{"id":21072,"date":"2017-11-07T21:52:11","date_gmt":"2017-11-08T02:52:11","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/3-d-printing-at-general-electric-disrupting-supply-chains-and-manufacturing\/"},"modified":"2017-11-07T21:52:11","modified_gmt":"2017-11-08T02:52:11","slug":"3-d-printing-at-general-electric-disrupting-supply-chains-and-manufacturing","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/3-d-printing-at-general-electric-disrupting-supply-chains-and-manufacturing\/","title":{"rendered":"3-D Printing at General Electric \u2013 Disrupting Supply Chains and Manufacturing"},"content":{"rendered":"

In a seismic strategic shift, 125-year-old conglomerate General Electric (GE) transformed the future of its supply chain and manufacturing by completing two acquisitions of additive manufacturing (\u201c3-D printing\u201d) companies (Arcam AB and Concept Laser GmbH) for over $1 billion combined in 2016 [1]. 3-D printing is defined as the action or process of making a physical object from a three-dimensional digital model, typically by laying down many thin layers of a material in succession [2]. By 2020, GE expects to utilize 3-D printing as an opportunity to take out $3 billion-$5 billion in costs from its own manufacturing and supply chain operations in addition to selling additive manufacturing machines and services to help optimize the supply chains of other manufacturers [3]. Without going into the nuance of the technology, it is safe to say 3-D printing in its fully realized state will simplify supply chains, reduce product development cycles, cut down on waste, and radically improve product design and performance.<\/p>\n

GE operates a highly complex supply chain across its seven industrial operating segments (power, renewable energy, oil and gas, aviation, healthcare, transportation, and energy connections and lighting) [4] encompassing hundreds of thousands of products. Procurement and logistics are increasingly complicated functions at GE which introduce bottlenecks, inefficiencies, and overreliance on external stakeholders. To counteract this burdensome trend, GE has invested in 3-D printing which promises to digitize product development, reduce speed to market, and unlock design breakthroughs. These potential competitive advantages are core to GE\u2019s strategy over the next several decades and are paramount to the company\u2019s well-being moving forward.<\/p>\n

In the short term, GE is and has been working to scale its additive manufacturing business via acquisition and internal investment. GE acquired Morris Technologies and Rapid Quality Manufacturing in 2012 [5], Arcam and Concept Laser in 2016, and has invested billions organically in additive technologies for research and development. The short-term benefit comes from designing parts in a simplified manner that can be deployed today, ultimately reducing the cost basis of expensive parts. For example, GE is currently manufacturing an Advanced Turboprop, a jet engine, with 12 3-D printed parts compared with the traditional method of using 855 parts [6]. The Turboprop is expected to be in test planes flown in 2018. This part design reduces complexity, improves performance, and lightens the strain on the global supply chain.<\/p>\n

In the long term, GE is exploring how to expand additive applications to other parts of the business as a revenue source and cost optimization tool. By investing in the technology now, GE engineers are developing expertise to transform how GE designs, produces, and transacts in the future. Additive technology requires less manpower and data transfer in addition to fewer machines and company resources. Mastering the technology can lead to competitive advantages in product design in addition to removing costs in the long run. GE expects to realize $10 billion in revenue from additive manufacturing services (i.e. optimizing others\u2019 supply chains) by 2023 (compared with $2 billion in 2015) in addition to several billion dollars in cost savings in modifying its own supply chain and relying on fewer outside suppliers. The following slide [3] demonstrates GE\u2019s potential to reduce supply chain complexity and improve productivity using additive manufacturing.<\/p>\n

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