Additive Manufacturing Won't Bring an End to Service Parts Supply Chains

Written By: Steven Caldwell
  • 12/21/2017
additive manufacturing service parts supply chains

At first glance, it would appear additive manufacturing will mean the end for service parts supply chains. I came across a PwC study that said 85 percent of parts suppliers “will incorporate 3D printing into their [businesses].” The question is, to what degree?

Do I think 3D printing will have a profound impact on parts planning? Yes, but the technology won’t render service supply chains obsolete, as I’ve heard some people suggest.

Service parts inventory optimization and additive manufacturing

Let’s look at this from a hypothetical situation. Suppose you manufacture and service industrial turbines. You have 70 locations at which you store parts.

Now assume you have some sort of service parts inventory optimization solution. It’s analyzing the following factors to determine where you should stock specific parts, and how many:

  • Part or asset availability targets specified on your service-level agreements.
  • Inventory budgets.
  • Part criticality.
  • Procurement and repair lead times.
  • Effective lead times between regional warehouses and forward stocking locations.
  • Complex part relationships.

What would happen if you threw a 3D printer into the mix? The algorithm would try to identify the location in which the 3D printer’s strategic value would be highest and which parts the machine should print. Making these decisions would involve assessing:

  • Which serviceable parts could be 3D printed.
  • How placing 3D printers in certain locations would affect lead times.
  • The estimated improvement in service levels and asset availability.
  • The cost of 3D-printing a part versus procuring it conventionally.

Essentially, the inventory optimization algorithm would identify the location where you would see the highest, most expedient return on investment for your 3D printing capability.

How soon will 3D printing come to service parts supply chains?

Right now, most companies (at least the ones I’ve spoken with) seem to be in the very early stages of implementing additive manufacturing. They see it as an interesting technology, but they're not rushing toward large-scale implementation.

This aligns with one of PwC's findings: The majority of parts manufacturers (60%) expect they will use 3D printing to manufacture only 1% to 10% of their spare parts in the next five years.

3D printing will play an integral role in parts logistics. However, it will not eliminate supply chains. Rather, additive manufacturing will further increase the importance of sophisticated solutions to optimize and manage service parts networks.

Want more articles like this? Sign up for our newsletter, the Fix, today:

Subscribe to The Fix the PTC SLM Newsletter

  • CAD
  • Service and Parts
  • Additive Manufacturing

About the Author

Steven Caldwell

Steven Caldwell is the Vice President of Business Development at PTC. Steven is a service parts optimization thought leader with over 15 years of best practice knowledge. He is a key contributor to the design, development and delivery of Servigistics – the industry leading service parts optimization solution. Steven and his team provide dedicated support for PTC’s Servigistics Business Unit helping service organizations orchestrate world-class service parts optimization (including service parts management and service parts pricing). Steven holds a Bachelor’s Degree in Economics and a Bachelor’s Degree in Computer Science from Vanderbilt University.