BRISC–Business Resilience in the Supply Chain

I was prompted by an email flyer advertising the forthcoming business resilience in the supply chain conference (see www.brisc2011.com) to ponder the true meaning of resilience in this context.  Many people would automatically think about the recent earthquake and tsunami in Japan and the widespread dislocation this caused.  Others might consider the financial stability of their suppliers and take steps to mitigate the risk of key suppliers going bust.  Until recently I doubt whether many business managers considered that their Banks might be a key supplier who suddenly stopped offering key services, such as extended overdraft facilities,with a consequent impact on their own viability but it certainly ought to be on the radar of everyone now.  But how about a new and disruptive technology that can both impact the supply chain and offers real opportunities for improvement to the resilience of that supply chain, namely 3D printing?

Now 3D printing is a short hand term for something that has been around for a while but has started to become an affordable and proven technology with mass application.  More correctly known as “additive manufacturing”, it started 30 years ago as a means of rapid prototyping, using scanning and printing techniques to produce trial parts drawn up on CAD (Computer Aided Design) systems. Formula 1 teams have been using this technology for a little while to make high value components when needed, where only small numbers are needed and subtle refinements are necessary.  What is this technology and what does it mean from a resilience perspective?

Simply put, 3D printing enables complex components to be built up through the use of a laser print head to fuse layers of powder into a plastic object. The car industry has been using this technique to “send parts” around the world but now the technology is beginning to move into the space traditionally occupied by mass production.  Henry Ford made cars using standardized components to make them affordable, but additive manufacturing means that every product can be customised.  What is more, components that currently have to be made in several parts or to have holes drilled into them, can now be made in a single component.  Take for instance, a jet engine component that is currently made in seven parts and assembled.  An expensive part and requiring tooling to make, but this can now be made in a single printing process.  EADS are already using exactly this technique in making aircraft components, albeit on a small scale at present.  Furthermore, a car door handle in 11 parts and several materials can now be “printed” in one material – saving on sub-assembly operations in manufacture but also saving in cost at the end of the life of the component as it does not need to be dis-assembled for recycling.

A key point from the resilience perspective is that the data to produce these components is held in electronic formats that can be sent around the world to enable printing to take place wherever it is needed.  This does not require specialist tooling and a manufacturing plant to produce, but a standard and affordable (if expensive) piece of kit.  This means that if you are desperate for a particular component to get you working again, you can get the data and have it “printed” locally, you don’t need to wait for a shipment from China in 3 months.  Furthermore, components that are no longer available can also be reproduced extending the life of equipment that may otherwise have needed replacement – a hedge against the failure of a key supplier or simple redundancy of old equipment.

Of course, there is then a consequence for inventory stocking.  If you can store spare parts as virtualised data and only produce the component when needed, then there is no need to maintain large inventories for “just in case” delivery, saving on costs and increasing resilience at the same time.

This technology is gaining momentum and offers several obvious opportunities.  However, it is early days in the transition to the mainstream technology and there are liable to be many developments that are disruptive to existing businesses that we have not yet imagined; a Google or Facebook moment for manufacturing perhaps.

The technology at present is still in transition from the leading edge to a widely available and widely used one.  At present printing some components may take several days and whilst this is quicker than a slow boat, it is still a long wait.  But this is changing and affordable “home” printers are coming, such that domestic scale components will be realised within a few years.  So, as you ponder about BRISC, think about the technological and social changes that will also have a fundamental impact on the supply chain in the next few years.