What’s the Impact of Digital Manufacturing on Supply Chain Management?

Digital manufacturing has had a major impact on supply chain management, thanks to the growth and improvements in additive manufacturing and 3D printing. For example, more and more companies are turning to metal 3D printing in the automotive, oil and gas, biomedical, and defense manufacturing industries. We’re also seeing an increase in the number of 3D-printed houses around the world. What was once a rare occurrence is now more commonplace and widely accepted.

3D printing is reducing the time it takes to build a house or design and prototype new parts, and it eliminates the need for specialty parts to be made overseas and shipped to your factory or job site. A few years ago, 3D printing was more suited to specialty manufacturing, but as printers get faster, we’re going to start seeing it used more and more in mass production.

There are other benefits of digital manufacturing on supply chain management as well.

The Testing Challenge

When a new product is developed, particularly one that has to meet specific criteria — such as being able to withstand high temperatures or pressures — you need to do extensive testing. You can’t just toss a prototype into an extreme environment and hope for the best. It takes rigorous and repetitive testing to make sure the new products meet the necessary standards.

How Digital Manufacturing Helps

Digital manufacturing can improve testing and prototyping. Advanced software lets engineers create digital simulations of their products and do the testing via computer, not real-life applications. Imagine being able to conduct thousands of tests on a computerized version of your product. This helps you identify any problems and iron them out before you start making the first prototype. And with artificial intelligence, it’s possible to analyze the data in newer and faster ways. This reduces the number of real-world tests needed, it also minimizes the chance for errors and waste of raw materials.

Impact on Supply Chain Management

Fewer errors and a streamlined testing process mean products move from the design stage to production much more quickly and efficiently. However, that doesn’t magically simplify the shipping facet of the supply chain. Regardless of how a product is made, it still needs to fit the specific shipping requirements, like fitting into standard shipping containers or meeting different state, federal, and international regulations.

The Concept of Digital Twins

Digital twinning is the creation of a digital replica of a physical factory — it’s sort of like the same way you can computerize testing, only now you’ve created an entire virtual factory. The advantage of digital twins is that you can set up smaller, local factories closer to either suppliers or consumers, rather than shipping everything out of one giant factory. Doing this means you can reduce shipping distances and times, which increases your supply chain’s efficiency.

Risk Considerations

Before you start relocating factories closer to customers, you need to first consider the risks. For example, customers’ needs can change over time, so the demand could change and your factory would become obsolete. Setting up a factory is a significant capital investment, and you don’t want to sink money into a factory you don’t use. So, it may make more sense to be closer to your suppliers instead. This is especially true if they provide unique or specialized materials that are essential to your production process. You can get those items much faster and at a lower shipping cost to you.

The Balanced Approach

Some experts believe the best strategy for placing these localized factories might be a balanced approach between suppliers and customers. You want to consider things like transportation costs, availability of raw materials, and ongoing customer demand.

Digital manufacturing offers a number of benefits, from cost-savings to product testing to improvements in the supply chain. But like any other tool, it’s most effective when it’s used wisely.

You need to understand the different ways you can improve or impact a supply chain in order to use digital manufacturing to its fullest potential. The technology may present exciting possibilities, but it also requires thoughtful planning to get the most out of it.

When done correctly, it can be a game changer for the entire supply chain journey, from the drawing board to your customers’ hands.

I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business, including pivoting your supply chain to include digital manufacturing. If you would like more information, please visit my website and connect with me on Twitter, Facebook, or LinkedIn.

Photo credit: Michoff (Pixabay, Creative Commons 0)