How 3D Printing Is Impacting Supply Chains

29 May 2024

While three-dimensional (3D) printing — also known as additive manufacturing — has been a staple in hobbyists’ lives for years, its popularity in industrial applications is rapidly rising. As more companies leverage it, its impact on logistics becomes clear. Will this technology permanently affect supply chains?

The Role of 3D Printing in Supply Chains

3D printing’s primary role in supply chains revolves around manufacturing. Many manufacturers use it for small-batch or custom orders because of its fast turnaround time. Its popularity in warehousing and distribution is rising, too, since it’s a relatively versatile technology. Logistics companies use it to bridge the gap between the digital and physical worlds.

While many people associate 3D printing products and services with do-it-yourself projects and fun, worthless trinkets, it’s not just for consumers. In the logistics sector, its penetration rate is high — which isn’t surprising, given its global market value is set to reach $35.6 billion in 2024, achieving a compound annual growth rate of 22.5% from 2020 to 2024.

Since this technology can accelerate typical production and backend processes, it has become a large part of logistics. Already, 74% of supply chain companies report spending $5-$10 million on additive manufacturing technology, and another 18% spend up to $50 million. As its penetration rate increases and investments grow, decision-makers will uncover new use cases.

How Logistics Companies Can Use This Technology

Manufacturers use 3D printing to shift from mass production to on-demand. For example, medical equipment manufacturers use it to craft tailor-made prosthetics. Some facilities have established local hubs where they produce, assemble, and ship products from decentralized centers instead of relying on distributors to distribute from one central location.

3D printers use filaments, powders, resins, or liquids to turn a computer-aided design (CAD) file stored in the cloud or on an on-premises data storage system into a finished product. Manufacturers use industrial versions for large-scale, custom-built, or small-batch projects.

In warehousing, workers can use 3D printers to make safety equipment like hard hats, disposable gloves, or ergonomic inserts to make material handling less risky. They’ve been introduced into most personal protective equipment domains because they’re fast, accurate, and require no human contact.

Distributors are also using this technology to improve communication and shorten shipping times. For example, they can use it to make visual aids displaying their building’s layout or network’s flow. They can also use it for packaging and inserts to reduce the likelihood of product damage during distribution.

While manufacturers use 3D printing the most — and, arguably, have the most significant impact — warehouse workers and distributors also utilize it. Even though it’s not as pervasive in those areas, its presence is still impactful.

The Pros of Using 3D Printing in Logistics

Logistics companies using additive manufacturing benefit from reduced lead times — meaning they shorten the time between the beginning and end of a process. Manufacturers produce goods sooner, and warehouse workers cut unexpected downtime short by replacing parts faster. This high-efficiency approach is built for on-demand production.

Another pro is waste reduction — modern printers use material precisely. If any excess is left over, it can be reused in future projects. On top of being cost-effective, it’s also sustainable. Research shows it could reduce supply chain carbon emissions because it’s less energy-intensive than traditional manufacturing processes.

3D printing is an affordable alternative to many standard logistics tools. For example, it can optimize tooling and retooling — which accounts for up to 93.5% of manufacturing expenses — by producing molds, equipment, gear, and fixtures for production. Its cost-saving effects extend to warehousing and distribution.

Warehouses save on inventory space and carrying costs since their “parts” are CAD files stored in the cloud and printed immediately on-site. Distributors spend less on transportation because decentralized facilities require shorter trips. If they use 3D-printed packaging and inserts custom-fit to specific products, they may receive fewer damage-related returns.

The Cons of Using 3D Printing in Logistics

Many decision-makers are unfamiliar with the implications of adopting new technology. They often misjudge its ripple effects, not considering how those outside their department might be affected. If they don’t understand how to integrate it seamlessly — or why they’re utilizing it in the first place — their efforts could lead to failure.

Another one of 3D printing’s biggest cons is the upfront investment cost. While the average hobbyist can get a printer for a few hundred dollars, industrial-grade versions are more expensive. They start at about $5,000 and reach hundreds of thousands of dollars. If manufacturers want enough to meet demand, they have to pay up.

While a potentially multi-million dollar investment might seem doable to outsiders without knowledge of the sector, the reality is different. According to the Small Business Administration, 99% of all manufacturing enterprises in the U.S. are small manufacturers.

The approximately 600,000 small manufacturers make $1 trillion in gross revenue, so they each walk away with roughly $1,700,000 annually — meaning the commitment to additive manufacturing technology is a monumental decision. Investing in multiple machines could adversely affect their long-term resiliency and growth.

Data breaches are another concern. Bad actors could reverse engineer designs or hack cloud platforms to steal intellectual property, making CAD files free for public use. Consequently, hobbyists could produce or distribute homemade copies, significantly impacting sales. The downside of adopting user-friendly technology is that it may be too accessible to consumers.

How 3D Printing Technology Impacts Supply Chains

3D printing has several major impacts on supply chains, each with unique implications.

1. Increases Resiliency Against Upstream Disruptions

About 47% of supply chain leaders agree they’re vulnerable to upstream disruption, with most naming rising material costs, customers’ timing expectations, and rising freight expenses as leading challenges. 3D printing technology’s cost-effectiveness and rapid production rate could resolve these pain points, making logistics companies more resilient.

2. Requires a Comprehensive Shift to Decentralization

While decentralized production isn’t the norm yet, it’s quickly catching on. For it to take off, companies would need to switch to a decentralized logistics network, cutting out most distribution centers and centralized warehouses. Local production, assembly, and delivery hubs would make large parts of the existing supply chain infrastructure obsolete.

3. Reduces Lead Times and Accelerates Time to Market

Manufacturers, warehouses, and distributors can use this technology to streamline production and reduce downtime, enabling them to bring products to market sooner and make deliveries faster. Supply chains operating at higher speeds improve customer satisfaction and help businesses meet demand.

4. Provides a Workaround for Rising Supply Chain Costs

3D printers can work with just about any material — including metals, foods, wood, textiles, plastics, and ceramic — making them the ideal workaround for rising costs. Logistics businesses integrating them will save money, enabling them to contribute more funds toward process optimization or research and development.

The Transformative Power of 3D Printing Technology

3D printing is fast, precise, and cost-effective — the three qualities every logistics company strives for. Its impressive market value and penetration rate prove its popularity will likely continue rising, indicating its impact will broaden. Eventually, it could reshape supply chains permanently.