Most everything that supply chain leaders and chief risk officers know about supply chain risk management today could soon become obsolete, thanks to rapid advances in 3D printing.
We’re already seeing signs of this in the construction industry: In March 2018, 3D printing construction company ICON, in partnership with non-profit group New Story, unveiled the first permitted, 3D-printed home in the United States in Texas with the commendable aim of creating affordable housing for all. Other 3D printing construction companies—like Apis Cor, Contour Crafting, and CyBe Construction—have developed similar technologies. And last year, Dubai-based Cazza Construction announced plans to build the world’s first 3D-printed skyscraper by 2020.
Although still in its infancy, 3D printing on a larger scale could drastically reduce the costs and risks intrinsically linked to globally complex supply chains. It’s not too soon for chief risk and compliance officers, as well as financial executives, across all industries to weigh the risks and rewards, like the following:
Affordable domestic production. By using 3D printing, companies can save both on labor costs, as well as the costs of transporting the materials. These cost savings alone greatly tip the scales toward the benefits of domestic, as opposed to overseas, production and cheaper labor abroad.
Reduced compliance, legal, and financial risk. Printing goods and products domestically effectively reduces the compliance and financial risks posed by high-risk third parties in other countries, including human rights violations in the supply chain.
3D printing is not science fiction; it’s here and now—and it’s sure to change how risk, compliance, legal, and financial executives think about supply chain risk management moving forward.
Reduced tiers, greater visibility. One reason why third parties pose such a high risk to multinationals is the lack of visibility into their suppliers and their suppliers’ suppliers. The way 3D printing works, however, is that it often only requires a single raw material—concrete to print a building, for example—as opposed to a multitude of subcomponents or materials. Thus, the many tiers of manufacturing or assembly companies depend on today can be drastically reduced. That said, 3D printing wouldn’t eliminate the need for suppliers and contractors altogether (e.g., you’d still need electricians and plumbers in the construction industry, farmers and food manufacturers in the food industry, etc.)
Reduced business continuity risk. Unplanned supply chain disruptions happen all the time for a variety of reasons—natural or manmade disasters, geo-political events, bankruptcy, and more. A 3D printing digital supply chain reduces geographic or operational risk and the need to find new suppliers for products or goods. Some construction companies, for example, are using 3D printing to create individual pieces and parts on-demand, while the healthcare industry has started using customized 3D printing to print life-saving medical devices for patients. Similarly, depending on the industry or company’s operations, having the ability to print products on demand reduces the risk of supply shortages or surges in product demand and could eliminate the additional costs of carrying inventory.
Sustainable benefits. Hypothetically, if 3D printers could use only the amount of material necessary per project or product, this would result in less waste and, thus, further reduced costs for the company. It could even go a long way in helping a company reduce its carbon footprint.
Of course, 3D printing does not eliminate legal, compliance, and financial risks altogether, but rather shifts the risks away from the physical products themselves onto the information that goes into making those products. Thus, the need for manufacturers to protect their intellectual property rights only becomes amplified. There is also an array of ethical issues yet to be addressed, especially in the medical field concerning the safety and efficacy of bioprinting human limbs and organs.
In any case, 3D printing is not science fiction; it’s here and now—and it’s sure to change how risk, compliance, legal, and financial executives think about supply chain risk management moving forward.