By Jack Peat, Editor of The London Economic
How a small evolutionary step forward could monumentally disrupt the global supply chain.
Cheap labour was once the stalwart of the manufacturing industry, but new technologies driven by knowledge over manpower are significantly disrupting the supply chain, breathing new life into ‘made in Britain’.
3D printing, contrary to some misguided expectations, doesn’t mean pop-out holiday pics or three dimensional family photos on a canvas. The printers produce objects of any shape, on the spot and as needed, and although their usage extends beyond traditional printing, their design is actually a small evolutionary step up from it.
Rather than spraying toner on paper, 3D printers put down layers of something more substantial (such as plastic resin) until the layers add up to an object. First conceived over ten years ago by the likes of Professor Neil Gershenfeld and other great MIT minds, the technology is nearing an age where it could completely tip the global supply chain back towards the west, after many years of leaning comfortably towards the east.
DIY and customisation
Computer Aided Design is commonplace in professions such as engineering and architecture, where ideas and visions are seamlessly transformed into material constructs with minimal hassle. In manufacturing, layers of plastic solidified by lasers, welders or sinterers take the object you drew on the screen and transform it into complex, intertwined three dimensional reality, which is completely customisable and requires great minds rather than able bodies.
As the technology expands and prices drop, the first foreseeable implication is that more goods will be manufactured at or close to their point of purchase or consumption. Goods that once required large, centralised bases will drift more towards local stations within quick reach of the consumer, hence eliminating shipping costs and buffer inventories.
The Harvard Business Review offers an example of the car industry. Whereas today cars are made by only a few hundred factories around the world, they might one day be made in every metropolitan area with parts constructed at dealerships and repair shops rather than being shipped from abroad. Customisation is also like to become more mainstream as designs are tailored to meet the demands of consumers with a few simple tweaks to the software.
One of the really big implications of 3D printing is that it trumps old manufacturing principals based on economies of scale in favour of creativity and know-how. In a knowledge-based economy such as the UK, home to a large tertiary sector and some of the best universities in the world, this could potentially breathe new life into British-based goods.
I recently talked to a private equity broker about the impact of globalisation on the manufacturing industry under the impression that the lion’s share of investment he deals with would be outward-bound, rather than flowing into the UK. The reality, however, is somewhat different.
My perception of the manufacturing industry, like many others, is based on evolutions of Henry Ford’s production lines which have been the model for manufacturing for the past 100 years. But that predominance will soon be replaced by something much more individual, much more local, much more flexible.
China has grabbed outsourced manufacturing contracts from every mature economy by pushing the mass-manufacturing model to its limit. But this model won’t serve as well when new technologies come to the fore, and few managers raised in a pro-producer climate have the consumer instincts to compete on customisation.
The UK, in its place, will seize upon its own balanced consumer economy to make manufacturing pay, and could even start filling some of the boats that currently arrive full from the Far East and leave empty. Double digit growth in the east, fuelled by cheap labour and mass numbers, has served its time. Henry Ford’s production line will soon be replaced by more flexible models, which could tip the scale back in favour of the west.