President, Global Industrial Market
Price Cutting at the Bottom of the Pyramid
At the end of April, the pharmaceutical company AstraZeneca surprised the markets by announcing an 11 percent jump in revenue.
3D printing started out as a novelty invention and grew to become a small but fast-growing part of the manufacturing world. Now, COVID-19 has given a whole new meaning to the value of this technology in today’s gridlocked world of supply chains.
Used for creating everything from oil rig replacement parts to artificial skin for a cosmetics maker, the technology could be an important answer to companies that outsourced heavily and now find themselves helpless. The technique, of course, employs computer codes to allow for the production of items via local machines, eliminating the need for a far-flung manufacturer.
Already, 3D printing has been deployed during this emergency situation to make much-needed medical equipment in Europe, says Yannick Binvel, Korn Ferry’s president of global industrial markets. A hospital in Paris has set up 60 3D printers to produce what the medics need. That includes ventilator parts, face shields, as well as other vital items. “This sort of thing was not thought possible three weeks ago, yet it is happening today,” Binvel says. “It is bringing stuff to end users with shortages.”
To be sure, the technology is generally considered too slow for mass production, and it only accounts for less than $10 billion of the $12 trillion global manufacturing orbit. But experts say it’s been growing at double-digit annual rates and is likely to ramp up now given the supply-chain nightmare gripping firms across the globe.
On a broader scale, experts also believe more home-based manufacturing is like to spring up as well. In Britain, businesses were already planning for some supply disruption around the country’s departure from the European Union. But the coronavirus outbreak notched the matter up a few levels and pointed out the country’s industrial weakness, says Peter Cave-Gibbs, a Korn Ferry senior client partner. Both Britain and Germany needed special equipment to fight the virus, but the UK was in worse shape because it didn’t have the production capability of its mainland counterpart. “It gets people thinking about bringing things closer to home,” says Cave-Gibbs. “After this crisis, there will be a move away from having all of our eggs in one basket.”
If every auto repair shop had a 3D printer, then the parts manufacturing companies could potentially become intellectual property companies, says Rory Singleton, another Korn Ferry senior client partner. At least some of the parts could be made by 3D printers inside the auto repair shops, which would churn out the requested item only when needed. That would reduce the need for huge wholesaler inventories of unused parts. “In terms of supply chain logistics, there may be change, and this crisis might be an impetus,” Singleton says.