How 3D printing locally can reduce your business risk?
Point of View | 18 April 2019
Businesses float on risks, some big some small. Some internal while some external. In the way to reduce critical situations, firms tend always to reduce risks and especially external risks by studying their business environment. But in all external risks, some of them can be out of their control and some be tamed.
What kind of external risks can affect your business?
1. Economic risk
The first risk and the most well-known risk is the economic risk. It can affect directly your business with a change in market condition. As an example, an overall economic downturn, a financial crisis, could lead to a sudden and unexpected loss of revenue for you firm.
If your company doesn’t produce locally and is used to import from foreign countries, the cost of production and materials can easily fluctuate during an economic crisis and this external risk can affect your business.
2. Environmental risk
More than natural disasters than can become a huge external risk if the production is based in the country affected, they can also be environmental actions taken by government that might affect your business. For example, since 2017 in Sweden there is a tax rebate on repairs pushing population to avoid new goods purchases and become more environment friendly. It will no longer make sense for people to throw out old or broken items and buy new ones. However, a lot of new goods were coming from overseas. By introducing this tax breaks, Sweden government pushes people to profit from the local economy.
3. Political risk
Political risk results from various factors that can negatively affect a company’s income or complicate its business strategy. These factors can include external issues such as high interest rates and social issues.
Also, crisis in other countries such as Brexit, tension in South China Sea can badly impact your business. Moreover, some inter country trade rules can generate negative impact on your business like the example of the embargoed countries by the United States: Cuba, Iran, North Korea, Sudan, Syria. A trade embargo can have serious negative consequences on the affected nation’s economy. Even in the country itself, like India, intra-embargos can be observed between areas.
In addition to that, in May 2018, the US is to impose tariffs on steel and aluminium imports from key allies in Europe and North America. It is an example which greatly illustrates that taxes and custom laws for import-export can vary overtime.
4. Logistic risk
In January 2019, a cargo ship which carried more than 2,800 brand new cars just sunk after colliding with another vessel in the fog-bound English Channel. In this way, logistic risk also exists and can affect your business. Logistic risk is increased with customs. The risk of having goods blocked at customs is huge problem in Africa and in countries where the level of corruption is high, but it is not only a risk but also a constant difficulty for instance in Brazil where import taxes on goods is high.
Then, transportation costs are now becoming an incredible barrier to global trade, and global supply chains must adapt to the evolving landscape.
How 3D printing locally help mitigate these risks and develop your business?
By producing 3D printing parts locally, some industrials solve the problems of certain external risks underlined above and make savings. Producing 3D Printing parts is not just a trend, it is also an important step towards locally production and so sustainable business practices. 3D printing develops your ability to maintain growth by reducing some external risks.
1. Uncertainties in other countries
The political risk that can complicated your business strategy is avoided. You don’t have to deal with different countries tax choices or new rules. In this way, you have no risk to be impacted by an issue of a part block in a foreign country and avoid a hole in the all operation of your supply chain.
2. Customs, Transportation and Time taken for complete process
Spare parts which are produced locally, reducing transportation, avoiding custom clearance & shipping risks. The transportation cost caused by the importation is totally removed. You will have no more custom costs for production and your transportation are reduced to the minimum cost of transportation in a local area.
Moreover, with 3D Printing you don’t have to wait for overseas shipments or hold-ups in customs. You can have the part you want in a minimum delay thanks to local production. The time taken for complete a process of 3D Printing can be very short.
3. Quality Control
Dealing with a domestic supplier makes the communication easier. You will not have time zone difference, long overseas flight and there is a better understanding of the specifications of your product because there are no more language barriers and so your quality is better controlled.
Also, during the manufacturing process, some quality issues may arise, or you will want to customize your 3D spare parts. With the personal connection you have with a domestic supplier or manufacturer, you will be informed if one day an issue occurs, and solutions can be determined quickly. This keeps production moving at a swift pace and ensures that the product meets all your customers quality standards.
4. Green and socially responsible
Simplifying and controlling locally the development and manufacturing process will reduce thousands of wastes by ensuring each part is fit properly with your wish. You only produce on-demand spare parts. There are warehouses upon warehouses full of obsolete inventory and rejected spare parts. With 3D printing and on-demand production, it is now possible to reduce drastically your warehouse cost but also to have a significant and positive impact on environment.
Using 3D printing locally can significantly reduce some external risks in your business, make cost savings and cut long time production process. Moreover, thanks to 3D Printing you can easily produce spare parts on-demand. In this way, you reduce all your warehouse cost, but you also have direct positive customers reactions because they get direct improvement of their operations!