Many commentators have recently discussed the supply chain issues plaguing the world in the backdraft caused by the COVID-19 pandemic, and it looks like these issues are likely to precipitate a sea change in the way many businesses are doing. Business. Very early in the pandemic, in the spring of 2020, and during the near-global economic shutdown, vulnerabilities in international supply chains were highlighted. It became evident that many, many businesses had become accustomed to and dependent on a cheap international supply of goods, parts and components in exactly the quantities and at the precise times needed to run businesses effectively. The closures, almost suddenly, destabilized this structure, which was further aggravated by the almost grotesque blockage of the Suez Canal earlier this year for six days. This series of events has made many companies more aware than ever that they are overwhelmingly vulnerable to the vagaries of international supply chain problems.
As a result, conversations around this issue have changed direction. The balance between cheap but vulnerable international supply chains and more expensive but more reliable domestic supply chains is starting to shift. Perhaps the number one priority is no longer the cheapest the best, but rather the continuity of product supply is of equal if not greater importance.
Today, the shift to the latter priority is gaining even greater momentum, as the prices of goods from China now rise significantly, further eroding the argument for a supply of cheap goods. Like the rest of the world, China is grappling with economic headwinds caused by the COVID-19 pandemic. China’s electricity supply problems and costs are skyrocketing (as elsewhere), leading to unprecedented slowdowns in growth rates, higher inflation and a general sense of economic malaise.
So the question left unanswered is: if their products are not so cheap anymore, why would anyone pursue Chinese sourcing and run into international supply chain issues. At 3DPRINTUK, we see the effects of international supply chain disruption in several ways, one somewhat indirect and the other very direct. First of all, indirectly, we obviously work with 3D printing / additive manufacturing technologies, and these technologies play on the ability to localize the offer. The nature of the technology means that companies can serve the UK market and local customers faster, which means a shift from mass manufacturing to low-cost countries (which, as we have seen, are becoming less in less “low price”) to national supply. Additionally, as an “on-demand” production technology, 3D printing reduces the need to transport goods across countries and continents, which has a huge impact on warehousing and logistics costs.
All of this also benefits companies with digital inventories. At 3DPRINTUK every customer has a directory of digital parts in their account, the key is that 3D printing means parts can be manufactured on demand and delivered to customers in any geographic area from any location. Where in the world. Generally speaking, companies don’t like to hold large volumes of physical inventory. 3D printing of spare parts can reduce costs, increase part functionality, add a high degree of flexibility and responsiveness to service, and reduce risk. It also means that spare parts can be printed on demand and can be redesigned batch by batch without the need for tooling. Digital inventory reduces the costs associated with maintaining high physical stocks of all spare parts, and also reduces reliance on international supply chains, which means spare parts can be printed locally in the required number.
Directly, 3DPRINTUK notices that a number of companies that previously sourced injection molded parts from China are now looking for plastic 3D printed parts locally, due to the fact that the costs of injection molded parts in from China are increasing dramatically, and also due to the fragile nature of international supply chains, as discussed. As an agile technology that can economically deliver low to medium volume series of plastic parts, with geometric complexity not possible through the use of conventional production technologies, 3D printing is seen as the answer to the related issues. costs and supply chain for a range of applications.
And finally, is it a temporary fix, a short-term solution to the problems at play today, or does it mark a change in the way businesses will operate in the longer term? The answer is probably somewhere in the middle.
It is certain that the pandemic has brought to light issues that have yet to be thoroughly examined, and many companies will no doubt continue to use domestic 3D printing services in the future. There are now a significant number of companies that regularly order from sources in China and are now realizing the allure of using additive manufacturing in the UK. This trend is reinforced when 3DPRINTUK customers see how easy CNC and repeat orders are these days, and also when they benefit from the scale of AM machine infrastructure in-house, which means that high levels of demand can be easily met.
The allure of cheap supply will always be there, but supply chain issues related to the pandemic have been so disruptive that companies will try to balance cost and security of supply in the future. After all, health issues related to the pandemic are only one, and relatively infrequent, cause of supply chain uncertainty. The specter of international trade wars and political and economic disputes is pervasive, and these will inevitably lead to the need for secure domestic supplies in the future.