Fast Radius Introduces Virtual Inventory for 21st-Century Manufacturing
Michael Molitch-Hou posted on May 26, 2016 | 8483 views

The industrial revolution paved the way for massive technological progress, but left in its wake an innumerable list of problems that run the gamut from ecological to social woes. At the heart of these issues may be the centralized factory, responsible for mass manufacturing the countless products used by civilization on a daily basis. A shift in this model of production is beginning to occur, however, thanks to the increased adoption of 3D printing by manufacturers large and small, resulting in a new model known as distributed manufacturing.


The Physical Inventory Problem

Maintaining an inventory is necessary for manufacturers and resellers of goods to ensure that demand can be met. That inventory, however, is actually in surplus of what is immediately needed, resulting not only in a cost to all involved, but also in the material waste associated with unsold inventory. Ultimately, a manufacturer spends money on producing, shipping and storing items that may never get bought in the first place, and the environment pays the cost of unused goods that may end up in a landfill, in addition to the energy and consequential pollution created during the manufacturing process. 

3D printing opens up a new alternative to manufacturers that does away with this inventory problem and introduces a completely unique production paradigm only possible in the 21st century. Rather than create a physical inventory, manufacturers can either digitize legacy items through 3D scanning or, when developing new goods, make 3D-printable, virtual versions. Then, when these items are requested by a customer, they can be pulled from a digital inventory and be 3D printed on demand. With 3D printing centers located throughout the world, this can be performed at a hub that is as close to the end-use location as possible. 

Of course, this model of distributed manufacturing does not currently work for all goods that make up the fabric of daily life. At the moment, 3D printing is more or less isolated to the fabrication of individual parts that are incorporated or assembled into a larger design, not the production of functioning electromechanical objects. In other words, it’s possible to 3D print the shell for a smartphone, but there is not yet a way to 3D print the complete smartphone itself. While those technologies are, in fact, being developed—LITE-ON in Taiwan has begun 3D printing electronic circuits directly onto mobile phones as a part of its mass manufacturing process—there is no need to wait around for 3D printing functional goods to be possible in order to begin implementing a distributed manufacturing model. Spare parts and low-volume components may be the ideal entry point for original equipment manufacturers (OEMs) to take advantage of the benefits of 3D printing.


Low-Volume Parts

Speaking with Rick Smith, cofounder of distributed manufacturing business Fast Radius, I learned that a number of OEMs are already looking to address their physical inventory woes with the advantages of virtual inventories. 

“On average, the rule of thumb for the cost of holding physical inventory is about 25 percent the cost of the part per year,” he explained. “There is a significant cost in terms of cost of capital, warehousing space, security and damage. The other major problem with physical inventory is that you’ve got to produce in large volumes to get the unit costs low. This works great when you’re producing iPhones and you know you’re going to sell 10 million of them. But, when all of a sudden you’ve got an essential part and you know you’re only going to need 15 of them per year—maybe it’s a critical part to a machine in a manufacturing operation that doesn’t break very often, but is extremely important when it does break—then it doesn’t make sense to go through the setup and all of the costs related to doing a larger-scale production.” 

Fast Radius has customized industrial 3D printers to print orders autonomously. (Image courtesy of Fast Radius.)
Fast Radius has customized industrial 3D printers to print orders autonomously. (Image courtesy of Fast Radius.)

Smith’s solution is to produce those parts when they’re needed through 3D printing. The investment costs of an industrial 3D printer can be quite high, with metal additive manufacturing (AM) systems easily reaching prices of half a million dollars or more. Smith pointed out that, in many cases, companies that adopt AM systems for in-house use often have those machines set up for specific use-cases with specific materials. For that reason, Fast Radius was launched as a complete 3D printing service provider. Instead of purchasing an industrial system for in-house use, OEMs can simply turn to a firm like Fast Radius to have parts printed on-demand.

“Companies are very frustrated with the inefficiencies of holding physical inventory,” Smith said. “They’re aggressively looking for ways to reduce physical inventory, and you can only make the current system so efficient. So, they're identifying very- low-throughput, low-velocity parts—parts that don't ship very often—and rather than produce those parts in large batches, they’re now shifting toward on-demand production.”


Fast Radius’s Services

Fast Radius is no ordinary service bureau. The firm has customized its array of systems for an automated distributed manufacturing environment. After a customer places an order, it will automatically find the proper printer and begin printing. Once finished, the machine resets for the next print. In turn, Fast Radius requires minimal print management. The firm is also located on the UPS Supply Chain Campus in Louisville, Ky., so that once a job is complete, it can be walked across the hallway to UPS and shipped anywhere in the world, with the possibility of same-day delivery to locations within the continental United States. 

Though the company has systems that print with a wide range of materials from hard, engineering-grade thermoplastics to metals, it has begun reaching out to service bureaus in other locations, expanding both the types of orders it can perform and its distributed manufacturing network. For obscure applications or specialty projects requiring massive volume footprints, Fast Radius can turn to one of its partners. Its partnership with UPS may allow for fast and easy shipment, but in order to fully achieve its vision of distributed manufacturing, it would be necessary to find bureaus in other locales, including countries around the world, to produce parts on-demand and near the end destination.


The Future of UPS and AM

The future of UPS may have a lot riding on its partnership with Fast Radius. Smith told me that in addition to its famous parcel delivery service, “UPS is one of the world’s largest providers of supply chain services.” 3D printing may have some potentially profound implications for design when it comes to the geometry and complexity of printed parts, but in the near term, he sees it affecting supply chains much more drastically. “This may initially affect UPS’s customers by only 0.5 percent or 1 percent in terms of how they manage inventory, but it’s going to affect almost all of their customers, and much more quickly than anyone anticipates. UPS needs to remain knowledgeable and a leader in innovation to be able to help customers think about supply chains differently, especially when you have access to this new technology.”

With UPS holding inventories for other companies in large batches and in small forward-stocking locations all around the world, the shift toward virtual inventories may be a potential threat to their storage services, but it also creates an opportunity for UPS to provide a critical service through Fast Radius. “If you can envision the hub-and-spoke model of forward inventory,” Smith said, “why couldn't you have a hub-and-spoke model of production, using 3D printing to create spare parts exactly where you need them in the exact smaller quantities that you would desire?”

AM may never be a one-stop solution for the production of all parts, with computerized numerical control (CNC) milling still representing a powerful and popular tool for production. For that reason, Fast Radius has its sister service bureau, ZYCI, a large CNC machining operation. At their Atlanta location, the firm will expand to include some industrial AM systems, and, likewise, the Fast Radius facility in Kentucky is in the process of expanding to include CNC machines. 

The centralized manufacturing model of the 20th century may not be done away with soon, but the shift is already under way. To introduce its 3D printing services to potential OEMs, Fast Radius has partnered with about a dozen companies that are looking to make the shift to a virtual inventory. “To start,” Smith explained, “the companies that we’re working with are identifying 1,000 or 1,500 parts that are excellent candidates for on demand production. This may be a small percentage of their overall inventory, but as costs drop precipitously and quality continues to rise over time, these companies know that a larger and larger percentage of physical inventory will be moved to a virtual inventory model.”

If you're interested in making the switch from yesterday’s model of production to tomorrow’s, visit the Fast Radius website

Fast Radius has sponsored this post. They have no editorial input. All opinions are mine. —Michael Molitch-Hou

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