By LT Jason T.

Ray, SC, USN

ost people were introduced to

the concept of Additive Manufacturing (AM) for the first time
during President Obamas 2013 State
of the Union Address. This technology,
more commonly referred to as 3D printing, is believed by most to be in its relative
infancy. What people dont know is that
it has been developing for the past three
decades and is just now starting to garner
the attention it deserves for the impact it
will have on manufacturing operations
and traditional supply chains.
My first encounter with 3D Printing
was 15 months ago on deployment to Bahrain. While reading New York Times best14 |

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seller, Abundance: The Future is Better Than

You Think by Dr. Peter Diamandis (Chairman and CEO of the X PRIZE Foundation) and Steven Kotler (bestselling author
and science journalist), I was introduced to
the technology as one of several that have
the potential to solve the worlds greatest
problems. They explain that, Suddenly an
invention developed in China can be perfected in India then printed in Brazil on
the same day. (LOC 1369 Kindle)
Working in the supply office of a US
Navy Minesweeper helped me realize the
vast potential that could be unlocked if
we had access to a 3D printer on the ship.
Assuming we could print enough parts to

October 2013

justify the initial investment in the technology, we could save time and money on
transportation costs, benefit from skilled
technical distance support, reduce opportunity cost (the cost incurred when we
dont execute), and increase overall mission readiness. The idea of not having to
suffer long lead-times for one-off production runs of legacy parts, items no longer
provided through the Navy stock system,
intrigued me and I began to investigate the
history and capabilities of this technology.
Inventing the 3D Process

In 1983 Chuck Hull invented Stereolithography, a process that uses an ultravi-

olet laser to cure a photopolymer resin one

layer at a time to build a three dimensional
object. He subsequently founded 3D Systems in 1986. Over the past 30 years, the
technology has been steadily evolving to
its current state.i Some would mistakenly
take this relatively slow evolution coupled
with the current capabilities and limitations to mean that the technology still has
a long way to go, but others (who understand the concept that supports Moores
Law1)ii realize that we have just recently
reached the tipping point. In a March 27,
2013 Forbes article, TJ McCue quotes
Terry Wohler, a widely recognized expert
on the AM industry, explaining that:
Low-cost 3D printers affect both the
professional and consumer markets.
The increased sale of these machines
over the past few years has taken additive manufacturing (AM) mainstream
more than any other single development. 3D printers have helped spread
the technology and made it more accessible to students, researchers, do-ityourself enthusiasts, hobbyists, inventors, and entrepreneurs.iii
In an effort to gain a greater understanding of the true potential locked inside 3D printers, I ordered an Ultimaker
Fused Disposition Modeling (FDM) 3D
Printer kit ($1800). After 6 weeks of
waiting, it arrived in the mail and I built
it in about 20 hours in my living-room.
FDM is a process where the printer
moves a controlled temperature nozzle
attached to a plastic extruder around a
three dimensional grid and prints thin
layers of molten plastic to build a 3D object layer-by-layer.
Trial and error quickly demonstrated
that FDM was not going to be producing industrial-grade consumer-ready
parts any time soon. Additional research
led to the discovery that Selective Laser
Sintering (SLS) and Direct Metal Laser
Sintering (DMLS), though drastically
more expensive, have significantly greater
potential for industrial manufacturing applications. These processes use a laser to
build three dimensional objects by sintering (melting) raw material in powder form
(ABS plastic, titanium, tungsten carbide,
ceramic, etc.) layer-by-layer, sometimes
only microns thick at a time, depending
on the desired resolution of the object.
One of the benefits is that little or no
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LT Rays Ultimaker Fused Deposition Modeling (FDM) 3D printer after having printed a model of
an Aircraft Carrier. (Image provided by Jason T. Ray.)

Mojo Desktop Fused Deposition Modeling (FDM) 3D printer with an ABSplus prototype model.
(Image provided by Stratasys.)

structural support is needed for complex

objects. Each sintered layer is surrounded
by unsintered powder providing support
for any difficult angles the object may
have. When complete, the unsintered
powder can be immediately reused to
build another object thus eliminating all
waste in the production process. By way

October 2013

of development and strategic acquisition,

three primary producers of these systems
have risen into the spotlight: 3D Systems
(NYSE: DDD), Stratasys (NASDAQ:
SSYS) and Ex One (NASDAQ: XONE).
I wasnt the only one thinking about 3D
printing. In May 2013 Staples was the first
major US retailer to announce the availabili-

ty of 3D printers, featuring the Cube desktop 3D Printer from 3D Systems ($1299),

for purchase online and in their stores, making the technology even more attainable for
in-home use and exploration.iv In an effort
to compete with 3D Systems Cube, Stratasys announced on June 13, 2013 that it
had completed a $403 million acquisition
of leading desktop 3D printer manufacture,
Makerbot. The sale also included Makerbots online website Thingiverse.com, which
boasts the largest collection of downloadable digital designs.
More recently we have seen these desktop consumer grade FDM printers show
up on popular e-commerce sites like Amazon and SkyMall. Moving this technology
into individual consumers homes represents a quantum leap for the 3D printing industry. Though FDM is not geared
towards industrial-grade parts production,
giving individual consumers familiarity
with the processes that surround 3D printing will create a launch pad for the arrival
of cheaper, more advanced SLS desktop
consumer-grade printers. The next iteration of these printers is destined to hit the
market place in the next 12 months when
key patents begin to expire early in 2014.
The 2013 Wohlers Associates report, Additive Manufacturing and 3D Printing the
State of the Industry, projects that:
The industry is expected to continue
strong double-digit growth over the
next several years. By 2017, we believe
that the sale of 3D-printing products
and services will approach $6 billion worldwide. By 2021, we forecast
growth to reach $10.8 billion. It took
the 3D printing industry 20 years to
grow to $1 billion in size. In five additional years, the industry generated

its second $1 billion. It is expected to

double again, to $4 billion, in 2015.v
Investors in 3D Processes

The technology has also received attention

from producers and designers for its ability to rapidly generate complex, small-scale
prototypes and bring two-dimensional
Computer Aided Design (CAD) images
to life in a fraction of the time normally
required by traditional manufacturing
methods and supply chains. Two companies that have leveraged this technology in their business models, Proto Labs
(NYSE:PRLB) and Shapeways, offer faster
distribution of finished products and prototypes to customers by reducing production lead-times. Logistics companies are
also starting to realize the potential this
technology presents. On July 31, 2013,
UPS distributed a press release announcing it would be the first nationwide retailer
to test 3D printing services in-store in an
effort to meet the demands of small businesses seeking access to the technology for
prototypes, artistic renderings, and promotional materials.vi Now that a manufacturer can rattle off several iterations of
a product prototype without being held
back by the high-cost of prototypes, it can
deliver superior products to the market
more quickly. This also reduces the barriers
to entry for small businesses and promotes
greater competition in the marketplace.
To show just how serious some companies are taking this technology, on November 20, 2012 GE Aviation announced
the acquisition of privately owned 3D
printing company, Morris Technologies
and sister company Rapid Quality Manufacturing. GE plans to use their DMLS
process to produce lighter, more intricate

jet engine parts to meet growing production rates over the next five years. Morris
Technologies and Rapid Quality Manufacturing are parts of our investment in
emerging manufacturing technologies.
Our ability to develop state of the art
manufacturing processes for emerging
materials and complex design geometry
is critical to our future, explains Colleen
Athans, general manager of GE Aviations
supply-chain operations.vii
Understanding the Supply
Chain Current and Future

When thinking about this technology in

reference to the supply chain its clear that
the supply chain isnt going away; its just
going to change and become more effective. During a recent interview with Irv
Varkonyi, Professor in Supply Chain Certification at APICS, we discussed the tremendous impact 3D printing could have
on the traditional supply chain. Mr. Varkonyi hypothesized that 3D printing will
lessen the burden placed on the Sales and
Operational Planning (S&OP) processes.
This will take place through balancing supply and demand by reducing dependence
on forecasting as 3D manufacturing reduces the lead time to produce final products
in response to consumer demand and eliminating obsolescence of expired products.
In manufacturing we build things based
on how to get the lowest unit cost and benefit from economies of scale. He explained,
Often the lowest unit cost is nonresponsive or does not reflect actual customer
needs, rather it is a product of S&OP calculations and anticipated demand.viii
During our conversation, Mr. Varkonyi
referenced the book publishing industry
as an example of one that experienced

Rapid prototypes created using 3D print technology. (Images provided by Stratasys.)

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October 2013

The Statratsys, Fortus 900mc one of the most powerful Fused Deposition Modeling (FDM) Systems
with a large build area. (Image provided by Stratasys.)

drastic technological change due to the

invention of the Kindle and other e-reader devices. If you think about the Kindle
as a 3D printer you can see the story start
to unfold. He outlines that:
It used to be that when a book was
printed thousands of copies were printed at the same time and distributed to
book stores, leaving any errors uncorrectable. Now with the dominance of
e-books an author can go back into his
work and make corrections, so that all
future copies of the book sold reflect the
change. The consumer meanwhile never
has to leave his or her home to purchase
the fully digital product through the ereader device. 3D printing will provide
manufacturers this same flexibility in
prototyping, production and delivery.
This example highlights the potential
course and impact the technology will
have. 3D printing creates a future where
we start to think about hardware in the
same sense as software. It is no coincidence that e-commerce sites like Amazon
have begun building large server farms
and cloud-based networks. They are moving in this direction so the infrastructure
will be in place when the technology demands it. In the future they may become
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more information based rather than supply chain oriented companies.

3D printing is one of three transformational technologies highlighted in a recent executive report, The New SoftwareDefined Supply Chain: Preparing for the
Disruptive Transformation of Electronics
Design and Manufacturing, by the IBM
Institute for Business Value. In the report
IBM explains that the emerging technologies of 3D printing, intelligent robotics,
and open source electronics will create a
manufacturing environment that is driven
by digital data. The result: a reconfigured
global supply chain will emerge in the
coming decade. It will radically change the
nature of manufacturing in the Electronics
industry, shifting global trade flows and altering the competitive landscape for both
enterprise and government policy makers. They go on to explain that, Despite
the enormous press coverage that technologies like 3D printing have achieved, we
found that manufacturing leaders remain
ill-prepared for these transitions.ix
In order to understand the transition
and benefits that will come from the implementation of 3D printing, we have to
examine the traditional supply chain and
break down its individual pieces and costs.
Simply put, in a system of mass produc-

October 2013

tion, companies are striving to achieve the

lowest possible unit cost of production.
This is often done through standardization
of subparts across product lines and industries. These cheap goods are transported
from the manufacturer to a warehouse
leaving a potentially large carbon foot
print. The items are then stored, inventoried and managed in a warehouse until
being distributed to consumers in response
to actual demand. In private industry,
items that are not distributed go through
a cycle of markdowns and costly marketing campaigns, until no longer needed, or
it is no longer cost effective to store them.
They are then disposed of at a cost to the
producer, representing obsolescence costs,
in the process we know as reverse logistics.
Assuming S&OP is effective, transportation cost, storage time, and obsolescence
will be minimal. However, this is not always
the case, as production quantities are often
dictated by the goal of achieving the greatest economy of scale, rather than actual demand. Customized parts and prototyping
costs are are exponentially higher than standard productions and are where consumers
face long lead-times, costly one-off production runs, and high transportation costs because they are unable to benefit from the
system of mass production. A similar situation is faced in military acquisition when
commercial parts do not meet an items required specifications, thus driving up costs.
In calculating the effectiveness of 3D
printing, we have to look at total ownership cost of a unit, rather than only considering the per-unit cost of production.
The all-encompassing costs related to
the item as a whole include: production,
transportation, storage (warehouse costs,
heating, cooling, manning), management,
and potential disposal. With all of these
variables in mind it is very difficult to
break down costs on a per-unit level, but
is the only quantifiable method of demonstrating the technologys fiscal superiority.
When assessing the viability and cost effectiveness of 3D printing supported supply
chains, many of these high total-ownership
costs can be reduced. 3D printing presents
the potential of local manufacturing that
will reduce lead-times and transportation
costs. Efforts to promote standardization of
subparts can be avoided because objects can
be digitally altered before printing, to meet
individual product line and consumer specifications, at minimal cost to the producer.

When the per-unit cost is no longer a factor, we can move to a system of on-demand
manufacturing where production accurately
reflects consumer demand. This cures the
problem of obsolescence and improves the
value proposition for S&OP. On-demand
manufacturing also reduces the need for
warehousing, as manufacturers will be able
to shift from storing end goods to raw materials and have substantially more flexibility
in production, as one raw material provides
access to numerous end goods. The increased capability provided by 3D printing
will significantly reduce the carrying cost of
an organization, simplify a complex supply
chain, and reduce the number of steps it
takes to move a product to the market.
I had the opportunity to speak with
James Coleman, Founder and CEO of e-

the focus shifts from moving end goods

to moving strictly raw materials, a premise which he has built his business around.
Much like Mr. Varkonyi, he also sees potential for a shift in the way we think
about logistics and explains that:
Rather than thinking about how much
of a specific item you need to be holding, when you are moving raw materials
that can be used to build many items,
you create a natural flexibility and
eliminate the complexity of the supply
system. For example instead of managing 20 different SKUs for stainless steel
bolts, you now have a printer that can
produce each of these items and print
on demand. Having to manage only
the raw material makes the system orders of magnitude easier.xi

3D printing presents the potential of local manufacturing that will reduce lead-times
and transportation costs. Efforts to promote standardization of subparts can be
avoided because objects can be digitally altered before printing, to meet individual
product line and consumer needs, at minimal cost to the producer. When the per-unit
cost is no longer a factor, we can move to a system of on-demand manufacturing
where production accurately reflects consumer demand. This cures the problem of
obsolescence and improves the value proposition for S&OP.
commerce site Makerstash, which specializes in 3D printer filaments and supplies.
Mr. Coleman foresees some very interesting
impacts for 3D printing technology with
regard to the supply chain. He explained:
3D printing provides a very low cost
to complexity ratio and the ability to
create something that is custom on the
spot. This ability presents a very interesting potential in the future. When
thinking about traditional e-commerce
sites, Amazons attention, for example,
is focused on how they can get material
to the customer quickly. They work to
solve the question of how can we organize ourselves to get customers the piece
of equipment when and where they
need it, at a fair price to buyer and seller. When you add 3D printing to that
problem set, you can start to change
how you fulfill that need.x
According to Mr. Coleman, the supply
chain will gradually change and become
more flexible. He doesnt see it happening in the immediate future because of the
limitations on producing the more robust
parts, but its only a matter of time before
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This is a fantastic idea for the future,

but James recognizes that there is a substantial gap between today and where the
technology will be in the future. Companies tend to ignore 3D printing because
the print materials arent broad enough
yet and the costs associated with printing
in metal are prohibitively high. This will
all change as the industry gains traction
and he further explains:
As costs come down there will be some
pretty startling impacts on the way we
do business. I have a small e-commerce
shop that is just getting started. What
excites me about the technology is the
huge potential impact. I think the technology leaves people feeling empowered
to create, which is a huge deal. If you
have a problem at home with a 3D
printer you can now deal with it by
finding a digital drawing of the object
online and printing the needed part.xii
To stay relevant, it is imperative that
companies prepare for this transition.
With the Pareto Principle (80/20 rule) in
mind, organizations have to examine the
parts and products they use to determine

October 2013

those that can be manufactured using a

3D printer. The current state of technology supports production of B and C
items, those items that make up about
20% of sales. Initially this volume will not
have a noticeable impact on the shipping
industry. There will be an increase in the
distribution of raw materials that will likely offset any impact of local manufacturing. However, as the technology improves
and new uses arise, we will see an even
larger shift in the number of goods that are
produced by 3D printers, causing greater
disruption in the supply lines. Car companies like Fordxiii and GMxiv are already
taking advantage of the rapid prototyping
capabilities of 3D printers to reduce development costs. Auto repair shops will also
benefit by making one-off components
rather than waiting for suppliers.
Leading edge technology and engineering solutions companies like Alion Science
and Technology are implementing 3D
printing into their production processes
as well. During a conversation with Eric
Peterson, Chief Scientist and Program
Manager at Alions Rapid Engineering Solutions Facility, he recalled that the company began using 3D printing about eight
years ago. Since then, he said, I cannot
think of a single project here (at Alion)
that we havent used a 3D printer for in
one way shape or form. I dont know what
we would do without it. Mr. Peterson has
high hopes for the future of 3D printing in
metals and explains that, there is amazing
potential in using and creating new alloys
and other materials using this process.
Alloying is the addition of other elements
to metal that improves strength, corrosion
resistance and enhances its properties.xv
In addition to alloys, he goes on to explain that, The potential of direct printing
of circuit boards has been tried with some
limited successand has really cool implications for repair and creation of replacement circuit boards for immediate use right
where you need them. Imagine the progress
that will happen when 3D printing gets
the resolution and materials required to
print not only conductors and insulators,
but semiconductor devices directly as part
of the printing process. It is certainly now
within our realm of imagination. We can
already print conductive and dielectric materials, so direct printing of things like capacitors is within our technological grasp.
Mr. Peterson predicts we will see these and

other technological advancements in less

than 10 years now that the technology has
pushed past the bleeding edge.xvi
Military 3D Printing

The focus on development and implementation of 3D printing is not restricted

to private industry. The President made it
clear that he intends to push for AM technology development across the DOD.
This will have significant implications for
the companies and supply chains that support it. All branches of the military have
been researching ways to leverage this new
manufacturing capability, whether its on
the battlefield, ship, or in a hanger bay.
The government recently completed the
first of 15 manufacturing innovation institutes in Youngstown, Ohio, to be headed by the US military, with the purpose
of harnessing the power of 3D printing
technology. Five federal agencies including the Departments of Defense, Energy
and Commerce; the National Science
Foundation; and NASA have $45 million
of combined funds to invest in the institute, with an additional $40 million to be
raised from private funds.xvii
On the waterfront, LT Ben Kohlmann,
head of the Chief of Naval Operations
Rapid Innovation Cell at the Navy Warfare Development Command, has been
working tirelessly to move the Navys AM
initiative shipboard. Because of the amazing uses for 3D printers in the medical
environment, he is targeting one of our
Nations Hospital ships as a test subject.
xviii
During his research, he uncovered an
intricate network of engineers and supply
types throughout the Navys research and
development labs, and maintenance detachments that have been working with 3D
printers for over a decade. He has also connected with similar types from the Army,
who are using this technology on the frontlines with the Special Operations Forces to
provide units greater flexibility to produce
on-demand parts for their missions. This
is a unique opportunity to integrate advanced engineering distance support onto
the battlefield in real time. According to LT
Scott Cheney-Peters, who is assisting LT
Kohlmann with the project and authored
a recent Proceedings article on 3D printing
in the Navy, As additive manufacturing
matures, it creates increasingly compelling
logic, and exciting opportunities for farflung supply chains such as the Navys.xix
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These forward thinkers recognize the

extraordinary capability and future potential that this technology has to elevate
the mission readiness of our armed forces.
Further research, development, and implementation of 3D printing technology will
help the United States maintain superiority in a fiscally constrained environment.
Leading Edge
the Future of 3D Printing

Open source hardware designs coupled

with the expiration of key patents on SLS
3D printers will open the playing field for
small businesses to expand upon the current iterations of the technology. There
are dozens of private companies and universities already working to develop different facets of this technology, and we
are seeing some amazing results that are
not limited to industrial manufacturing.
Researchers at Cornell University have
been working to perfect a printer that
produces ready-to-eat food. Bio-printing
company Organovo (NYSE: ONVO),
a San Diego based firm, has developed
a printer that can print human tissue
with the intention of furthering medical
research and eventually printing replacement organs. Made In Space is working
with NASA to enable the future of space
exploration by being the first company
to develop a 3D printer that will work
in zero gravity. MAKE XYZ is increasing access to 3D printers by building
online networks of local manufacturers
that allow users to leverage the technology, without owning it, to have parts
manufactured and delivered the same
day. Implementation of this technology reduces the complexity of traditional
supply chains enabling businesses to stay
relevant and competitive in the global
marketplace. With this understanding in
mind, it is realistic to predict that we will
see disruption to the way traditional supply chains operate in the next 18 months,
with substantial changes taking place in
the next decade. Is your company ready
for this transformation? DTJ
Lieutenant Ray is a Contract Specialist at
Naval Sea Systems Command and serves
on the Board of Directors for the NDTA
Washington, DC Chapter. He is also an
MBA Candidate at the F.W. Olin Graduate
School of Business, Babson College. Prior to
earning his commission as a Supply Officer

October 2013

in the United States Navy, he graduated

from Trinity College, Hartford, CT with a
bachelors degree in Economics. To request
more information on this article or to discuss the topic further he can be contacted at
JasonTRay@gmail.com or via LinkedIn at
www.linkedin.com/in/JasonTRay/.

1 Moores Law The number of transistors

incorporated in a chip will approximately
double every 24 months. Continuing
Moores Law means the rate of progress
in the semiconductor industry will far
surpass that of nearly all other industries.
(Gordon Moore, Intel co-founder) It is
becoming clear that 3D printing
technology will experience the same
rapid exponential growth in hardware,
software and materials.
i http://www.3dsystems.com/30-yearsinnovation
ii http://www.intel.com/content/www/us/en/
history/museum-gordon-moore-law.html
iii http://www.forbes.com/sites/
tjmccue/2012/03/27/3d-printing-industrywill-reach-3-1-billion-worldwide-by-2016/
iv http://investor.staples.com/
phoenix.zhtml?c=96244&p=irolnewsArticle&ID=1814995&highlight=3D%20
Print, Staples First Major U.S. Retailer to
Announce Availability of 3D Printers,
May 3, 2013
v
http://wohlersassociates.com/blog/, Terry
Wohlers May 25, 2013
vi http://www.pressroom.ups.com/
Press+Releases/Current+Press+Releases/
The+UPS+Store+Makes+3D+
Printing+Accessible+to+StartUps+and+Small+Business+Owners
vii http://www.geaviation.com/press/other/
other_20121120.html, GE Aviation acquires
Morris Technologies and Rapid Quality
Manufacturing
viii Interview with Irv Varkonyi
ix The New Software-Defined Supply Chain,
IBM Better Business Value, Paul Brody and
Veena Pureswaran
x
Interview with James Coleman
xi Interview with James Coleman
xii Interview with James Coleman
xiii http://www.businessweek.com/
articles/2012-12-21/fords-gift-toengineers-makerbot-3d-printers
xiv http://www.3dsystems.com/learning-center/
case-studies/3d-rapid-prototyping-fasttracks-gm-fuel-efficiency-gains#.UgfuMmQ6Ut0
xv Interview with Eric Peterson
xvi Interview with Eric Peterson
xvii (http://www.smartplanet.com/blog/
business-brains/us-governmentinvests-30-million-in-new-3dprinting-center/25817)
xviii Interview with LT Ben Kohlmann
xvix Interview with LT Scott Cheney-Peters