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No more linear supply chains?

BASEL, Switzerland: February 07, 2017. According to Mike Wilson, global head of Logistics for Panalpina, the traditional method of manufacturing products in Asia and shipping them across the globe is no longer sustainable – neither from a competitive nor an environmental perspective:

In the new world of manufacturing, the take-make-dispose supply chains of the past are morphing into the distributed, circular and sustainable supply chains of the future. The drivers behind this development are product modularization, the growing makerspace movement, and rapid advancements in 3D printing (3DP).

Today, customers demand the latest products, and fast. And they want them personalized.

The demand for speed is reflected in the growing availability of same-day and even same-hour delivery services, and the latter is becoming increasing feasible with improved 3D printing technologies.

But this is just the tip of the iceberg. Bigger changes are occurring in global manufacturing and supply chains to respond to these new customer demands. What customers want is influencing where and how companies manufacture their products. They have already started to move their production closer to demand in an effort to increase their speed to market; a strategy known as distributed manufacturing.

Whilst it may seem counterintuitive to move manufacturing from low-cost to higher cost countries, labor costs represent only a small portion of total product life cycle costs. When procurement, repair, recycling, and remanufacturing are also considered, as well as the potential profits earned from being able to deliver faster, or the lost sales from not being able to deliver as fast as the competition, then the benefits of distributed manufacturing far outweigh the costs.

In parallel to this shift towards distributed manufacturing, companies are looking for ways to integrate 3D printing into their supply chain processes to allow them to respond to the growing demand for personalized products. The steady advancement of 3D printing technology, to the point today where it is possible to print complex products in a huge variety of materials and colors, is making it increasingly attractive for industrial manufacturing.

An accelerator in the uptake of industrial 3DP is that product designers, enabled by initiatives such as the makerspace movement, are completely rethinking how products can be designed and manufactured. It is not about designing existing products to be made using 3D printing; it is about designing completely new products that couldn't even be imagined within the constraints of traditional manufacturing.

Panalpina has already started to help its customers rethink and redesign their manufacturing and global supply chain strategies for this new world. We have set up new manufacturing centers close to local demand and established repair and re-manufacturing centers around the world and together with 3D printing experts Shapeways, we provide 3DP manufacturing capabilities.

We have created an advanced method of demand prediction (Demand-driven Inventory Dispositioning, D2ID) based on product life cycle forecasting, and we also offer a highly scalable, flexible and modular end-to-end e-commerce platform which allows customers to sell their products online and make use of Panalpina's global supply chain infrastructure for delivery.

Furthermore, we believe that block chain technology, cognitive supply chains and autonomous vehicles will have a dramatic impact on global supply chains. And what will be next? The Panalpina Research Centre at the Cardiff University Business School is dedicated to answering that question.

Manufacturing and global supply chains are changing faster than they have ever done before. In the future, they will change faster than we can even imagine today. The key to success will be in flexibility and adaptability – companies will need to be able to change fast in order to survive.

Panalpina and Cardiff Business School at Cardiff University, UK launched a new Logistics Manufacturing Research Centre in 2016 to conduct research into distributed manufacturing, 3D printing, the circular economy and the impact of digital manufacturing on global supply chains.

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