D printing is one such technology that is providing tangible benefits to those who implement it.
Desktop 3D printing, where users can design and print right at their desks or on the factory floor, has seen tremendous growth in the past several years, moving from strictly prototyping to actual production. The technology has opened huge possibilities for manufacturers, including quicker time to market, a reduction in costs, and an overall improvement in factory productivity
Trade shows and conferences are time- and energy-intensive expeditions often requiring significant travel and expense. The best events prove their worth in bringing together the people who make an industry and the decision-makers who drive it — and in additive manufacturing, Germany is proving to be a destination of note each November.
Frankfurt drew 26,919 visitors and 632 exhibitors to the 2018 edition of formnext last week, perhaps the largest event on the calendar in additive manufacturing. With 49% international attendees and exhibitors representing 32 countries, formnext serves not only to provide some of the finest networking opportunities in this young industry but to act as a bellwether of some of the strongest trends in additive technologies. At this year’s edition — 25% larger than in 2017 but with 37,231 square meters of floor space already dwarfed by the 58,000 square meters announced for 2019 — formnext showcased an important trend in and of itself: additive manufacturing is big business.
This is the second of a two-part conversation with Gary Gereffi, director of the Global Value Chain Center at Duke University, on the future of global supply chains. In the first piece, we looked at the impact that protectionism is having on global value chains. Today, we focus on the impact of technology and the changing U.S.-China relationship.
BRINK: You’ve talked about how we should be thinking of value chains and supply chains in regional rather than global terms. Why?
Gary Gereffi: In complex industries, no single country has the capabilities to produce all of the parts of a product. If you take something like an automobile that has about 20,000 parts, the most efficient industries are actually set up on a regional basis. For example, the U.S. automobile industry is really a North American industry, where U.S. companies are very tightly intertwined with suppliers in Mexico, Canada and even Central America to form a regional supply chain that can produce a very large share of the components needed.
FACTORIES, THE CHIEF innovation of the industrial revolution, are cathedrals of productivity, built to shelter specialized processes and enforce the division of labor.
Adam Smith, who illuminated their function on the first page of The Wealth of Nations, offered the celebrated example of a pin factory: “I have a seen a small manufactory… where ten men only were employed, and where some of them consequently performed two or three distinct operations. [They] could make among them upwards of forty-eight thousand pins a day… Separately and independently… they certainly could not each of them have made twenty, perhaps not one pin a day.”
But the benefits of factories suggest their limitations. They are not reprogrammable: To make different products, a factory must retool with different machines. Thus, the first product shipped is much more expensive than the next million, and innovation is hobbled by the need for capital expenditure and is never rapid. More, specialization compels multinational businesses to circle the globe with supply chains and warehouses, because goods must be shipped and stored.
The Dutch multinational banking and financial services corporation ING did a study last year that predicted that the mass adoption of cheap, high-speed 3D printing could decrease global trade by as much as 25%.
The reason given was that it would cut down production time and reduce the needs for imports.
However, a Harvard Business Review article in 2015 suggested that 3D printing works best in areas where customization is key, for applications such as printing hearing aids and dental implants.
In one of Wolfgang Lehmacher’s World Economic Forum articles, co-written with Martin Schwemmer of Supply Chain Services SCS, they argue that 3D-printing based production will bring factories closer to customers and products faster to the markets.
Nevertheless, it still has its restrictions.
Manufacturers are missing the board perspective on 3D printing. They need to completely reconsider their manufacturing processes.
3D printing technology has been around for decades, mostly used for creating prototypes. Advances in the technology have allowed 3D printing to morph into additive manufacturing (AM). When making one-offs or spare parts, 3D printing becomes a simple alternative to machining or molded parts. However, everything changes when it comes to production manufacturing. AM becomes a disruptive technology when you can print a single assembly that was previously 15 separate parts.
“The vast majority of those working with 3D printing still don’t see it in a broad enough perspective. They take this component or part that they’ve made for years, and say, ‘What would it take to 3D print it?’ It takes more time and money, and so they say this doesn’t work for us,” Jack Heslin, president and VP of business development at 3DTechTalks and Lazarus3D, told Design News. “But they’re not redesigning their manufacturing to take advantage of 3D printing. If they do, they might find that what was 100 parts will be 10 parts or less. That will affect their time-to-market, their accounting, their cost, everything.”
According to Gartner, 3D printing has great potential. Total spending is predicted to grow at a 66.5% CAGR to $17.7 billion in 2020 with over 6.5 million printer sales. Gartner also predicts that “by 2020, 75% of manufacturing operations worldwide will use 3D-printed tools, jigs and fixtures made in-house or by a service bureau to produce finished goods. Also, 3D printing will reduce new product introduction timelines by 25%.” Enterprise 3D printer shipments is also expected to grow 57.4% CAGR through 2020.
The top priorities related to 3D printing include accelerated product development, offering customized products and limited series and increasing production flexibility. Here are additional 3D printing market forecasts:
- 57% of all 3D printing work done is in the first phases of the new product development
- 55% companies predict they will be spending more in 3D printing services and solutions in 2017
- 47% of companies surveyed have seen a greater ROI on their 3D printing investments in 2017 compared to 2016
The manufacturing industry could be transformed by 3-D printing, but business owners don’t understand the technology, slowing its adoption, according to Adrian Keppler, CEO of industrial technology services player EOS.
“People don’t understand it, and they have a hard time understanding what it means for their business,” he told CNBC’s “The Rundown” on Thursday.
The 3-D technology allows the construction of lightweight parts — a feature that Keppler said could benefit vehicle makers in particular as the auto industry shifts toward electrification, and as more regulators impose emission limits.
3D printing leads the way toward a more innovative future. Here are some areas of life that are seeing a lot more benefit from 3D printers than others.
Recently, a company in San Francisco announced it could 3D print an entire house in just 24 hours. The startup called Apis Cor used a mobile 3D printer to build a 400-square-foot house in the middle of a Russian town. While 3D printing isn’t necessarily a new invention, the developments of additive manufacturing continue to wow us and show a future that may be more efficient. It could even be able to solve large-scale problems. So where are some of the areas that 3D printing can provide innovation? Here are five of the biggest sectors that have the most to gain from 3D printing.