The Future of Logistics at DHL: 3D Printing to Disrupt
3D printing is forcing logistics companies, including DHL, to rethink their service offerings.
The logistics industry is ripe for disruption as technological advancements in 3D printing are making the widespread adoption of instant production models a not so distant reality. 3D printing, also known as additive-manufacturing, utilizes digital models to create objects by printing successive layers of materials, which enables manufacturers to produce a single part in one operation as opposed to having to produce multiple components that are assembled into one part. The resultant cost savings for manufacturers are expected to be in the range of 35% to 65% per printed product.  Traditional manufacturing generally requires materials to be sourced and shipped from multiple locations to a factory where final goods are produced and subsequently stored in a warehouse, before being delivered to stores or consumers. In a world dominated by 3D printing, the traditional manufacturing process will be almost entirely overhauled as goods will be printed out close to, or perhaps even by, the consumer, eliminating the need for items to be transported halfway around the world.  As one can imagine, this has the potential to upend global logistics companies whose core business is to ship items around the world. In terms of the potential magnitude of this shift, McKinsey projects the global 3D printing market will grow exponentially over the next decade, from approximately $4 billion in 2015 to between $180 billion and $490 billion by 2025. 
DHL is a global logistics company with a vision, according to its website, to be the “Logistics Company for the World” by offering “a remarkable range of logistics solutions – from mission-critical express deliveries to economical freight transportation, from taking the complexity out of customs to managing the complexity of global supply chains and everything in between.”  In order to continue to realize this vision in a world where 3D printing is widely adopted by manufacturers, DHL understands that it will have to alter its range of logistics solutions. In a company report, DHL acknowledged, “we anticipate change from 3D printing that is both broad and deep, specifically in areas of spare parts manufacturing, individualized parts manufacturing, and end-of-runway 3D printing services.” The company is already exploring methods to incorporate 3D printing into its core services, and views the end-to-end spare parts on-demand space as a potentially promising entry point. Hundreds of millions of spare or replacement parts are held in storage by companies for many years after sales occur, some of which may never even be needed, which can be costly for companies. [2,5] With the successful adoption of 3D printing, companies will no longer have to store spare parts in warehouses, as they will be able to simply print the parts on demand. Rather than having companies print spare parts in-house, DHL is seeking to offer a rapid-delivery solution whereby it will create a network of 3D printers located in warehouses and distribution centers around the world. Under such a system, manufacturers would provide DHL with a 3D data model for each spare part, and DHL would process, print, and deliver the spare part order directly to the customer on demand. 
While DHL continues to pursue this vision of creating a spare parts on demand service over the next three to ten years, the company has not yet been able to make a viable business case due to the costs for materials, hardware, and shipping.  Despite this, DHL should continue to allocate resources to this initiative and establish an actionable blueprint for implementation, given that over the next few years the costs of 3D printing should be expected to decrease as the technology progresses to a point where the business case becomes viable for DHL. When this happens, the barriers to entry within this space will be much lower, so DHL will want to be a first mover. Additionally, DHL should consider diversifying its potential 3D printing service offerings so that it is not solely dependent on manufacturers. One way to do this would be to establish brick and mortar 3D print shops for businesses and consumers, like the UPS or FedEx stores that exist today.
While the idea of DHL entering the 3D printing space through an on demand spare parts service seems appropriate, there are certainly some questions that still must be answered. Does DHL have the capability and expertise required to incorporate 3D printing into its service offering? Will manufacturers be willing to share blueprints with DHL for proprietary products? Is this service offering just a short-term fix to a potentially existential issue for logistics companies if the use of 3D printing penetrates all households, ultimately limiting the need for DHL to the shipment of raw materials and 3D print cartridges?
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 McKinsey & Company: Digital McKinsey. “Disruptive technologies: Advances that will transform life, business, and the global economy.”
[https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/disruptive-technologies], accessed November 14, 2017.
 DHL Trend Research, “3D Printing and The Future of Supply Chains” (PDF file), downloaded
from DHL website, [http://www.dhl.com/content/dam/downloads/g0/about_us/logistics_insights/dhl_trendreport_3dprinting.pdf], accessed November 14, 2017.
 Tasha Keeney. “3-D Printing: Analysts Are Underestimating The Future.” Seeking Alpha, February 3, 2015. [https://seekingalpha.com/article/2877996-3-d-printing-analysts-are-underestimating-the-future], accessed November 2017.
 DHL. “Our Vision, Our Mission, Our Strategy.” [http://www.dhl.com/en/about_us/company_portrait/mission_and_vision.html], accessed November 2017.
 AEB, “Six theories about how 3d printing will change logistics” (PDF file), downloaded
from Google, [http://documents.aeb.com/brochures/en/aeb-white-paper-3d-printing.pdf], accessed November 14, 2017.
Student comments on The Future of Logistics at DHL: 3D Printing to Disrupt
Great read! I agree that 3D printing will become an integral part of the lives of individuals and businesses in the near future. I also do think that highly customizable spare parts will be one of the first areas addressed. However, I’m not sure if DHL is the best positioned to capitalize on this opportunity. Since 3D printing costs are predicted to drop dramatically over the next few years , the capital expenditure on 3D printing equipment will eventually become negligible. The value proposition 3D printing offers is cost and convenience. I believe DHL does not add to either. DHL does not have expertise in manufacturing, thus does not have a competitive advantage on the cost side. Additionally, other companies like Walmart have a much larger footprint and can provide consumers with proximity if they need to pick up a part quickly, thus offering more convenience. That being said, integrating DHL’s delivery service with the 3D printing business may lead to reduced lead times. I, however, believe these times are negligible. In my mind, DHL incorporating 3D printing into their core business is no different from them going into e-commerce. I don’t think it’s a great idea given that it’s not their core competency. However, if they do establish themselves in this industry early, they may gain significant footing due to the first mover advantage. Only time will tell.
 Nichols, Greg, “Promising trend for innovators: 3D printer prices are falling,” http://www.zdnet.com/article/promising-trend-for-innovators-3d-printer-prices-are-falling/.
The advancement in 3D printing technology poses an interesting challenge for logistics companies like DHL. It seems DHL has no choice but to diversify their business offerings unless they wish to shrink along with the logistics market.
I’m curious what manufacturer and consumer demand for raw materials shipments is forecast to be with widespread adoption of 3D printing. Although it might be smaller than today, a market for traditional logistics seems necessary regardless of distributed manufacturing technology.
Perhaps DHL can differentiate itself and capture share of the future logistics market by investing in data sharing and security infrastructure. In an age where 3D printing is ubiquitous, IT infrastructure – enabling demand forecasting, product customization, etc. – could be the foundation of the new customer value proposition for logistics companies.
Interesting to read how 3D printing can affect a company like DHL, especially how big the threat is. I would really like to dig deeper into DHL number’s to see how much or their revenue comes from shipping things that can eventually be 3D printed. Considering it is an important figure I would definitely be thinking in how to best serve the portion of the market that can not be 3D printed. I do not believe DHL should enter the 3D printing business, especially for the mentioned risk of proprietary information that seems unlikely to be shared. Looking into the future, DHL should be thinking in how to differentiate itself from a customer service, operational effectiveness and overall supply chain perspective in the products that cannot be disrupted by this technology. If they play ahead of the game, they can prevent some of the impact.