3D Printing, Value Chain and Lawyers

Quick Read: 3D Printing as a technology can can have revolutionary implications on all the 3 key stages of a value chain –  Manufacturing, Distribution and Retail. And not to forget lawyers!

Let’s Start With Manufacturing

Today Lego finds itself going to war with the 3D Printing technology. Why?

Because, what has happened over the last decade to music, newsprint, film and photography now seems to be threatining the world of shapes and objects. As this Washinton Post says..

Soon hobbyists…. will be able to craft their own (lego) bricks, thanks to 3D printers that make fabricating those plastic parts as convenient as going to Toys R Us. With such technology, entire structures can now be reverse-engineered, reduced into a pile of components and snapped together in minutes. 

Lego’s sophisticated molding process that currently enables it to produce 55 billion Lego pieces a year is probably not under an immediate threat from the 3D printers. But once the technical challenges like being able to meet the established tolerance levels for finish, texture and fit of various materials and being able to operate at scale are solved, which –  many experts believe is just a matter of time – Lego might be at a major  risk.

(Lego Ironman, Source)

So the recent remarks from Lego’s CFO John Goodwin who said “3-D printing is a fascinating development and certainly opens up a lot of new avenues” gain significance as a first ever major acknowledgment by Lego about the impending storm.

This has even led to some analysts predicting that the future for Lego could be as an Intellectual Property publisher of the digital models of their blocks, not unlike the modern record company which doesn’t actually create physical tracks anymore but just owns the IP rights of their music.

Moving Over To Distribution

Distribution (and inventory management) are known to be Amazon‘s expertise. But faster shipping can come at a price. For e.g, in Q1 2013, Amazon’s shipping costs were 4.7 percent of revenue (source). So it has reportedly been testing the grounds for newer, cheaper and faster delivery methods like drones.

But here is – what could potentially be – the billion dollar question. 

What if the whole value chain starting from maintaining inventories of raw materials, industrial scale manufacturing, packaging, palletising, shipping, bulk breaking, transporting, warehousing to distributing were to become redundant? What if we manufacture goods just in time near the final destination?  

As this article says, that’s where 3D printing comes in –  by producing goods in exactly the ordered configuration precisely when they’re needed, 3D printing is ideal for filling gaps in the supply chain (which reduces uncertainty), keeping inventory low more generally (which saves companies money on shelving) and reducing waste (which occurs when the goods aren’t sold).

Called as Just In Time manufacturing, UPS has already started to venture into this business model in a small but significant way. And the initial results are reported to be more than encouraging.

(3D Printer at a UPS Store, Source)

So when the largest shipment/logistics company in the world begins such seemingly ‘odd’ experiment around On demand 3D printing, it can only indicate one thing.

Even the distribution behemoths are swearing by the mantra – if you can’t beat them join them. 

And Finally Speaking Of Retail

This year’s SXSW – the annual music, film, and interactive festival being held in Austin as we speak now (from March 7 – 11) has been generating a good amount of buzz.

Oreo‘s Trending Vending Machine is an example.

Envisaged by Mondelez as a fun experiment with Twitter, the concept is a mash up between the vending machine experience and social media based real time marketing. Named, Trending Vending Machine, it has been offering the SXSW attendees Oreos with 3D printed flavours picked from trending tweets and delivered to the attendees in 2 minutes (source). This marketing effort includes the hashtag #eatthetweet.

While this certainly makes for a pretty good engagement driving initiative by Mondelez where the world of social media hashtags meets cookie cutter biscuits – literally, the underlying story here could be that of the emergent possibilities of 3D printing in the retail sector where:

• Inventories for the retailer are non-existent and limitless at the same time!
• Shopper engagement becomes the norm, in fact the key enabler for the whole set up
• And finally personalisation becomes a category code, and not just a fancy differentiation strategy

In fact, going by this logic, 3 D printers could even upend the very concept of retail sector as we know it today!

After all, why would anyone even bother to walk down an aisle when all they need to do is perhaps just download a design, chose a nearest 3D printer and click PRINT?

Or shall we call it MAKE?

Some food for thought on a related note: Thanks to 3D Printing, professions like Intellectual Property and Law can be in good demand for a long long time to come!

(Featured Image: 3D Printed edible Lollies at CES 2014, Source)