3-D printing and other additive manufacturing technologies, which digitize and reproduce tangible goods will impact how you decide where to locate a DC. Decentralization of production is a trend being fueled by an increase of customization options toward the end of the manufacturing cycle. The size of manufacturing plants will become smaller and move closer to where consumers live. This will have a significant change on distribution of goods because you won’t have as much long haul.
Digitization, decentralization, and omni-channel retail: The future of supply chains
With customized 3-D printing the number of stock-keeping units (SKUs) a company provides will increase. However, it could also reduce the total inventory level for certain products like spare parts, With 3-D printing, instead of keeping them in stock, you have a machine that can make them on demand. The total quantity of inventory will decrease while the number of unique items will dramatically increase.
Impact of Macro Trends on Supply Chains: Digitization of Products
The changes taking place in digitization, specifically additive manufacturing, could have tremendous impacts on the entire distribution network.The digitization of products (necessary for the use of additive manufacturing) will disrupt the dominant design of distribution. While not a huge trend yet, additive manufacturing is starting to be used in direct part manufacturing. In the future the ability to make almost one-of-a-kind customized products on demand could, reduce the demand for mass-produced products. As a result there will be less long distance shipping of finished products and a shift towards transporting the base stock materials used by 3D printers.
Digitization and the Supply Chain
Dan Gilmore from SCDigest brought up the discussion of whether digitization will also eliminate the supply chain for an increasing breadth of products? Nick LaHowchic who wrote a book “Start Pulling Your Chain,” discussed with Dan Gilmore on SCDigest that “Digitization brings into question the fundamental commandments of how we compete in business” Making a sports analogy, “Once in play, the knowledge ball is everywhere.[Supply Chain] team members take turns leading in a networked field, and the playbook is continually referenced for context so we can adjust the plays in real time.”