{"id":18576,"date":"2016-11-18T17:55:14","date_gmt":"2016-11-18T22:55:14","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/what-can-brown-print-for-you\/"},"modified":"2016-11-18T17:58:42","modified_gmt":"2016-11-18T22:58:42","slug":"what-can-brown-print-for-you","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/what-can-brown-print-for-you\/","title":{"rendered":"What Can Brown Print For You?"},"content":{"rendered":"

UPS generates $48.9B of annual revenue in part by delivering over 18.3 million packages per day to customers all around the world [1<\/a>].\u00a0 An undisclosed portion of this revenue comes from storing parts in their regional warehouses and delivering on-demand to customers [2<\/a>].\u00a0 Additive manufacturing, also known as 3D printing, is an emerging technology that threatens to eliminate this revenue stream. \u00a0Customers that can print their own thermoplastic and metallic parts would no longer need UPS’s inventory storage and delivery services.\u00a0 To counter this, UPS is disrupting itself by using\u00a03D printing to create a fully digital supply chain, replete with on-demand production.<\/p>\n

What is 3D Printing?<\/strong><\/p>\n

Traditional manufacturing methods involve starting with a raw material stock and then cutting, grinding, and drilling material away to create the desired shape.\u00a0 This type of manufacturing is \u201csubtractive\u201d because material is removed to obtain the desired shape.<\/p>\n

3D printing is the opposite. \u00a0After a computer-aided-drawing (CAD) model is sent to a\u00a03D printer, raw material in powder form is printed onto a substrate, creating the first 2D layer. \u00a0Then, the next layer is printed on-top of the previous one.\u00a0 These 2D cross sections are built upon each other until a 3D part is created. \u00a0Figure 1 provides an overview of a metallic 3D printing process. \u00a0Although 3D printing enables engineers to create parts that are lighter, stronger, more resilient, and more thermodynamically efficient, the most disruptive enabler of the technology is the ability to create a digital supply chain.<\/p>\n

\"Image
Figure 1 – How 3D Printing Works [3<\/a>]<\/figcaption><\/figure>\n

3D Printing\u2019s Effect on the Supply Chain<\/strong><\/p>\n

Traditional manufacturing processes and supply chains are governed by numerous principles, including standardization, economies of scale, employee learning curves, and machinery setup time.\u00a0 3D printing removes these constraints.<\/p>\n

\"traditional-vs-digital-supply-chains-updated\"<\/a><\/p>\n

The vision for UPS is a 100% on-demand digital manufacturing and supply chain. After customers upload their model and place the order, the order will automatically enter the printer queue, the part(s) will be made, boxed, and loaded onto a truck. \u00a0But with the 3D printing sales growing 34% annually for the past three years, will UPS be able to fend off competitors and remain a market leader [4<\/a>]?<\/p>\n

Strength in Numbers<\/strong><\/p>\n

\"UPS<\/a>
UPS 3D Printer Locations [7<\/a>]<\/figcaption><\/figure>Earlier this year UPS announced that they were partnering with the 3D printing company Fast Radius and supply chain management company SAP to create the digital supply chain. \u00a0SAP’s customer relationships and supply chain management role, Fast Radius’s printers, and UPS’s massive delivery network create a powerful triumvirate. \u00a0The service is attracting new customers like GoPro to shorten the innovation cycle through rapid prototyping [5<\/a>]. \u00a0For existing customers,\u00a0SAP will identify parts that customers hold in inventory and determine if they should instead be printed on-demand. \u00a0So far, things looked promising. \u00a0UPS has recently installed Fast Radius 3D printers in 60 of its regional warehouses. \u00a0In September, UPS announced they are expanding the on-demand printing concept to the world, with Singapore as the first location [6<\/a>].<\/p>\n

UPS’s Advantage<\/strong><\/p>\n

Making parts could provide a massive new revenue stream for UPS.\u00a0 However, the differentiator\u00a0for UPS is not in printing the parts, but is in assembling a database of thousands of standard parts\/pieces and consisting of SAP’s customers\u2019 unique parts. The ability to digitally manage and produce inventory for customers is a high barrier to entry for competitors.<\/p>\n

What Should UPS do Next?<\/strong><\/p>\n

UPS’s first-mover advantage and corporate partnerships will sustain their lead for a while. But, to help customers use their service, UPS should develop a software tool to help customers quantify the savings from switching to just-in-time production. \u00a0Outside of the aerospace industry, who has leveraged the benefits of 3D printing, industries are often deterred by the expense of 3D printers, especially metallic printers that cost up to $500,000. \u00a0 For UPS, presenting the holistic cost-reduction picture of reduced inventory costs, less raw materials, improved product design capabilities, and improved quality* may\u00a0help prospective customers switch to their service.<\/p>\n

*Quality improvements can exist since the material properties can be evaluated at the molecular\u00a0level after each layer of printing. \u00a0This in-situ isn’t possible with castings, forgings, and many other manufacturing methods.<\/p>\n

Setting Expectations<\/strong><\/p>\n

I would be remissed if I didn’t point out the challenges ahead. \u00a03D printing is still a developing technology. \u00a0UPS has used it primarily for plastics to make prototypes and small, non-critical parts. \u00a0Certain improvement areas for the technology are reducing the time to print from multiple hours to less than an hour and reducing the cost of the raw material powder, especially for metals. \u00a0But, the benefits of 3D printing and the effect on supply chains will continue to drive investments into the field. \u00a0UPS has made a big bet. \u00a0Only time will tell how fast new customers will find the technology to be economical. \u00a0The real question is, “What can UPS Do<\/del> Print for You?<\/p>\n

Word Count: 794<\/p>\n","protected":false},"excerpt":{"rendered":"

Instead of being disrupted by the 3D printing revolution, UPS has decided to disrupt itself.<\/p>\n","protected":false},"author":2317,"featured_media":20007,"comment_status":"open","ping_status":"closed","template":"","categories":[525,1256],"class_list":["post-18576","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-disruption","category-ups"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"\nWhat Can Brown Print For You? - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/what-can-brown-print-for-you\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Can Brown Print For You? 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