July 6, 2016 Industry Forum Blog Supply chains as we know them are not just becoming quicker thanks to technology. They are about to be reversed. No longer will the manufacturer be the one to initiate which goods, and what volumes go to market. The pairing of smart phones and tablets with locally based 3D print shops and the advent of last mile delivery drones will shift control to the consumer. Traditional Up until recently most of us would go to a brick built store to buy what we needed from the range of goods available on the shelf. Our choice is limited to what the store decides to sell, or will order on our behalf and ultimately the manufacturer determines what specification, sizes, colours and styles will be available. Depending on the goods, these decisions are influenced by market research and forecasts. For something truly bespoke you would have to search for a suitable provider and pay accordingly. Once made the manufacturer pushes the goods out to the market usually via a series of warehouses. As shown in the diagram, the supply chain starts with the manufacturer designing, sourcing and making a range of goods. Modern Today an increasing amount of what we buy is done on-line. Companies like Amazon have allowed us to take control over when we shop, as well as where and to some extent when we receive our goods. On-line shopping and the resulting simplification of the supply chain route has already given us significant reductions in lead time from purchase to receipt. And although manufacturers are focusing on satisfying ever more demanding consumers, they are still the ones who initiate the supply chain. Read about changing consumer demands and how every aspect of the supply chain is being optimised by following these links to our recent blogs. Role reversal The next dramatic change to our supply chain model will happen with the arrival of local 3D print shops and the ever more sophisticated range of materials available to them. Because 3D printers work from electronic files, as opposed to being limited to the tooling they are set up with, they can produce a vast range of highly customised items, one at a time. Virtually at “the click of a button”! If you can make exactly what the customer wants (size, fit, colour, style etc.), when they want it, on their doorstep you will: Eliminate the costs of warehousing and inventories. Dramatically reduce the lead time as transport distances and times are minimalised. Only making what the customer demands will move control of the supply chain to the consumer. But what will happen to your factory? In this model there is no need to have a large, centralised manufacturing plant. In theory all you may be left with is the need to turn your designs into electronic files for the 3D print shops. Car parts and personalised human body parts, clothing and edible items are already being 3D printed. While this is unlikely to happen in every manufacturing sector, some are already making moves to adapt existing business models. The 2015 report by Frost and Sullivan “The Future of Parts and Service Retailing in the Automotive Aftermarket”, analyses how customers will shop in the future. It predicts that by 2025, 10-15% of all global part sales will be made on-line and goes on to show how the sector is responding. So what steps are you taking to adapt your business model? Localised manufacturing, B2C e-commerce, making money from your data?
