New Straits Times
October 4, 2017
Three-dimensional (3-D) printing makes 3-D objects from a digital file and is quickly moving from the automotive, aerospace and medical sectors to other applications, such as fashion, construction and food.
Numerous research studies predict that between 2040 and 2060, about half of all products will be produced by 3-D printers, shrinking global trade by an estimated 25%. According to these studies, mass production and long-distance shipping will decline. How will this impact the logistics sector?
Digitalization of commerce will allow customized production of goods that are lighter and with minimal waste through the adoption of 3-D printing. 3-D printing enables “made to order” production closer to market, massively cutting transport costs. This could mean you only need to move raw materials and 3-D print cartridges around the world instead of facilitating the current crisscross of global trade of consumer and industrial products.
However, you will still need raw materials, along with textiles, leather and products made from mixed materials.
3-D printing will certainly reduce trade and, more specifically, container volumes, which will directly affect shipping lines, ports, and logistics service providers (LSPs). In this scenario, the race for larger container vessels and container ports will be hit.
3-D printing will impact the entire logistics sector, and in particular leading transshipment hubs in Asia, such as Hong Kong, Singapore, and Malaysia.
Many of the goods that are currently mass-produced will continue to be mass-produced, but customized goods (a fast-increasing market share) will be produced through 3-D printing.
Manufacturing will move towards a more hybrid model of manufacturing, where customized production through 3-D printing can be outsourced. Manufacturers will be able to minimize inventories in their supply chains.
3-D printing offers the possibility of moving production closer to consumer markets. This not only brings downs transportation miles, but also reduces supply chain costs, supply chain lead-times, and variability in supply chains. Storage of replacement parts for tools and machines will not be needed anymore, as these can be printed on demand.
The United States army, for example, already use 3-D printers to print surgical instruments and protective masks directly in war zones.
3-D printing fundamentally changes supply chain structures and redefines supply chain relationships between the manufacturer, wholesaler and retailer. This provides an opportunity for the LSPs to expand their role upstream to manufacturing and supply management, as well as downstream to wholesale. Li & Fung is already strong in sourcing and trading. UPS and DHL, on the other hand, have just started with 3-D pilot projects.
LSPs need to rethink their role in the supply chain, and adjust their business and operations models accordingly.
LSPs will become the outsource partner of brand owners, not only in transportation, storage and value added logistics, but also in manufacturing. LSP warehouses will become the factories of the future, much bigger in size, facilitating 3-D printing for various brand owners, and using solar energy.
In last-mile distribution, collaboration models will be pivotal to ensure effective consolidation of shipments and better optimizing truckloads. This new generations of LSPs are not necessarily involved in last-mile distribution, which can best be left to city distribution experts.
The writer is founder and CEO of LBB International, the logistics consulting and research firm that specializes in agri-food supply chains, industrial logistics and third-party logistics. LBB provides logistics diagnostics, supply chain design and solutions and market research in Asia, Europe and the Middle East.
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