(c) 2013, The Washington Post.
(c) 2013, The Washington Post.
In recent years, Amazon.com founder Jeffrey P. Bezos has been in relentless pursuit of a lag-less future in which you barely have time to utter the word "shipping" before a package hits the doorstep. In this utopia, deliveries take place within hours, not days. To make it a reality, Bezos is bringing to bear the full power of Amazon's supply-chain resources. The company has plowed $13.9 billion since 2010 into new warehouses near its customers. It's a massive undertaking, even for a multinational.
But a handful of smaller companies are convinced there's a way to get products to consumers just as quickly, with greater satisfaction and at a fraction of the cost. The future, they say, is in on-demand 3-D printing.
These two methods of delivery couldn't be more different. One relies on scaling and infrastructure to cut transportation time. The other eliminates infrastructure and instead sinks money into materials and on-site manufacturing.
It won't be long before these technologies start overlapping and interacting — and that's a good thing. The resulting combinations will iron out a lot of the inefficiencies of using either method alone. But however it happens, it probably won't be hailed as a "3-D printing revolution" or as a "shipping revolution." This could be the just-in-time revolution.
Amazon is merely one of many businesses jockeying to see who can shave the most delay off their shipping options. EBay and Wal-Mart are testing same-day delivery. The competition to trim even a few hours is intense. To get deliveries to customers in under an hour, eBay dispatches college students by foot, bike and taxi to pick up products at big-box stores and drop them at people's doorsteps.
Faster shipping is costly. As a share of Amazon's total sales, shipping was nearly 5 percent in 2011, up from 3.2 percent in 2009. It's increasingly eating into Amazon's profit, and same-day delivery promises to exacerbate that trend.
Amazon is moving ahead anyway. By bundling same-day delivery with Amazon Prime — whose members pay $79 per year to receive free shipping and by some estimates spend up to twice as much as nonmembers — the company is likely to make up for any shipping-related shortfalls. Although it's hard to see a mom-and-pop store pulling off such a feat, Amazon has the means to use same-day shipping as a loss leader.
Same-day shipping raises the pressure on Amazon to have a more reliable inventory, lest an order come in and can't be fulfilled within 24 hours. (Bezos, Amazon's founder, has agreed to purchase The Washington Post in a deal expected to close this year.)
Faster shipping also allows companies to produce a wider variety of products with less unsold inventory. When air shipping began to displace ocean freight in the mid-20th century, it cut weeks off of transportation times, enabling perishable goods to survive longer trips. That trend has accelerated with aircraft technology, says David Hummels, an economist at Purdue University in Indiana.
"If there is uncertainty in demand plus lags between production and final sales," Hummels wrote, "firms may face a mismatch between what consumers want and what the firm has available to sell."
So the less time goods spend in transit during production and distribution, the more efficient companies can be at satisfying consumer demand. But what if companies could dispense with shipping altogether by "manufacturing" goods near their final destination?
That's where 3-D printing comes in. By producing goods in the ordered configuration precisely when they're needed, 3-D printing is ideal for filling gaps in the supply chain (which reduces uncertainty), keeping inventory low (which saves companies money on shelving) and reducing waste (which occurs when the goods aren't sold).
Advocates for 3-D printing argue that the manufacturing technique could upend the retail sector. A small or nonexistent inventory gives a business much more freedom to test new products. Suppose you sold coffee cups that were manufactured only as people ordered them, said Hod Lipson, director of Cornell University's Creative Machines Lab. You could post a handful of options on your Web site at little to no cost to you, then just delete the low-performing cups.
"That would be very costly to do if you actually had to fill up a whole supply chain, a whole production line, for each of those items," Lipson said. "But when you're printing them or fabricating them on demand, you can much more easily adapt your production."
The idea of most American entrepreneurs doing business this way is enticing. Alas, limits to just-in-time manufacturing make universal adoption unlikely.
One major hurdle is that printing with more than one material at once is difficult. A typical room might contain objects with 50 materials in various combinations. To print an object, not only would you need all the materials on hand in a printable form — you'd also need a printer with multiple or interchangeable nozzles. And each new material might need to be printed under different conditions.
DJ Butenschoen works for an Illinois-based company called GPI Prototype and Manufacturing. The company 3-D-prints metal parts by laying down a powder and then tracing a design with a laser before applying more powder and repeating the process, over and over. (All 3-D printing operates on the same principle.)
"We have seven metals we build out of," Butenschoen said. Each one prints at its own rate. "Sometimes it's how focused the laser is, is it quick, is it slow — so having the ability to put multiple metals in there, you'd have to have multiple lasers and multiple everything. And then you're putting three or four machines together just to make one part."
The finishing process often demands the most attention. After all, even the simplest bobblehead is decorated before it's sold. That takes time and money, too.
GPI accepts orders from practically anyone, from hobbyists to large manufacturing firms that need complex moving parts. But — tellingly — GPI won't 3-D-print something if it can be machined using traditional methods.
You shouldn't try this at home. Squirting molten plastic from a tube might be fine, but steel or aluminum, with their higher melting points, are another story.
Nobody, in other words, will be replicating whole cellphones and televisions at home anytime soon. Traditional manufacturing and stand-alone factories will endure. In time, they will incorporate 3-D printing, allowing more flexible manufacturing and shorter turnaround times.
The factory of the coming decade might wind up being a much smaller, community-oriented destination. 3-D printing is fast adopting the Kinko's model. UPS — yes, the company with "parcel" in its name — has announced plans to set up 3-D printing shops in San Diego. Washington's public library system has a 3-D printer for public use. And New York-based Shapeways accepts 3-D designs and prints them for you.
The last of those represents an early mix of traditional shipping and 3-D printing. "Shapeways is taking the Amazon model," said Chris Dixon, the Andreessen Horowitz investor who sent Shapeways $30 million in venture capital this year. After it prints a customer's product from a 3-D design file, he said, UPS delivers it.
Shipping to U.S. locations takes two to three weeks. But when UPS opens its new 3-D printing centers nationwide, Shapeways could shrink that delay to the time it takes a person to visit a printing center, feed a copy-protected version of the design into the machine and print a product.
Amazon's fulfillment centers could be another place where just-in-time manufacturing and delivery come together. Today, the company might be focused on getting things from its facilities to customers quickly. But that inventory has to be restocked for the next customer. Using 3-D printers to replenish inventory locally could add up to a great deal of savings.
Even if home-based 3-D printing remains a niche activity, MakerBot chief executive Bre Pettis expects that within 18 months, most people will have held a 3-D-printed object.
"The next big threshold is when everyone knows someone who has access to a 3-D printer," Pettis said. "You'll be the person friends come to and say, 'Take me to your leader.' "