With the advent of 3D printing, the giants of e-commerce can look forward to a slimmed-down supply chain which works on the just-in-time principle.
At a time when Amazon is making considerable investments in order to offer its customers delivery in under 24 hours, 3D printing services may be on the way to shortening the delivery chain. Amazon‘s Prime service offering free two-day shipping for eligible purchases is the company’s main trump card in relation to rivals such as eBay and Wal-Mart. Now, however, as 3D printing techniques are being perfected, the traditional supply chain based on warehousing goods is likely to change. However there will have to be many logistical and technical improvements before any real paradigm shift occurs in e-commerce order fulfillment.
Towards customized, just-in-time production
The biggest competitive challenge in the e-commerce sector is delivery time, and the main platforms rely on networks of connected warehouses or else go into partnership with retail chains. The contest for best performance calls for constant innovation. Amazon has built more than 50 ‘fulfillment centers’ in the United States in under three years and is stepping up its acquisitions,Kiva Systems, a company which automates warehousing, packaging and shipping, being a prime example. Amazon’s delivery policy is however very expensive, costing the company the equivalent of over 5% of its turnover. By basing order fulfillment in part on 3D printing, it might be able to eliminate a number of cost items – stock management and unsold goods, for example. Stresses Hod Lipson, head of the Creative Machines Lab at CornellUniversity: “With 3D printing, production can be more easily adapted to demand.”
Adapting the existing order-fulfillment structure
For the moment, given the limited capabilities of 3D printing and the narrow range of materials that can be used, the current distribution model is not under serious threat. However, it will need to adapt if it is to take full advantage of the new technology. The just-in-time principle, which would be useful for customized production based on a specific customer order, could be developed on a local basis in neighborhood centers. The UPSStore is leading the pack here. The company is set to launch 3D printing services in-storein San Diego, providing a service to startups and smaller business that need to print out prototypes or samples. The hybrid approach, where objects are printed or partly printed in 3D and then delivered to the customer is starting to gain ground. Thus we already see New York-based 3D printing marketplace and service startup Shapeways collaborating with UPS to have its goods delivered. A giant such as Amazon may also choose to add flexible production technology to its rapid delivery knowhow in order to minimize stock problems and move another step closer to instantaneous delivery.