6th Copenhagen Supply Chain Management Summit 2012 - Nomination for cand. merc. SCM Best Thesis 2012-14

DEMYSTIFYING THE INDUSTRIAL EMERGENCE OF 3D PRINTING – Supply chain adoption propensities and impact on DSV A/S as a logistics service provider

Frederiksberg, November 6, 2014

Kirsten Weibrecht Kristensen & Line Hansen Supervisor: Günter Prockl Sparring partner: DSV A/S

What is 3D printing?

Personal

Types of printers • Difference between personal and industrial 3D printers: print quality, size and price • Layer upon layer in an additive process

Industrial

• An object is either photographed by a 3D scanner or designed as a three-dimensional image in a computer software program • The 3D file is known as a Computer Aided Design (CAD) • The CAD-file slizes the object into flat 2D layers – the thinner the layer, the more detailed the object

Types of materials • Filament and powders • Plastics and metals Post-processing • After printing process is completed, the 3D printed object is put into a bath of chemicals to dissolve any extra material or broken away by manual force • The object is finished • New and better 3D printed objects have appeared within past 2 years

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Introduction and summary

DSV's enquiry

The interest in 3D printing has increased substantially, and recently reached the executive corridors at DSV, who wanted to understand their exposure to the effects of 3D printing diffusion and increase their organizational preparedness

3D print problematization 1903

“the horse is here to stay, but the automobile is only a novelty – a fad”

Link to LSP impact Producing unique and complex structures – in one

Reactive (JIT) production

Reduced supply chain complexity

Local (decentralized) production

1977 “there would be no reason why any individual would have a computer in his home”

Individualization

Acceleration

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Management framework - ensuring a cohesive structure to guide research How will the evolution of the 3D printing market affect DSV’s role as a logistics service provider?

Main research question

1

3

2

Sub research questions

What is the roadmap to the industrial emergence of the 3D printing market?

What are the characteristics of supply chain adoption propensities, and how can they be structured?

How will 3D printing impact DSV’s customer value proposition?

Theoretical framework

Technology roadmapping and scenario analysis theory

Supply Chain configuration theory

Customer value proposition theory

Empirics

 15 interviews and 1 innovation workshop with industry experts and DSV managers  Articles, reports, journals to provide a global, multi-industry outlook  Quantitative revenue data by customer segment from DSV

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Key findings sRQ1 - immature industry, but growing exponentially Roadmap analysis

Scenario analysis Consumer view

Historical and future 3D print market development

High

3 Factory in a box

Technical Advancemen t

Technical Advancemen t

High

Enterprise view

2 Print shop 2.0 1

Low

Slow printing speeds



Selection of materials



Underdeveloped supply chain



Lack of AM work force



Industry-conservatism

2 Niche production 1

Low Low



JIT manufacturing

Engineering default

Hype crash

Key growth barriers identified ahead:

3

User Engagement

High

Low

User Engagement

High

“Uploading… 80%... 90%... 100%.” Huan Nguyen put away his phone that he had used to 3D-scan his foot and inspected the shoe design that now appeared on the screen before him - customized to fit him perfectly. No, he wanted green mesh instead of yellow, and he wanted his name written on the bottom of the sole. Now it was perfect, and he initiated the print job - the shoe would be ready this afternoon, just in time for his evening run. “What are you printing?”, yelled his mom, Lin Nguyen. “New shoes”, he replied. “Make sure you are done by this evening, I am printing new garden furniture for the terrace overnight.” “Factory in a box”, Optimistic consumer scenario

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Key findings sRQ2 - difference in supply chain propensities to adopt 3D printing

Dimensions determining adoption propensity to adopt 3D printing:

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Key findings sRQ3 – future logistics needs look different 

Customers with high propensity to adopt 3D printing approx. 12% and incl. e.g. health care, aviation & automotives



Customers with medium propensity to adopt 3D printing approx. 57% and incl. e.g. retail, electronics & manufacturing

Cross continential transportation (DSV Air & Sea division)

Regional transportation (DSV Road division)

Inventory (DSV Solutions division)

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• • •

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Key recommendations

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Re-shoring Supply Chain links e.g. part components China Express air transport e.g. spare parts

Digital warehousing

JIT raw material deliveries Parcel deliveries to consumers Express deliveries

Distribution and inventory of raw materials

• • •

Component, WIP & finished goods inventory 3D raw material inventory Handling Digital (3D-file) inventory

3D printing integrated with distribution centers

Supply chain optimization consulting (incl. 3D print)

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Why the thesis should achieve the award for best MSc in SCM Master Thesis 2014 1

The thesis answered the case company's question by applying appropriate tools to arrive at key recommendations

"Jens Bjørn Andersen, CEO of DSV A/S, was profoundly inspired by the findings of the thesis to inform strategic decision-making [...] He believed that these insights would serve as highly valuable input for DSV’s future orientation"1

Professionalism

The thesis was structured according to a clear line red line of argumentation and used rigorous methodology

"The management found the general level of the thesis and presentation to be impressive, as well as exhibiting a high degree of professionalism in methodology, findings and recommendations"1

Value adding

The thesis established a link between the emergence of a disruptive technology and supply chain impact

"Jens Lund, CFO of DSV A/S, would like to emphasize the evident quality of the thesis’ methodology, structure and data collection that enabled the creation of a strong tool to qualify predictions about the future, which can be used to enhance DSV’s strategic preparedness"1

Application oriented 2

3

4

Innovative and risk taking

• 3D printing is a novel and hyped technology with little academic research within business and social sciences • Extension of research to derived effects for an LSP is not obvious and therefore proved an ambitious undertaking • Future-oriented analysis meant high uncertainty and unknown development offering high probability of error

5

Global reach

• The thesis investigated aggregate effects of 3D printing applications for all industries on a global scale, as DSV does not serve one type of industry, but covers the whole range in 75 countries as a global supplier of transport

1. "Statement of successful master's thesis collaboration", DSV Management, Sep 2014 06 November 2014

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Thank you for your time - any questions?

Authors Line Hansen [email protected] Kirsten W. Kristensen [email protected]

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