Reduce your business risk by locally producing spare parts with 3D printing
Point of View | Last updated: 21 November 2021
Businesses float on all kinds of internal and external risks of different levels. By studying their business environment, firms come up with different strategies to reduce risks, especially the external ones, in order to minimize the chances of having any sorts of problems or crises. However, among all external risks, some of them can be out of the managers’ control while others can be managed.
What kind of external risks can affect your business?
1. Economic risk
The first and the most well-known risk is the economic risk. It can directly affect your business with a change in market conditions. For example, the recent pandemic of Covid-19 disrupted countless supply chains as governments implemented regional lockdowns. Furthermore, the pandemic also led to a global economic downturn that forced countless businesses to stop their operations or even close their businesses due to a sudden and significant drop in their revenues.
If your company doesn’t produce locally and only imports spare parts from foreign countries, the cost of production and materials can easily fluctuate during an economic crisis and this external risk can greatly affect your business.
2. Environmental risk
If you mostly source spare parts from countries that are prone to natural disasters, it can pose a threat to your spare parts supply chain. In addition, environmental actions taken by the governments can also have an impact on your business. For example, the Sweden government imposed a tax break that supports repair, which pushes the population to avoid purchasing new goods and thus become more environmentally friendly. It will no longer make sense for people to throw out old or broken items and buy new ones. Since a lot of new goods were coming from overseas, the Sweden government pushes people to benefit from the local economy by introducing this tax break.
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, crises in other countries such as Brexit, tension in the South China Sea can also negatively impact your business. Moreover, some international trade rules can also have negative effects on your business like the example of countries on which the United States imposed economic sanctions: Cuba, Iran, North Korea, Sudan, Syria. An embargo can have serious negative consequences on the affected nation’s economy. Even in the country itself, like India, embargoes can also be observed between areas.
In addition to that, in May 2018, the U.S imposed 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 and export can vary overtime.
4. Logistic risk
In January 2019, a cargo ship that carried more than 2,800 brand new cars just sunk after colliding with another vessel in the fog-bound English Channel. This kind of logistic risk can also greatly affect your business. Logistic risk is increased with customs. The risk of having goods blocked at customs is a 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, especially in countries like Brazil, where import taxes on goods are 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 helps you mitigate these risks and develop your business?
By producing 3D printed parts locally, some industries can not only reduce some external risks underlined above but also significantly cut business costs. Producing 3D printed parts is not just a trend. It is also an important step towards local production and sustainable business practices.
1. Uncertainties in other countries
The political risk that can complicate your business strategy is avoided. You don’t have to deal with different tax choices or new rules in other countries. With local production of spare parts enabled by 3D printing, you can avoid issues of a part block in a foreign country and disruptions along your supply chain.
2. Customs, Transportation and Time taken for complete process
Local production of spare parts with 3D printing reduces transportation and avoids 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 costs are limited to the minimum cost of transportation in the 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 without much delay, thanks to local production. In addition, the time needed to complete a process of 3D printing can be quite short.
3. Quality Control
Dealing with a domestic supplier makes the communication easier. You will not have time zone differences, long overseas flights, 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 as soon as possible if 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 locally controlling the development and manufacturing process will reduce countless wastes by ensuring each part is fit properly.
As you produce spare parts on-demand, it is now possible to not only drastically reduce your warehousecost but also have a significant and positive impact on the environment.
Locally producing 3D-printed spare parts can significantly reduce some external risks for your business, decrease some costs, and shorten the production process.
Moreover, thanks to 3D Printing, you can easily produce spare parts on-demand. In this way, you can not only reduce all your warehouse costs but also improve customer satisfaction since they can receive quality spare parts much faster, which helps them resume operations or provide faster customer services!
Let Spare Parts 3D help you reduce your business risk with our digital spare parts solution. Contact us now!