Distributed manufacturing has been recognized by the World Economic Forum as one of the top ten emerging technologies globally The reason for this is that distributed manufacturing has so much to offer, including
- Dramatically reduced logistics costs as the majority of the miles from OEM to end client are covered “digitally”;
- Huge reductions in inventory costs as parts are manufactured on demand rather than mass produced and then stored until they are needed; and
- Reduction in waste as excess parts are not manufactured to be later destroyed when unused.
Manufacturing has been centralized since mass production took off in the early twentieth century. Modern production methods were very effective at reducing part costs but relied on large production runs to achieve the necessary economies of scale. This has been a limiting factor for manufacturing efficiency for over a century. Typically, parts are manufactured in large quantities, including an excess to allow for spare parts for later replacement. It is notoriously difficult to predict the required quantities of spare parts so manufacturers risk either:
- Overproduction, leading to waste; or
- Underproduction, leading to shortages, longer lead times and higher short run production costs.
As parts are made centrally (or in some cases in a small number of sites), they must be shipped to the point of demand, often by expensive high speed transport to ensure rapid installation, lowest possible downtime and customer satisfaction.
How does Additive Manufacturing change this?
One of the key differentiators for Additive Manufacturing is the cost efficiency of low production runs. This is why the technology has been so successful in prototyping and customized manufacturing. This paves the way for distributed manufacturing of individual parts at or near the point of need, delivering all of the benefits above. However, there are valid concerns amoung manufacturers in embracing this new technology: