FEATURE

3D opportunity for supply

chain readiness
Taking the pulse of industry
Jonathan Holdowsky and John Wilczynski

PART OF A DELOITTE SERIES ON ADDITIVE MANUFACTURING

3D opportunity for supply chain readiness: Taking the pulse of industry

Discussions at a recent event throw light on where things stand in the world
of additive manufacturing, with a particular emphasis on emerging supply
chain applications.

S
INCE 2013, DELOITTE Insights has published
a richly complex array of thought leadership
on the topic of additive manufacturing (AM)
that parallels the technology’s ascension into main-
stream manufacturing environments. In so doing,
we have placed some emphasis on how AM may
transform the manufacturing supply chain as part
of a broader transformational framework. (See the
sidebar, “The additive manufacturing framework.”)
Such is especially important given the increasing
digitalization that the supply chain has experienced
and the role that AM may play in that evolution.
Indeed, current discussion on AM supply chain
applications generally focuses much more on what
is actually unfolding on the ground than on the
kinds of theoretical discussions about what is “pos-
sible” that were relatively common just five years
ago. Particularly useful insights in this regard can
be found in the first-hand, real-world experiences
and thinking of leading AM practitioners in their
respective organizations.
A recent event in Austin was designed to provide
those kinds of real-world perspectives in one setting.
Sponsored by America Makes, “Technical Review &
Exchange (TRX): Supply Chain Readiness” served
as a colloquium on AM within a supply chain context.
By way of personal interviews and presentations,
this two-day event offered first-hand insights on the
state of the AM supply chain, including general as-
sessments, emerging AM supply chain applications,
and the digital thread for additive manufacturing.
Participants came from sectors as diverse as phar-
maceuticals, defense, shipping, academia, among
others.
In the pages that follow, we offer some of the
themes that emerged from that event.

THE ADDITIVE MANUFACTURING FRAMEWORK

AM’s roots go back nearly three decades. Its importance is derived from its ability to break existing
performance trade-offs in two fundamental ways. First, AM can reduce the capital required to achieve
economies of scale. Second, it increases flexibility and reduces the capital required to achieve scope.

Capital versus scale: Considerations of minimum efficient scale can shape supply chains. AM has the
potential to reduce the capital required to reach minimum efficient scale for production, thus lowering
the manufacturing barriers to entry for a given location.

Capital versus scope: Economies of scope influence how and what products can be made. The flexibility
of AM facilitates an increase in the variety of products a unit of capital can produce, which can reduce
the costs associated with production changeovers and customization and, thus, the overall amount of
required capital.

Changing the capital versus scale relationship has the potential to impact how supply chains are
configured, and changing the capital versus scope relationship has the potential to impact product
designs. These impacts present companies with choices on how to deploy AM across their businesses.

Companies pursuing AM capabilities choose between divergent paths (figure 1):

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 3D opportunity for supply chain readiness: Taking the pulse of industry

THE ADDITIVE MANUFACTURING FRAMEWORK CONT.

FIGURE 1

Framework for understanding AM paths and value

High product change

Path III: Product evolution Path IV: Business model

• Strategic imperative: Balance of
growth, innovation, and
performance
• Value driver: Balance of profit,
risk, and time
• Key enabling AM capabilities:
– Customization to customer
requirements
evolution
• Strategic imperative: Growth and
innovation
• Value driver: Profit with revenue
focus and risk
• Key enabling AM capabilities:
– Mass customization
– Manufacturing at point of use

High supply chain change

– Increased product functionality
No supply chain change

– Supply chain disintermediation

– Market responsiveness – Customer empowerment
– Zero cost of increased complexity

Path I: Stasis Path II: Supply chain evolution

• Strategic imperative:
Performance
• Value driver: Profit with a cost
focus
• Key enabling AM capabilities:
– Design and rapid prototyping
– Production and custom tooling
– Supplementary or “insurance”
capability
– Low rate production/no
changeover
• Strategic imperative:
Performance
• Value driver: Profit with a cost
focus and time
• Key enabling AM capabilities:
– Manufacturing closer to point
of use
– Responsiveness and flexibility
– Management of demand
uncertainty
– Reduction in required inventory

No product change

Source: Deloitte analysis.

Deloitte Insights | deloitte.com/insights

Path I: Companies do not seek radical alterations in either supply chains or products, but they may
explore AM technologies to improve value delivery for current products within existing supply chains.

Path II: Companies take advantage of scale economics offered by AM as a potential enabler of supply
chain transformation for the products they offer.

Path III: Companies take advantage of the scope economics offered by AM technologies to achieve new
levels of performance or innovation in the products they offer.

Path IV: Companies alter both supply chains and products in pursuit of new business models.

3
3D opportunity for supply chain readiness: Taking the pulse of industry
First, some context
Even just a few years ago, the notion that AM
could have found applications beyond basic proto-
typing and simple spare-part production may have
seemed far-fetched. The idea that AM would have
helped upend basic assumptions about the limita-
tions and possibilities of capital, scale, and scope
in manufacturing has traveled far beyond most ex-
pectations. Yet, just in the recent past, what AM has
achieved typically goes well beyond even the most
optimistic assessments.
But what exactly has driven this remarkable
growth? To be sure, there is likely no single answer
to this question. Certainly, AM systems have
become more versatile in the materials they use,
and more sophisticated in the technologies and
processes they exploit. Printers have also become
more cost-effective in being able to do more for the
same or even less financial investment—more “bang
for the buck.” But just as importantly, there seems
to be an unmistakable sense that AM has “arrived.”
Many players within well-established “old-line”
industries appear to have begun to view AM with
greater acceptance as a viable—and potentially even
advantageous—manufacturing solution.
Take Aerospace & Defense (A&D), for example,
perhaps one of the most “traditional” manufac-
turing industries. A&D was an early adopter of AM
technology. This may seem a bit counterintuitive
given the especially “high-stakes” nature of the A&D
manufacturing process and the typically conserva-
tive mindset of A&D organizations.
But, much of A&D’s early adoption of AM rested
largely in prototyping and tooling applications,
with very limited production of end-use parts. And
whatever AM production that did take place tended
to reside within “lower risk” products like storage
bins in commercial aircraft, among other examples.
As Deloitte Insights published several years ago in
3D opportunity for Aerospace & Defense: Additive
manufacturing takes flight, A&D executives showed
reluctance to adopt AM on a broad scale for a variety
of reasons that ranged from the unproven nature
4
of the AM process in complex manufacturing envi-
ronments to its perceived limited variety of usable
materials. That the A&D industry traditionally has
been characterized by an ethos of caution also did
not likely help drive widespread AM adoption.
The tide appears to be turning.
Today, A&D players are leveraging AM in ways
far beyond prototyping and tooling: from mission-
critical turbine fuel nozzles, to titanium alloyed
parts that go to the very heart of a plane’s structural
integrity, to the development of a blockchain-based
solution to certify the authenticity of an AM part.1
The list goes on.
And the same kind of story can be told in other
sectors too—beyond A&D and manufacturing. But
the larger point is that many organizations no longer
view AM as a solution exclusively, or perhaps even
primarily, for prototyping or tooling. Quite to the
contrary, many increasingly rely on it as a practical
solution for a wide range of sensitive applications—
throughout all four phases of the AM framework of
figure 1—and appear to be making substantial bets
on AM’s long-term viability in terms of time, treasure,
and the very future of the organization, as a result.
What are AM supply chain
leaders thinking about?
Still, just as many manufacturing organizations
increasingly rely on AM in increasingly sensitive ap-
plications, they tend to place commensurately more
focus on the enabling factors that go well beyond
the make and design of the printer itself. Perhaps
nowhere is this more true than within the supply
chain setting—considered by some to be the life-
blood of the manufacturing organization, and the
place within the manufacturing organization that
AM has enabled perhaps the most transformation.
While any full list of such AM-enabling factors
is informed by the particular challenges that each
organization faces, the conversations in Austin ap-
peared to focus on a set of strategic considerations
including:
 3D opportunity for supply chain readiness: Taking the pulse of industry

QUALITY ASSURANCE material variability, and consistency of the printed

“A big challenge is quality, you know, we’re
obviously pushing towards performance,
that’s great. But are the quality assurance
mechanisms trailing as quickly as … the
technology itself that’s moving? I’m going
to say probably not. That’s a big push that
we really want to move forward.”
—Process innovation leader,
Major defense contractor
Perhaps unsurprisingly, quality assurance (QA)
still looms large as a significant hurdle to even wider
adoption of AM, and this sentiment seemed to be
shared by a number of practitioners. QA—the “long
pole in the tent” as one practitioner referred to it—
brings to the fore any number of challenges that go
to the heart of AM manufacturing scale and scope.
Key in this regard is expected to be the industrywide
adoption of standards that speak to repeatability of
process regardless of constraints, interoperability,
part’s structural integrity, among other QA-related
concerns. Practitioners seem heartened that or-
ganized efforts are underway to articulate AM
standards by industry stakeholders.2 But until such
time that AM standards are widely adopted, QA—
and all that relates to it—will likely remain square
center in the minds of practitioners.3
DIGITAL THREAD
“From tracking your capacity to tracking jobs
and your suppliers, the digital thread is ab-
solutely essential.”
—Terry Wohlers, Wohlers Associates
Few things seem more certain than the role that
a fully functional digital thread will play if AM is ever
going to achieve critical mass at the industrial level.
But why do practitioners—those who attended the
Austin event and others—often place such emphasis
on the digital thread? Because AM is fundamentally

FIGURE 2

Digital thread for additive manufacturing

SCAN/DESIGN + ANALYZE BUILD + MONITOR TEST + VALIDATE DELIVER + MANAGE

Quality assurance + part validation/verification of information flow

Digital twin
Data verification
established
In-situ monitoring + twinning
(runs parallel
to DTAM) Digital twin
Part fabrication
(3D print process) updated Part
CAD file created
end-of-life
Part
Design + scan Build inspection
feedback

Traditional
Per-part
analysis Part field
Build simulation, post-processing
Advanced detailed build plan and finishing service sensing +
Product inception: multiphysics + machine data inspection
DTAM begins modeling and
simulation
Continuous improvement of information flow

Digital thread Digital twin Body of knowledge

(grows throughout the process)

Source: Deloitte analysis.

Deloitte Insights | deloitte.com/insights

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3D opportunity for supply chain readiness: Taking the pulse of industry
about a digital process from start to finish, and the
digital thread represents that “seamless strand of
data” that links the entire AM value chain—from
concept to delivery. The digital thread is, in effect,
4
that information “backbone” that enables the AM
manufacturing process to scale.5 For all of its im-
portance though, the digital thread can still confront
notable challenges that concern the interoperability
of its constituent phases, among others. Until such
gaps in interphase connectivity are fully reconciled,
critical information will likely remain siloed and not
fully transparent to all stakeholders across the thread.
DATA INTEGRITY AND PROTECTION
“[AM] gives hackers novel ways to wreak
havoc.”
—Dr. Eleftherios Iakovou, Texas A&M
It is axiomatic: Without data, nothing gets
printed. Yet because AM is fundamentally data-
driven, risks that touch upon data integrity and
protection abound. For wide-scale adoption of AM
to become a reality at the enterprise level, people
will need an abiding faith in the integrity of the
data—that it is secure from threats and not improp-
erly altered in any way. Still, practitioners recognize
that we live in a world where the risk of unauthor-
ized access to data is quite real—whether the intent
is to steal or maliciously alter that data. Cyberse-
curity is, of course, an industrywide concern as the
digital thread builds out and the number of relevant
stakeholders proliferates.6 It could also require
solutions quite distinct from the underlying AM
technology itself. Toward that end, one idea that is
gaining currency within AM is the use of blockchain,
a distributed ledger technology that may provide
stakeholders across the digital thread an enhanced
sense of trust in the authenticity of data. 7
6
TALENT
“So absolutely, there’s tremendous oppor-
tunity, but [finding] skilled workers [is] the
challenge that we’re facing right now.”
—Petra Mitchell, Catalyst Corporation
In any skill-based industry, talent is always an
issue. Such is especially the case in a skill-based
industry that is still relatively new, like AM. That
the search for skilled workers is exacerbated in a
strong economy is self-evident. But the larger stra-
tegic challenge for AM—and emerging sectors like
it—seems the relative lack of organized training in-
frastructure that other, more established skill-based
industries enjoy. As AM becomes increasingly a part
of the manufacturing mainstream, training pipe-
lines will likely become better organized.8
A few thoughts about
the future for AM
“[T]he future is a range and not a discrete
point and so getting there takes a series of
small steps, but it does also require action
in the near term.”
—Greg Hayes, EOS North America
However important they may be, these issues
are merely representative of what is front of mind
among many industry practitioners. Conference par-
ticipants spoke of other issues as well, ranging from
AM tax policy to the AM business case, and beyond.9
Still, that these kinds of practical real-world issues
are so much the source of current thinking and
concern should hearten AM leaders as they speak to
an industry that is vibrant and in ascension.
 3D opportunity for supply chain readiness: Taking the pulse of industry
But what did practitioners think lies ahead for
AM? To be sure, any discussion of the future for AM
is framed in far less theoretical terms than it once
was. But at any given time, there is always a future
and what it may bring is a matter of great interest to
all stakeholders. But now, AM leaders characterize
the future in grounded, plausible terms, continuing
the kinds of real-world advancements in AM that
have enabled the industry to get to this point—ma-
terial properties and variety, printer speeds and
7
sizes, IP protection, supply chain reconfiguration,
skills gap, industrywide standards, cybersecurity,
return on investment, serial production, and more.
Such expression of the future points to an AM
sector that remains vibrant and still evolving. But
it also points to an AM sector that may be entering
a new phase of maturation as the technology bears
fruit in increasingly variable and cost-effective
ways within an increasing variety of manufacturing
supply chain environments.
3D opportunity for supply chain readiness: Taking the pulse of industry

Endnotes

1. Beau Jackson, “Safran certifies 3D printed turbine nozzle for use in helicopter engines,” 3D Printing Industry, June
20, 2017; James Wynbrandt, “Norsk earns Boeing approval for titanium parts,” AIN Online, July 15, 2018; Victoria
Bryan, “Aerospace suppliers look to blockchain for parts tracking,” Reuters, May 2, 2018.

2. Brian Tilton, Ed Dobner, and Jonathan Holdowsky, 3D opportunity for standards: Additive manufacturing measures
up, Deloitte Insights, November 9, 2017.

3. Ian Wing, Rob Gorham, and Brenna Sniderman, 3D opportunity for quality assurance and parts qualification:
Additive manufacturing clears the bar, Deloitte University Press, November 18, 2015.

4. Mark Cotteleer, Stuart Trouton, and Ed Dobner, 3D opportunity and the digital thread: Additive manufacturing ties
it all together, Deloitte University Press, March 3, 2016.

5. Ibid.

6. John Brown et al., 3D opportunity and cyber risk management: Additive manufacturing secures the thread, Deloitte
University Press, August 23, 2016.

7. Stuart Trouton, Mark Vitale, and Jason Killmeyer, 3D opportunity for blockchain: Additive manufacturing links the
digital thread, Deloitte University Press, November 17, 2016.

8. Eric Vazquez, Michael Passaretti, and Paul Valenzuela, 3D opportunity for the talent gap: Additive manufacturing and
the workforce of the future, Deloitte University Press, March 24, 2016.

9. For a deeper perspective on these issues, see Deloitte Insights, Additive manufacturing collection.

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 3D opportunity for supply chain readiness: Taking the pulse of industry

About the authors

JONATHAN HOLDOWSKY is a senior manager with Deloitte Services LP and part of Deloitte’s Center for
Integrated Research. In this role, he has managed a wide array of thought leadership initiatives on issues
of strategic importance to clients within consumer and manufacturing sectors. Holdowsky’s current
research explores the promise of such emerging technologies as additive and advanced manufacturing,
Internet of Things, Industry 4.0, blockchain, among other areas. Holdowsky is based in Boston.

JOHN WILCZYNSKI is the technology director of America Makes, which is based in Youngstown, Ohio.
America Makes is operated and managed by the National Center for Defense Manufacturing and
Machining. In this role, Wilczynski’s responsibilities include the facilitation of the National Additive
Manufacturing/3D Printing road map, the development of an Intellectual Property (IP) Management Plan,
the execution of the Project Call Process for Agency-Driven and Cooperative-Agreement-Driven project
solicitations, and technical oversight of the America Makes project portfolio.

Acknowledgments
The authors would like to thank Rob Gorham of America Makes as well as Mark Cotteleer and Brenna
Sniderman of Deloitte Services LP for their contributions to this paper.

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3D opportunity for supply chain readiness: Taking the pulse of industry

About the Deloitte Center for Integrated Research

Deloitte’s Center for Integrated Research focuses on developing fresh perspectives on critical business
issues that cut across industry and functions, from the rapid change of emerging technologies to the
consistent factor of human behavior. We uncover deep, rigorously justified insights and look at transfor-
mative topics in new ways, delivering new thinking in a variety of formats, such as research articles, short
videos, in-person workshops, and online courses.

Establishing and scaling additive manufacturing capabilities across your product development
life cycle demands a thoughtful approach to strategy and execution. To effectively scale additive
manufacturing to its fullest benefit, you need the right support. Deloitte has the digital trans-
formation experience and ecosystem capabilities necessary to help redefine your organization
through additive manufacturing and understand how the technology can improve your bottom
line. Reach out to the contacts for more information or read more about our additive manufac-
turing services on Deloitte.com.

10
Contacts
Mark Cotteleer
Research director
Center for Integrated Research
Deloitte Services LP
+1 414 977 2359
mcotteleer@deloitte.com
Jonathan Holdowsky
Senior manager
Center for Integrated Research
Deloitte Services LP
+1 617 437 3198
jholdowsky@deloitte.com
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