How Do AM and Digital Inventory Eliminate Your Supply Risk?

Technical Focus | 2 March 2018 | Last Updated: 21 November 2021

Supply chain is the result of a thin balance between offer and demand. Inventory levels are defined through a trade-off between demand, supply lead time, and the level of acceptable shortage risk to minimize the overall costs. However, most of these optimized models are based on demand predictions, which by essence are false.

So, what’s the worst nightmare of every supply chain manager? Of course, it’s shortage!

Whether you are on the supply side and you suffer from a loss of profit, or on the demand one and feel the pain of  equipment downtime, shortages certainly have heavy impacts on your company.

 The traditional supply chain has such an inherent complexity that shortages happen much more often than you think. Here are some possible scenarios.

–  You flawlessly planned your replenishment but your parts were then held at customs because of some unforeseen issues.

–  You requested for more spare parts and finally received the order a few days before the deadline. As you were examining the parts, you realized that they didn’t reach the expected quality and had to return them

–  Or, your supplier simply chose your competitors over you as they asked for larger orders. 

As the shortage issue prevents you from fulfilling your customers’ demand, your business’ reputation might be jeopardized, revenue stream might be interrupted, and customers might no longer be loyal to you, resulting in unwanted costs or penalties for contractual clauses.  

It then seems quite logical to lower the shortage risk by increasing your inventory levels; however, this might lead to unbearable costs. By experience, shortages can reach up to 10% of the spare parts demand!

Fortunately, Additive Manufacturing and digital inventory provide an alternative solution to avoid immense stocks and stock-out risk: on-demand production!

What is digital inventory?

Digital inventory is like a digital catalogue of all your spare parts. All the spare parts that can be additively manufactured can be stored within the digital inventory. The combination of digital inventory and additive manufacturing makes on-demand production possible. With a simple click, you can order the desired spare parts through the digital inventory when they are requested by your customers. 

How does it work?

First, you must build-up a digital  inventory. This step shall preferably be done before an anticipation of failures, but is also possible in recovery.

Building this digital spare parts catalogue starts from reverse engineering (when needed) and encompasses the definition of raw materials,  production system used, production instructions, and tests for qualification.

Then, once the digital inventory is created, what’s left is the execution of on-demand production. Here, good industrialization and standardization of the production platforms simplify  the work and it becomes “Plug & Print”.

Finally, the ability to produce at the closest location to your factory, in addition to on-demand production,  shortens the transportation time and consequently the lead time and there you are, the perfect supply risk coverage!

Moreover, you can reduce your inventory buffer and tighten your supply chain with smaller batches of 3D printed parts.

Now you  might ask “What about unit price?”.

Well, you shall read our next paper on optimization of long tails TCO!

Because Additive Manufacturing and digital inventory make inventory buffering obsolete and remove any shortage issue, 30% of manufacturers think that the restructuring of supply chains will be the biggest innovation coming from widespread adoption of this technology.

Good things for thought isn’t it?!

Spare Parts 3D supports manufacturers and industrial spare parts users to increase their spares availability by producing them on-demand using Additive Manufacturing.

From parts selection to parts production and delivery, SP3D proposes end-to-end solutions encompassing:

Do you want to know more? contact us!

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