Wednesday, August 7, 2013

Stream Me That Burger, I am Hungry

imageDo you remember when you used to go to your neighborhood music store and spend hours listening to the new albums before buying a couple of CDs on your way home? Yeah, it is history now! Technology changed the physical CDs to mere bits. You still love your music, you still sample new albums, you still buy it, just not the same way as you used to. And that also changed the music industry’s supply chain: It made it obsolete. With additive manufacturing techniques, more supply chains may be on their way out.

Couple of years back, I had written about the transformation of the music industry’s supply chain as people moved from physical media to digital and streaming media. Quoting from my book on supply chain strategy, “ … they have to redefine their processes, throw away capabilities they had developed over time and create new capabilities that did not exist. Think of the distribution model for music in the 1980s and 1990s compared to the distribution model prevalent today. The physical distribution channels and all related processes of manufacturing, distribution, logistics, and store-based selling are no longer important in the new landscape. The management of inventories as the music charts changed the demand for specific artists/songs, the process for determining what to sell,what to stock and how much, and when to start the clearance sales have ceased to be relevant in an industry that is going digital. The new distribution processes need skills that are very different from the previous ones. The new model concerns itself more with the bandwidth for downloads and electronic copyrights protection algorithms rather than worrying about safety stocks and shipping costs. As the business environment changes, firms may have to rethink strategy and realign their efforts to leverage the changes in the external business environment.”

Now imagine that not only your music, but your belt, phone case, mugs, car spare parts, shoes, and even food were “streaming” to your house! Yes, additive manufacturing or “3d printing” may eventually do that. Additive manufacturing literally “builds” things bottom-up by assembling “layer-upon-layer of material, whether the material is plastic, metal, concrete (or one day human tissue)”. Consider few examples happening now:

  • GE is planning to start building fuel nozzle for its next-generation jet engines using additive technology. “The new nozzle will be 3-D printed as a single part rather than assembled from 18 pieces, and it will be up to five times more durable. GE is also running its own 3-D metal printers, testing the procedure out on as many parts as possible for both the LEAP and the GE 9x, its next-generation 777 engine. … GE plans to announce a major investment in an another new additive-manufacturing factory that will mass-produce ceramic engine shrouds” according to WSJ.
  • Bespoke Products, is making artificial limbs using the additive manufacturing.
  • Organovo Holdings Inc. is using 3-D printing to create human tissue for use in medical labs.

In fact, 3D Systems will sell you a personal 3d printer for under $1,500! You can buy a plan (or in some cases download for free) for a few dollars and “print” yourself a custom case for your new smart phone, or a coffee mug, or a pencil case, or any other small object that can be constructed from plastic. Printers with ability to handle metal or concrete as “building” materials exist though not quite so common as yet. Of course, the best part of the technology is that it can create any shape thus enabling us to copy the designs from the nature, for example, the skeleton of a bird  or hummingbird’s feathers for a little flying robot!     

While the technology is definitely in its infancy, this is already being called as the next “industrial revolution” and for good reason. In fact, this has the potential of changing the world in ways that we can’t imagine right now. Remember when you used to go to Kinko’s to get a few copied made or print a large report for your meeting? What if you could walk into a 3d-printing vendor’s shop and print your car’s bumper that you crashed while backing up? How about walking into a neighborhood “style studio” and printing yourself a pair of Jimmy Choo shoes that are custom-fit for your feet? Or a Gucci belt? While we are at it, let us stretch our imagination a little further and imagine “printing” your food at home from bulk materials, proteins from a tube mixed with carbs from another and sugars from the third?

A little far-fetched, may be, but all quite within the realms of possibility within a few decades! So what has all this to do with supply chains? Well – we already know what happened to the supply chains for manufacturing, distributing, and selling CDs with digital media, so is it so hard to imagine where the supply chains may go next for food, for spares, for shoes, for phone cases, and for all the other countless products which will see themselves “streaming” to your neighborhood 3d “factory” soon!

Other Resources:

Want to know more about supply chain processes and supply chain strategy? Check out my books on Supply Chain Management at Amazon.
© Vivek Sehgal, 2013, All Rights Reserved.

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