3D printing is changing the way business does business, presenting both opportunities and challenges for every business, from manufacturers to shippers to retailers.

The concept behind 3D printing, according to the Harvard Business Review®, “is a small evolutionary step from spraying toner on paper to putting down layers of something more substantial (such as plastic resin) until the layers add up to an object.”1 3D printing uses extrusion technology, coupled with computer assisted design (CAD), to create three dimensional items – from prosthetic body parts to bottle caps.

3D manufacturing isn’t a distant concept. It’s here today and it’s being used today. And, according to the Harvard Business Review, “3-D printing will change the world.”1 It will also change the way business runs business.

Additive Manufacturing: Accelerating Product Development

3D printing, also called additive manufacturing, is changing the process of product development, shortening the process and getting products to market faster. Items can be customized to any specifications because making changes won’t require expensive re-tooling. Just tweak the CAD and “print out” a new prototype.

Thanks to this new technology, companies will become more nimble in meeting the customization needs of their clients, and businesses that hold on to traditional manufacturing methods are likely to be left in the dust.

New Manufacturing Strategies and Footprints

General Electric® already uses additive manufacturing technology to construct turbines, and footwear giant New Balance® offers custom-fitted shoes using 3D printing.2 However, according to Time® magazine, “The promise of 3D printing isn’t just in how things are made, or how goods are delivered, it’s in the ability to dramatically reduce costs of production.”2

Using additive manufacturing tools and techniques, lower costs are predicted for many areas, including research and development, testing and refinement, manufacture, product updates, and even shipping costs.

Additive manufacturing may lead to more localized manufacturing – even in-home manufacturing. Consumers could purchase raw materials, and the building software to create products in their homes. The Harvard Business Review points out that, “…goods that have relied on the scale of efficiencies of large, centralized plants will be produced locally.”1 The Review points out that while cars are made in a few hundred plants, using 3D technology may enable local manufacture – each region producing its own cars.

Across the supply, manufacturing and retailing chains, businesses will have to invest and change their procedures to enjoy the cost-reduction benefits offered by additive manufacturing.

Shifting Sources of Profit

Today, manufactured goods are created in large plants and shipped to consumers, which adds to their cost.  Additive manufacturing will shift profit centers to regional and localized plants that use 3D technology to create products that ship at lower costs.

Development companies, and companies that manufacture 3D equipment, are likely to see lower costs in design and development, and increased sales as more factories adopt additive manufacturing technology. Profits are expected to increase as labor and shipping costs decrease, although manufacturers will have to spend millions of dollars to build and equip local manufacturing operations, which will present a big financial challenge in the short term.

Additive Manufacturing: Delivering New Capabilities

While 3D manufacturing has been around since the 1980s, only now is the manufacturing sector discovering both the challenges and opportunities it offers.

Prototypes will be developed faster, and at lower costs. Changes to existing products won’t require retooling, just reprogramming. New materials are being developed for a variety of manufacturing tasks.

Companies, large and small, will face new challenges as additive manufacturing continues to grow in utilization. However, when these same companies invest in this growing technology, creating localized manufacturing hubs, both manufacturing and shipping costs drop, product changes are much simpler to implement, and manufacturing options will continue to expand as 3D manufacturing becomes increasingly sophisticated.

  1. https://hbr.org/2013/03/3-d-printing-will-change-the-world/ar/1
  2. http://business.time.com/2013/12/27/why-3d-printing-is-turning-out-to-be-risky/

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.