How 3D printing can reduce supply chain complexity in the CPG industry

By Pierfrancesco Manenti | March 15, 2016 | 0 Comments

Supply ChainPower of the Profession

Would you like to sharpen your eyesight? Record what your eyes see and share it on Facebook? Well, no problem. Just wait until 2027 and you can. This promise comes from research studio Mhox, which hopes to market 3D printed synthetic eyeballs to heal, enhance and advance ‘standard’ eye functionality. This is just one example of how the latest developments in 3D printing are making the case for highly personalised consumer products possible.

EYE, 3D bioprinted sight augmentation

Today, personalised products mean supply chain complexity

Consumers are no longer happy with the same, mass-produced items; they want personalised products that are newer, better and cooler than anybody else’s. As a consequence, consumer packaged goods (CPG) organisations are striving to launch more and more new and personalised items. The result? An exploding number of SKUs and dramatically complex supply chains.

In my daily interactions with the world’s largest CPG organisations, it emerges that supply chain leaders are struggling to master this complexity. The Vice President of Supply Chain at one of the world’s largest food organisations recently told me that its decentralised supply chain enables it to better tailor products to meet local demand. The company is pushing this model further as it’s their key differentiator. However, mastering the growing complexity of regionally organised supply chain is becoming a daunting task. Similarly, the Executive Vice President of Supply Chain at a large food and snack company told me the growing complexity and costs of its supply chain are driving more aggressive operating margin targets, with supply chain accounting for the largest savings: something apparently not achievable by internal, historical benchmarks.

How can CPG organisations master all this complexity?

Looking a few years ahead, I believe that 3D printing can be one of the ways CPG organisations can master complexity. Until now, 3D printing has largely been used for prototyping and, more recently, to manufacture highly complex, low volume parts in aerospace. Between these two applications, however, lies a growing opportunity.

In Sculpteo’s 2015 state of 3D printing report, more than 1,000 respondents across several industries reported that the ability to offer “customised products and limited series” is the emerging driver for 3D printing adoption by 2020, second only – but close – to today’s mainstream “accelerating product development”. Consumer goods industries are driving this trend, according to nearly 50% of responses (see figure below).

Offering customised and limited series products: An emerging driver for 3D printing by 2020

3D printing is likely to change “patterns of consumption” and shifts “surplus from consumers to producers”, meaning companies won’t be left with unsold inventory, as discussed in a report from McKinsey. These capabilities are attractive to CPG organisations fighting complexity and, indeed, their growing interest in 3D printing is already evident in today’s rising adoption (see figure below).

Demand for 3D printing continues to grow

Experimenting with 3D printing to determine the use case

Traditionally, CPG organisations have held back on 3D printing as the use case was not fully understood, particularly because of their typical high-volume, low-mix production environment. In our latest Future of Supply Chain report, which discusses the implications of emerging technologies on supply chain strategies, only 14% of food and 34% of CPG organisations considered 3D printing disruptive and important today (compared to 57% in aerospace). However, 42% consider 3D printing interesting, although the use case is still unclear – particularly in retail, healthcare and food (see figure below).

3D printing: interesting, but unclear how to use it

Survey data from PwC confirms that nearly 30% of organisations are currently experimenting with 3D technology to determine how it might apply to their business. Some recent CPG cases include:

  • Food – Pasta maker Barilla is working on a 3D printing technology to make custom-designed pasta shapes, which will enable consumers to show restaurants their desired pasta shapes, stored on a USB stick. Similarly, chocolate manufacturer Hershey lets its consumers interact with a library of 3D graphics on iPads to get a number of chocolate designs printed in 3D.
  • Fabric and apparel – Making shoes that perfectly fit runners’ feet seems like the competitive battlefield for sportswear makers today. Like Nike and Adidas before, Under Armour has just launched a new trainer printed in 3D. It’s only an initial short run of 96 pieces, retailing at $299.99, but it’s an important move to experiment with the technology and the business case.
  • Toys – Toy manufacturer Mattel is bringing 3D printing to the hands of its young consumers, with an updated version of the iconic 1960s ThingMaker. This desktop 3D printer will be sold from October 2016 at $299.99 and will include an app from Autodesk that enables kids to navigate and customise a library of 3D drawings of action figures and jewellery.

Whether you work in food, apparel or any other consumer industry, you now have a solution to ease your supply chain complexity. 3D printing is set to open new opportunities for CPG organisations offering customised products and limited series, and puts production in the hands of the consumer.

Taking full advantage of this postponement opportunity isn’t a technology issue, it’s a call for a completely new business model. Start experimenting now!

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