3D printing produces objects as a single piece by building them layer-by-layer; it contrasts with traditional mass production, which usually involves multiple parts that are then assembled. This revolutionary production method has already made significant advances in many sectors in recent years. Medical and dental devices and aerospace lead the way in 3D printer adoption. However, the much larger industrial machinery, automotive and consumer products sectors are currently responsible for the lion’s share of worldwide investments in 3D printers.
Companies in many industries are likely to adapt their business models in the coming years to accommodate greater use of 3D printing. However, until there are sufficient technological advances, 3D printing will not herald the end of mass production or prompt the widespread reshoring of supply chains, according to the new ING report 3D printing: a threat for global trade?.
“3D printing can best be described as marginal at the moment,” says Raoul Leering, head of international trade research at ING and author of the report. “It is uncertain to what extent and when 3D technology can be used for mass production. The cost of mass production with 3D printers has to be able to compete with traditional production methods. At the moment, 3D printing is best for customisation, for example of sneakers, or for prototyping of cars. Once mass production is possible using 3D printers the effect on the world economy and especially on cross-border trade will be huge.”
The cost of mass production using 3D printers depends to a large extent on speed. “The sooner 3D printers will be able to print at high speed, the sooner 3D printing’s cost advantages of lower labour, transportation and storage costs will make it economically viable,” says Leering. He points out that there have been significant advances in the speed of 3D printing, which could pave the way for greater use in manufacturing. “An advanced 3D printing technique, called high speed sintering, is capable of mass-producing up to 100,000 small components a day,” Leering explains.
Quality also continues to be a barrier to mass production in some cases. For example, printed metal products sometimes contain holes; other products require accuracy that 3D printers cannot currently deliver. Leering’s report quotes Adwin Kannekens, sales director at metal machining company Wilting, who forecasts that in the long run 40% to 50% of the company’s revenues will come from work done with a 3D printer. However, Kannekens says that it will take time to improve accuracy. “It took 3D printers 10 years to raise accuracy by a factor [of] five, so you can imagine that increasing accuracy by a factor [of] 10, as needed to serve [our clients], will also take many years.”
Once the technological hurdles are overcome and 3D printed mass production is economically viable, 3D printing will have a huge impact on the world’s industrial and trade landscape. As well as using fewer raw materials, 3D printers use much less labour, reducing the need to import intermediate and final goods from low wage countries. Companies will benefit from 3D printing in a number of ways. Inventory costs will fall because 3D printing has fewer economies of scale than traditional production methods so there is less incentive to produce large quantities. Consequently, there will be less need for storage of final products. Transport costs will also decrease because there will be less transport of intermediates and because 3D printing will bring production closer to the consumer.
The more widespread adoption of 3D printing at some point in the future will therefore have large negative effects on international trade. Investment in 3D printers has grown by 29% over the last five years. Tentative calculations by ING show that if this continues, 50% of manufacturing would be 3D printed by 2060. If investment growth in 3D printers doubles after five years, this milestone will be reached by 2040. A reduction of half the trade in manufactures would cut world trade by 40% in 2040 and 23% in 2060 (the decline is due to the decline in importance of manufacturing in GDP and trade over time).
Companies considering the potential impact of 3D printing on their business models need to be aware that as home printing machines become more sophisticated and produce a higher quality output, so-called prosumers – consumers who design or customise products themselves – will become a competitive threat. “For the short to medium term, the skills needed to work with a 3D desktop printer, the high price of 3D printers and the rather expensive raw materials are impediments for many consumers to turn themselves into prosumers,” notes Leering. “In time, these hurdles can be overcome however, because 3D printers will become cheaper and the high prices for the raw materials will lead to more suppliers, hence lower prices.”