During September 2015, UPS announced the installation of 100 3D printers at its central hub facility in Louisville, and in the last week, the company has built upon this by announcing a major software collaboration with SAP, aiming to create a ‘digital manufacturing network’.
In partnership with the 3D printer provider Fast Radius, in which UPS holds an equity stake, the two companies will produce products from 3D printers in 60 locations around the US. The system is mainly business-oriented and only 3D prints in the industrial grade ABSplus.
UPS has been experimenting with additive manufacturing for a while now, offering 3D printing at a number of its UPS Stores since 2013, however this new system represents the company’s first major foray into business-oriented solutions. For the largest parcel company in the world, the move represents a hedge against the possibility that the Express industry may be disrupted in the same way that email has decimated postal services.
It is notable that Fast Radius is chiefly involved in providing businesses with parts manufacturing services. Service parts logistics for the industrial, aerospace and automotive industries, among others, is big business for UPS, with the company operating a network of 1,000 forward stocking locations worldwide. These facilities exist as a rapid response network for spare parts and other time-critical products, and their utility is threatened by the rise of 3D printed solutions, which could eliminate the requirement for stocking excess inventory.
As such, the potential solution for UPS is to co-opt this new technology before it becomes a significant threat, taking on an increasing role in light manufacturing though additive manufacturing near to the customer. As the UPS CIO said of the subject, “we saw the capability of a logistics company to be challenged on one side but on the other be an enabler”.
The software brought to this system by SAP is significant in smoothing processes for the placing of orders, and allows users to automatically determine if designs are 3D viable from both technical and financial perspectives. It is expected that the service will be established in the summer, and fully online by Q1 2017.
Whilst UPS is highly optimistic as to the potential of 3D printing, rival integrator DHL has a very different perception of the technology. Whilst he admitted that additive manufacturing has an opportunity in spare parts, the leader of the company’s trend research team recently told the Wall Street Journal that, “We see a risk, but not for the mass of products”, further declaring, “We don’t need to be scared of this technology”.
Nonetheless, at the recent Multimodal conference in Birmingham, the former Chairman of the UK Government’s Transport Systems Catapult asserted that it is conceivable to envision a future where 3D printing disruption results in warehouses limited to the storage of perishables and big-ticket items. Will Whitehorn said that as a result of both 3D printing and warehouse automation, “You are going to see a completely different type of warehouse in operation”.
One thing is for sure, UPS are not the only company looking to exploit this technology to insulate their business from its potentially disruptive impact. Notably, Amazon has a patent on a 3D printing system placed within a delivery vehicle, which could significantly reduce capacity pressures on the company’s fulfilment centre network if enough products were to be printed.
It remains to be seen how the development of 3D printing will play out but, in an industry where the word ‘disruption’ is being continually thrown around, the move by UPS seems like a prudent measure to ensure the company stays on top.
For a more detailed review of the impact of technology like 3D printing on the express logistics market please take a look at Ti’s Global Express and Small Parcels 2015 report here.
Source: Transport Intelligence
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)