How 3D Printing Impacts Logistics and Supply Chains- by Abhilasha Satpathy, DCMME Center Graduate Student Assistant

In recent years, 3D printing has brought manufacturing capabilities to several remote, hard-to-access areas across the globe. DHL, for instance, tells us that the U.S. Navy 3D prints drones on-demand on board its oceangoing vessels. NASA, meanwhile, is working to develop a 3D printer for the International Space Station. Shell is also experimenting with this remote manufacturing method on offshore oil platforms.

Pay-for-use or nonprofit fabrication shops are becoming more popular as well, offering public access to 3D printing tools, and some websites have begun aggregating 3D printing designs, allowing customers to compare and select printing services that work for their specific needs.These initiatives are disrupting the traditional manufacturing supply chain in several ways. In researching warehouse stocking practices in Amsterdam, DiManEx found that approximately 80% of stored products were sold only twice yearly, which led to write-offs, scrapping, and wasted materials. With on-demand, on-site printing, companies can move away from having to store excess spare parts and can instead deliver parts quickly and efficiently, whenever they’re required. Mercedes-Benz Trucks, for instance, allows customers to 3D print more than 30 cargo truck spare parts.

As 3D printing becomes more and more prevalent, expect to see increased supplier consolidation as well. For instance, logistics providers may offer added value by being the ones to process, print, and deliver 3D parts quickly and cheaply. In this way, the typical months-long process of designing, sourcing, and producing component parts can be cut down drastically. In the future, 3D printing warehouses may also take on the responsibility of material sourcing in addition to 3D end-to-end design, production, and delivery. As an example, consider Amazon’s bet on this technology: The company has patented a truck fitted with 3D printers that would allow for sophisticated mobile manufacturing capabilities. Increased responsiveness is also likely, as 3D printers allow for smaller batch sizes, which can positively impact quality control and open the door for expedited product development.

Finally, this kind of technological innovation is likely to bring about advanced customization options, as users will be able to select various aspects of the design, material, shape, size, packaging, and so on. And in gaining the power to make and deliver their own 3D-printed products, customers will no longer be limited to what suppliers themselves design and produce.

 

References:

3D Printing Finds Its Place in the Supply Chain. (n.d.). Retrieved from https://news.thomasnet.com/featured/3d-printing-finds-its-place-in-the-supply-chain/

 

Questions:

  1. How is 3D printing bringing about advanced customization options into supply chains ?
  2. How is 3D printing reducing wastage in supply chains ?
  3. How is 3D printing improving the efficiencies of supply chains ?

 

 

 

Trump, Mexico, and the TPP

The article “Mexico ready to discuss NAFTA with Trump, eyes non-US TPP” discusses Mexico and their actions with respect to the TPP post the Donald Trump vote. (http://www.reuters.com/article/us-usa-election-mexico-idUSKBN1352N0?il=0) Per the article “Mexico is willing to discuss NAFTA with U.S. President-elect Donald Trump but may seek to circumvent the United States on a broader trans-Pacific deal if necessary…”. The main mission of the discussions are to “persuade Trump how beneficial NAFTA… had been for North America”, and how “… the world is not competing by country, it’s competing by region…”. While currently no date has been established, both parties are anticipating one soon. “Mexico and the United States do about half a trillion dollars in trade every year, with the balance of commerce favoring the smaller country by tens of billions of dollars”. Despite this, Mexico is the US’s second-biggest foreign goods market after Canada. How will these negotiations play out? Only time will tell.

Anti-Corruption Within the TPP

 

If you have been following the Trans-Pacific Partnership you will know that it was signed on February 4, 2016 and is now pending ratification before taking effect. After years of negotiation, what happens now? One of the major concerns moving forward is corruption; how to avoid corruption, and how to respond if it takes place. The article “Anti-corruption Measures In The TPP Agreement” (http://www.livingstonintl.com/global-perspectives/anti-corruption-measures-in-the-tpp-agreement/ contains a great summary of the measures both past and present that will assist in this endeavor.

“Confidence in the rule of law is critical for trade and investment to flourish. Corruption, in particular, is an insidious impairment to effective commercial activity and cannot be tolerated as a cost of doing business.” To help combat this potential enemy, the TPP will employ both past and present policies. Among the past policies to be utilized are the:

  • 1977 U.S. Foreign Corrupt Practices Act (FCPA)
  • 1999 Organization for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials
  • 2003 United Nations (UN) Convention Against Corruption

To support these previously instilled practices, the entire 26th chapter of the TPP, titled “Transparency and Anti-Corruption” is dedicated to this same movement. This chapter specifically addresses topics such as:

  • Requiring the publication of laws, regulations, procedures and administrative rulings
  • Guaranteeing due process
  • Promoting rules against conflicts of interest

It is the hope that the TPP will provide benefits to all countries involved, but its success is dependent on maintain honesty and consistency among all parties involved. As stated in the article, “… the framework for anti-corruption is already in place within the TPP. When ratified and enacted, it will be up to the Parties to eliminate corruption as a trade barrier.”

Peru and the TPP

With the global market as prominent as it is, any major global trading agreement is something to research and understand. The TPP, or Trans-Pacific Partnership, is one of the bigger agreements made in recent history, and one of the major players in this agreement is Peru. What part does Peru play and what are some of the benefits they will get from being a member of this agreement? The article “The TPP will give Peru direct access to markets such as Australia and New Zealand” (http://www.amcham.org.pe/publicaciones/articulos.php?art=3) touches on these questions and dives into their respective answers. Three of the main takeaways with respect to Peru are shown below:

  1. “Peru will see its exports increase by $3.2 billion by 2025, once the TPP is finalized.
  2. Peru will now have access to Australia, New Zealand, Malaysia, and Vietnam and their corresponding markets.
  3. “Many of the benefits will be seen in non-traditional sectors, such as agricultural exports”

With the TPP being such a talking point, especially now during the Presidential debates, it will be interesting to monitor the progress of this agreement, and how Peru actually benefits from being part of this free trade agreement. Will the benefits be the same as this article predicts? Only time will tell.

Mexico’s Procurement Commitments within the TPP

The article “TPP Procurement: Mexico’s Commitments” (http://trade.djaghe.com/) provides an excellent summary of Mexico’s procurement plans under the new Trans-Pacific Partnership agreement. The article divides these plans into five main segments which are thresholds, coverage of entities, coverage of goods and services, traditional measures, and permanent measures.

  1. Thresholds: Mexico has decided to mirror the procurement thresholds utilized under NAFTA, a few of which are $79507 for goods and services, as well as $10,335,931 for construction services.
  2. Coverage of Entities: Similar to the Thresholds section, Mexico has agreed to use the same coverages as are used under NAFTA. Additionally, as in NAFTA, Mexico will not cover any sub-central entities.
  3. Coverages of Goods and Services: Contrary to Coverage of Entities and Thresholds, Mexico will not follow their pre-arranged coverages of goods and services established under NAFTA, in which, as of 2005, utilizes a negative list of excluded services. Like most parties within the TPP, Mexico plans to use a positive list for goods purchased, while continuing to exclude the same services that are excluded under NAFTA.
  4. Transitional Measures: Mexico has stated they will utilize the same transitional measures that were applicable to NAFTA between 1994 and 2002. These transitional measures, however, do not apply to Canada, Japan and the US.
  5. Permanent Measures: Following after Transitional Measures, Mexico plans to mimic the permanent measures used under NAFTA that favor its domestic industry.

While more in-depth information is available in the article listed above, as well as through other sources, this provides a great overview of Mexico’s strategic plan within the TPP, as well as the similarities and differences from NAFTA.

South Korea, Mexico and the TPP

South Korea, one of Asia’s strongest countries, was not included in the TPP deal. South Korea has expressed interest in joining the Trans-Pacific Partnership, but until now has not been allowed access. However, as expressed in the recent article “South Korea, Mexico Agree to Restart Free Trade Discussions” (http://www.livingstonintl.com/international-regulatory-updates/south-korea-mexico-agree-to-restart-free-trade-discussions/) there have been recent talks of a trade deal between South Korea and Mexico. President Park Geun-hye visited Mexico in early April, and “hinted at an interest in developing an agreement with her country’s top Latin American trade partner. President Park was also quoted saying “I think it’s meaningful for South Korea and Mexico to sign a free trade agreement to expand trade investment and strengthen economic cooperation.” The logic behind her suggesting is that while Mexico is part of the TPP, the 12-nation trade agreement is still a long way away from being implemented. As stated in the article “with the status of the agreement gummed up in the U.S. Congress and no clear path in sight for the TPP, the Mexican government seems to have decided that a deal with South Korea is worth pursuing.” Once the TPP is implemented, Mexico will have access to various Asian markets, and a free trade agreement with South Korea may not be necessary. How will these trade negotiations affect South Korea’s chances of being admitted into the TPP? Will Mexico receive push-back from other TPP members for these recent negotiation talks? Will this delay the TPP adoption even further? In the case of South Korea, Mexico, and the other TPP members, only time will tell.

The TPP, Trump’s wall, and Mexico

In the article “TPP May Hamper Mexico’s Apparel Industry” (http://news.apparelresources.com/trade-news/tpp-may-hamper-mexicos-apparel-industry/), the complex relationship between the TPP, the United States, and Mexico is examined. It is important to understand the current U.S.-Mexico relationship; last year the US exported “6.5 billion of apparel and textile to Mexico… $4 billion was fabric and $1.2 billion apparel parts”. There was also “$665M of textiles and yarn”, based on AAFA data. Likewise, Mexico sent “$4.5 billion to the U.S., about $3.5 billion of which was apparel and #1 billion textiles”. With such a successful relationship, what it happening? Upon inspection it appears that Mexico’s apparel “kryptonite” may be Vietnam. According to the article “eighty products is nothing compared to the 1,300 textiles categories that could be affected by this arrangement”. The second major hurdle for Mexico is Trump’s proposed US-Mexico wall. Mexico estimates that “$11 billion in trade flows could fall 20%, or $2.2 billion, in the wall’s first year”. What can Mexico do to elevate their apparel potential? Is it possible to form another deal with the US? What other potential avenues can they take to better their economic performance?