The Future of Logistics
Send files - not parts
By: Joanna Carbajal
At Ivaldi Group, we believe it is possible to simplify the logistics system in the maritime industry. The current supply chain suffers several challenges. The manufacturer, uncertain of the potential demand for parts, has to guess the market to produce a quantity that will sell. Parts are mostly made, stored and then shipped before the end user even places an order. Moreover, the cost of storage, transportation, and unsold items are all obvious flaws with this system. The capital tied to large batch production could otherwise be freed up to grow the business. Another issue involves the unavailability of obsolete spare parts or “unobtainables.” Large and otherwise functioning systems are fully swapped because simple plastic and metal components are unavailable and delays are costly. Maersk estimates that a spare part at sea costs $5,000 with shipping and will often take weeks to deliver.
Zero inventory can be achieved using additive manufacturing - it’s the future of logistics. Instead of having physical inventory, we have digital inventory. With Ivaldi Group, the customer selects their needed part from a database and places an online order. The part then starts production to be delivered within 24 hours from a local micro-factory. Apart from additive manufacturing improving cycle times and quality control, it can reduce production costs, free up operating capital, reduce response times, warehousing costs and transportation costs. It can also significantly reduce time to market since redundant procurement, manufacturing, deployment and distribution steps get replaced with digital solutions.
However, there are challenges. Long-standing and respected additive industry expert, Kerry Stevenson (also known as General Fabb), recently outlined some challenges in his post titled “Could 3D Printing Really Transform Logistics?” For Ivaldi Group, the answer is a resounding “YES.” Here are the issues he covered and our take on them:
1. Production - "Creating an object requires more than a 3D printer." This holds valid for any tool or production process, but it’s surprising what can be done with minimal post-processing. Check out this threaded pipe connector we printed. It’s a rough print, but it doesn’t have to be beautiful to be functional. This pipe connector works straight off the printer with no additional threading required. Note that many printed parts are also single pieces. Multiple parts would usually require more traditional manufacturing processes.
2. Constraints - "There are a restricted amount of materials and build volumes that a 3D printer can work with." The Type A Machines Series 1 prints in more than 88 different plastics. We estimate we only need 5 of them to service the majority of maritime plastic part needs. In regards to build volume, the majority of spares fit within a cubic foot build area.
3. Limitations - "Because of the two points above, there will be a restriction on the items produced and therefore the size of the market." How many of the world’s parts can fit inside a one cubic foot build volume and be made in a single plastic or metal using additive manufacturing? In short, we don’t know, but a sampling of 2,000 parts from an industry supplier identified some 17.6% as immediately printable with a further 7.9% of parts that had sub-assemblies that might be printed. Regarding the marine supplies demand, from 2006 to 2010, the average annual world demand was in the range of €149 billion. Marine spare parts have proven to be unobtainable and costly. In 2001 and 2002, the U.S. Navy spent more than $8.1 billion in spare parts. In 2000, 46% of the 132,000 parts requisitions from ship inventories were not met. Parts that were fulfilled took about 18 days to arrive. Furthermore, a study showed that 37% of the ocean container business and 41% of the air cargo business is at risk due to 3D printing.
4. Startup Cost - "Mr. Stevenson argues that there may not be enough demand to justify the existence of a standalone manufacturing plant." Micro-factories may not have to cost a lot to set up and operate given that desktop additive manufacturing devices are rapidly approaching industrially acceptable quality outputs.
5. Timing - "This argument involves that 3D printers are too slow to produce an object." Our own experience is that a 24-hour print still beats FedEx. Let’s talk about the cost and times connected to transporting a single plastic impeller from NY to Rotterdam. Plastic injection molding takes on average 8-10 weeks. A 3D printer, on the other hand, can produce within hours. With desktop manufacturing being affordable, parallel production can be scalable, redundant and cost-effective.
6. Cost - "Profitability is questionable considering the high price of a 3D printer." However, we suggest that traditional industry actors are thinking “mainframes” when they should be thinking “servers.” Due to the expiration of 3D printer patents, a $200,000 printer now costs below $2,000. Type A Machines championed this approach with their Print Pod system which came out in 2015, and other hardware manufacturers are starting to follow. Fused Filament Fabrication and Selective Layer Adhesion additive technologies are already cost-effective when used in parallel.
7. Rights - "This argument concerns with the intellectual rights over the digital files, and the need for part providers to continue to protect these rights." While this is a valid statement, many companies are already outsourcing manufacturing to trusted third parties. As such, security and control is key, but it is not necessarily a blocker to profitability when it comes to choosing supply and distribution chains.
8. Comfort - "Some companies would not want to send their files to another company." While at Ivaldi we are developing partnerships with several original equipment manufacturers, we also recognize that not everyone wishes to do so. It’s a question of cost versus risk. Early adopters focus on low-risk products and scale-up as they become more familiar and can account for risk.
9. Disruption - "As Mr. Stevenson points out - new technologies will cause disruptions. “Who would want to make the truckers angry?”" This is a great point, but can we fight progress? Do we embrace the future or run from it? Judging by the latest robot out of Boston Dynamics, running just got a lot harder. At Ivaldi Group, we believe that the best way to tackle disruptive technologies is to embrace them and guide them towards positive change.
With every disruption, there exists an opportunity to challenge not just the status quo but also the future. How will the new state of things affect the world? As manufacturers and service providers of that promising future, we have a responsibility.
We take that responsibility seriously. At Ivaldi Group, we believe it is possible to simplify the logistics system in the maritime industry. We believe it is possible to do this in a way that is positive for people, planet and profit. We are determined to seek solutions and opportunities to do so.