Contributed by Elise Couston, Senior Managing Director at Newmark Grubb Knight Frank
Is there a new industrial revolution on the way? 3-D printing, also known as additive manufacturing, is a relatively new production technology that is predicted to have far-reaching impacts on most aspects of our lives. Even though the technology is in its infancy in terms of current implementations, 3-D printing is beginning to dramatically change the way products are created and produced, which could alter the future of demand for industrial and retail real estate.
3-D manufacturing is defined as the process of making three-dimensional solid objects from a digital file. Using an additive process, the printer creates an object by laying down successive layers of material until the entire object is produced. Each of the layers can be seen as a thinly-sliced horizontal cross-section of the final product.
The original additive manufacturing (AM) equipment and materials were developed in the 1980s. In 1981, Hideo Kodama, of the Nagoya Municipal Industrial Research Institute, invented two AM fabricating methods of a three-dimensional plastic model with photo-hardening polymer. The first commercial 3-D printer was based on a technique called “stereo-lithography”, or STL, invented by Charles Hull of 3-D Systems Corporation in 1984. Hull’s contribution is the design of the STL file format widely accepted by 3-D printing software, as well as the digital slicing and other infill strategies common to many processes today. Subsequent techniques were developed at Stanford and Carnegie Mellon in the 1990s, and there have been many technical improvements and changes over the last twenty-five years.
Additive manufacturing replaces the former subtractive process of cutting, drilling, and bashing metals. The additive process requires less raw material because software drives the 3-D printers instead of physical tools. These printers can also produce ready-made objects that require less assembly, and items that were a struggle for the older, more traditional methods such as gloves, medical implants and devices, and parts for cars and airplanes.
As 3-D printers have become more capable and able to work with a broader range of materials including production-grade plastics, nylon, stainless steel and titanium, the machines are being used increasingly to make final products instead of just prototypes. The process starts with making a virtual design of an object in a CAD (Computer Aided Design) file. A totally new object can be mocked up from scratch by using a 3-D modeling program or an existing object can be scanned, resulting in an identical 3-D digital copy of the object.
The printing of parts and products could potentially transform manufacturing because it lowers the production costs and risks. The manufacturer is no longer required to make thousands, or hundreds of thousands, of items to recover its fixed costs. 3-D printing replaces the need for mass manufacturing of identical parts, as this process allows for a larger amount of customization.
Airplane manufacturers were one of the first to recognize the savings of 3-D printing. Even small airplanes contain several tons of parts made of aerospace-grade titanium. In the past, when replacement is needed, a new part was made in the subtractive fashion, resulting in up to 90 percent of the raw material being cut away to reveal the final object. To create the same part by additive manufacturing, a titanium powder is used to start. The 3-D printer will spread a layer of about 0.02-0.03mm thick onto a tray where it is fused by lasers or an electron beam. Any surplus powder can be reused. Some objects may need a little machining to finish, but they still require only 10 percent of the raw material that would have otherwise be needed. Additionally, the process uses far less energy than with more conventional machining, and it can sometimes be faster.
Some of the important benefits to 3-D manufacturing going forward include: Increased manufacturing in the U.S.; Products are of improved quality and more customizable; Printed parts are about 60% lighter but just as sturdy; A reduction of leftover parts also reduces waste and saves money; Increases opportunities for innovation and faster time to the market
Even non-traditional manufacturers are adopting 3-D printing technology. The Wall Street Journal recently reported that United Parcel Service Inc. is trying to get ahead of the manufacturing movement towards this printing. The parcel carrier recently invested in 100 industrial-grade 3-D printers to make everything from iPhone accessories to airplane parts. UPS is trying to understand the impact 3-D printing will have on its business model, and they’re not the only ones—Amazon.com and FedEx also have their own studies underway.
Many consumer tech companies, like Microsoft and Google, have enabled their hardware to perform 3-D scanning. This seems to be an indication that future hand-held devices, such as smart-phones, will have integrated 3-D scanners. In the future, digitizing real objects into 3-D models will become as easy as taking a picture.
It’s possible that the advances in 3-D manufacturing may result in a negative demand for industrial space over the next 10 years, and create the need for fewer employees. Additionally, consumers won’t need the “hands-on” sampling of products in a store to the same extent, likely reducing the need for brick and mortar retail stores, which are already feeling the effects of increased online sales.
Is all of this to say that we are witnessing a major paradigm shift in manufacturing? Will 3-D printing impact both the supply chain and the users’ requirements for industrial and retail space?
It’s likely that the more efficient and cost-effective aspects of 3-D printing will result in bringing more manufacturing back to the U.S. and closer to companies’ core operations. This business strategy could offset the risks of off-shoring manufacturing operations, create significant cost savings, and shorten longer, uncertain lead times historically required to satisfy customer demands. With the development of new technologies, such as 3-D printing, being closer to the customer and consumer is emerging as “the new normal” in many business operations.