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The Imminent Impact of 3D Printing on Manufacturing

A triple-whammy of recently published reports highlight current and impending trends in 3D printing.

Impact 3D printing will have on manufacturing

The global market for 3D printing is set to grow from $4.5 billion today to $17.2 billion by 2020, finds research by A.T. Kearney.

According to the analysis titled ‘3D Printing: A Manufacturing Revolution’, the 3D printing market – defined as the market for hardware, supplies and services – is set to boom over the coming five years. Today the market is worth approximately $4.5 billion, with Aerospace (including Defence) and Industrial (including Construction) both accounting for18 per cent of the pie, followed by Healthcare at around 16 per cent. The Automotive and Jewellery sectors both represent a 12 per cent market share, while Energy holds 5 per cent, with the remainder taking about 20 per cent of the share.

Benefits of 3D printing

The boom in the application of 3D printing is based on several benefits the technology has over traditional forms of manufacturing, which according to A.T. Kearney can be bundled across five dimensions.

1. Mass customisation – the technology will allow people to create items build to the specifications of customers, with custom-built designs opening up a wealth of possibilities.

2. New capabilities – items can be mass produced without high-fixed capital costs related to specific design.

3. Lead time and speed – the technology allows for = printing in a wide range of mediums on the basis of data templates, benefiting the whole design and production process, ultimately leading to reduced lead time and speed to market.

4. Supply chain simplification – with printers easily deployable and moveable, the whole process can be enacted close to markets, thereby requiring less inventory.

5. Waste reduction – unused base material can be used in a variety of other products, and only what is needed is used, thereby reducing the waste of offcuts, among others.

There’s riches in the 3D material supply chain…

Research compiled by Smartech examines the future of current material supply chains for the key plastics used today in 3D printing.

Many 3D printer firms are racing to fill out their plastic material portfolios and are using them to create competitive advantages. At the same time, major materials companies are also starting to see 3D printing as a profitable niche market worth jumping into now, with the promise of large opportunities down the road.

The quantity and quality of plastic materials available for 3D printing systems are key determining factors in the number of 3D printer purchases.

The report hereby goes into detail on the idea of plastics as a source of competitive advantage for 3D printer firms. Since many OEMs are looking to plastic materials as a source of substantial revenues over the next few years, 3D printing firms have set about acquiring materials to force development themselves. This inexplicably raises questions about the future role of the OEMs – will they even be needed in the 3D printing factories of the future?

A further piece of research taken on by leading 3D printer manufacturer – Stratasys, proves that 3D printing is THE trend of the moment…

Stratasys’ report is based on an independent survey of 700 designers, engineers and executives – 40 percent of whom are employed by companies with over $50 million in revenue.

“We needed to look beyond our factory walls to get a more complete sense of where 3D printing is headed, so we turned to those who live and breathe the technology just like we do – professional users,” said Joe Allison, CEO of Stratasys Direct Manufacturing. “We set out to uncover the common themes among companies who are on the spectrum of larger-scale adoption and integration of 3D printing into their manufacturing process. We’re sharing our findings to help advance adoption and help manufacturers’ maximise the business benefits.”

Trends in 3D printing

The report indicates what applications, business benefits and challenges, equipment, materials and services are capturing the attention of 3D printing’s most committed users – and where their companies will invest. Among the more attention-grabbing of the results are the following:

  • The majority of respondents – representing the aerospace, automotive, consumer and medical sectors – strongly believe more end-use parts will be designed specifically for additive manufacturing (AM) in the future
  • Additive metal use is expected to nearly double over the next 3 years
  • The majority of respondents said that regardless of their company’s in-house AM capabilities, they believe there will always be value in partnering with an AM service provider to augment internal capabilities

“The results may serve as a wake-up call to take swifter action,” added Allison.

Air Cargo Takes A Dive In Half-Year Industry Report

Government meddling in China, the Greek debt crisis, and West Coast Port shutdown all have a role to play in the industry’s downturn.

Is the air freight industry in trouble?

The International Air Transport Association (IATA) has released its report on the state of global air freight markets – and it doesn’t make for happy reading…

By delving deep into the data we are able to observe that regional performance varied widely across the board. Asia-Pacific, North American and Latin American carriers reported year-on-year declines (-0.3 per cent, -3.3 per cent, and -1.6 per cent respectively) while European carriers reported that markets were flat. This was offset by the strong performance of Middle Eastern (+15.3 per cent) and African (+6.7 per cent) carriers to keep growth in positive territory.

The general trend of a weaker 2015 compared to 2014 can be seen in the half-year data. Air freight markets expanded by 5.8 per cent in 2014; however year-to-date growth for 2015 stands at 3.5 per cent.

Tony Tyler, IATA’s Director General and CEO comments: “The half-year report for air cargo is not encouraging. With growth of just 1.2 per cent over June last year, markets are basically stagnating. Some carriers are doing better than others at picking up the business that is out there. But overall it has been a disappointing first half of 2015, especially considering the strong finish to 2014. The remainder of the year holds mixed signals. The general expectation is for an acceleration of economic growth, but business confidence and export orders look weak. Air cargo and the global economy will all benefit if governments can successfully focus on stabilizing growth and stimulating trade by removing barriers.”

The data goes into granular detail for the June period – showing a clear slowdown in growth for air cargo demand. Air freight volumes measured in freight tonne kilometers (FTK) rose just 1.2 per cent compared to a year ago. This is consistent with falling trade activity and weaker than expected global growth.

How did each region fare?

IATA has provided analysis for every region detailed in the report – a summary is provided below:

Asia-Pacific
The region has experienced a notable slowdown in imports and exports over recent months, and latest data shows emerging Asia trade activity down 8 per cent. Growth for the year-to-date was 5.4 per cent. In addition to generally weak trade growth, the region is the most exposed to the China market where government policies are more focused on stimulating domestic markets.

Europe
Improvements in Eurozone business confidence have not led to increased air freight demand, and consumer confidence has been hit by the Greek crisis. Growth for the year-to-date was -0.6 per cent.

North America
The positive impact of a modal shift to air as a result of the West Coast ports strike has faded and economic performance, despite some improvement in the second quarter, is subdued. Growth for the first six months of the year was -0.4 per cent.

Middle East
Airlines in the region have pursued a successful hub strategy connecting both long- and short-haul markets. Although some major economies in the region have seen slowdowns in non-oil sectors, economic growth remains generally robust, which is also helping to sustain demand for air freight. Growth for the year-to-date is running at 14 per cent.

Latin America
Regional trade activity has grown in the first half of 2015, despite continuing weakness in Brazil and Argentina. Unfortunately this has not translated into stronger demand for air freight. Growth for the year-to-date was -6.9 per cent.

Africa
The Nigerian and South African economies have under-performed for much of the year so far, however regional trade has held up. Demand growth for the first six months was 4.8 per cent.

To Make A Difference CPOs Must Have The X Factor

Do You Have The X Factor?

Ahead of the upcoming CIPS Australia event, Procurious caught up with Dr. Karen Morley, one of the event’s distinguished presenters. Karen has extensive experience working with organisations, teams and individuals to increase their leadership effectiveness.

Over her career Karen has led a broad range of leadership development, succession and talent management assignments. She emphasises evidence-based approaches tailored to suit the organisation/firm’s context.

Today Karen is talking about what makes great procurement leaders and how to successfully move technical procurement experts into managerial positions.

Procurious asks: At the upcoming CIPS Australia conference you will be discussing a piece of research you produced for The Faculty that looks to distinguish the very best CPOs from the rest. What would you say are the traits that separate the great CPO’s from good CPOs?

Karen: That’s right, I will be presenting the findings of our X Factor research. The report addresses the importance of great leaders in the procurement function.

To answer your question, I would say the two things that make the great CPOs stand out from the rest are their interpersonal leadership attributes and the way they go about linking these relationships to the commercial direction of the organisation.

It is clear that the really outstanding CPOs nail commercial leadership. This stems from the fact that they possess an in-depth understanding of the whole business, not just procurement. They are engaged across the entire organisation and are speaking to other functional leaders on a strategic level. They are engaging with the board and CEO on what has greatest strategic value, and they interpret this through their procurement initiatives.

Once that strategic dialogue has been established, the next critical step is to ensure these messages are reaching staff further down the chain. It’s here that interpersonal skills become critical. Great CPOs have very close relationships with the people that report into them. They are able to align the goals and expectations of the business to activities of their staff.

Procurious: Can you provide any insight into what difference these ‘great CPOs’ can make for their organisation?

A lot of organisations are still focused solely on cost cutting. It’s a vital part of what procurement teams do and this will certainly continue to be the case. I think the difference that really great CPOs make is around moving discussions and activities to a more strategic level. They are not simply focusing on what can be cut out, but where savings can be made and value added at the same time.

I think that’s a pretty rare mindset. A lot of procurement leaders talk about value, but only a few can actually deliver it.

The costs cutting initiatives will always be there. It’s something that you can do successfully for a couple of years and come up with some impressive saving numbers. But, the challenge comes in finding what’s next. Once you’ve delivered those initial savings, then what are you going to do? The great CPOs realise they need to understand the business broadly and create close relationships across functions to see where procurement can best add value.

Which Of These Sixteen Personality Types Are You?

Which of these sixteen personality types fits you best?

Which of these personality types are you?

Isabel Briggs Myers created the sixteen personality types with the help of her mother, Katharine Briggs, and the theories of psychologist Carl Jung. Since then, much research has been done into how each type functions at work, at home, and in relationships.

A recent post in the Harvard Business Review pours salt on the Myers-Briggs Type Indicator (or MBTI for short), saying:

“Myers Briggs—and I would argue any personality assessment—is neither valid nor reliable. These tests identify a black and white version of people, a reduction of who they really are. They offer us the illusion of understanding at the cost of truth and freedom. Sure, they may make people more comfortable (‘Oh, I understand you now’). But it’s a trick.

It continues: “Self-assessments, by definition, reinforce a person’s self-image. You tell the assessment what you think you are like and then the assessment tells you what you are like. Which, of course, would incline you to think they’re valid. But they’re just telling you what you told them… Personality tests reinforce our blind spots.”

Not to be downhearted back in July we asked the Procurious community whether they thought there was a ‘typical’ Myers Briggs profile for procurement pros. There’s been 33 answers to-date, so it’s clearly a talking-point among members.

We’ve helpfully wrapped-up the results thus far (25/08)

ENTP 9, ENTJ 6, INTJ 5, ENFP 2, ISTP 2, ENFJ 1, ESTJ 1, INFP 2, INFJ 2, INTP 1, ISFJ 1, ISTJ 1

It appears the most common trait is ENTP and from 33 responders E is included in 19 out of 33 profiles.

Things to consider

Mike is just one of many who has asked an interesting question on the findings. He wants to know:

“Do you think you have a different profile depending on the role your fulfilling in the company? I run a consulting business and recently created a new commercial model for procurement, so maybe its no surprise I am currently a ENTP but I haven’t always been one.”

A few of you have picked-up on the changing classification too. Monica Palacios said: “I agree with the idea that we evolve with our roles. I took it at the beginning of my career ENTJ; some years before I found it was ENTP.”

Glen Lovett: “I’m an INTJ but given the changing face of procurement I would suggest that ‘E’ is becoming more valuable.”

Chris Roe notes: “We seem well represented for a type that makes up 3 per cent of the population in this sample…
I guess making decisions based on logic and facts rather than emotion is a desired trait!”

Judging by your individual test results there just may be some common traits among procurement professionals after all. Matt Cockfield exclaims: “Wow, what a great question. I’m not sure I ever thought of connecting the two — MBTI with the procurement discipline. Apparently, there is a correlation here!”

Do you see value in such tests, or are you like Iain Wicking who claims they’re just “a superficial way of assigning traits… I would not take it too seriously.”

Automation Can Unlock Savings In Accounts Payable

Research shows Accounts Payable Automation is a top trend when it comes to improving the procure-to-Pay cycle.

Accounts Payable

With enterprises realising the continued inefficiency of mostly manual, paper-based Accounts Payable (AP) processes, new research provides insight to the top trends for improving the procure-to-pay cycle.

 

According to “Total Transformation: Trends and Value Drivers for AP and Procurement,” written by Ardent Partners, top performing AP functions are indeed driving greater process efficiencies and delivering strategic value to the enterprise. Leading the way is the continued focus on AP automation. 83 per cent of respondents to Ardent’s survey believe that within two years, AP processes will be largely automated.

“Ardent Partners research has shown that automation is a critical element for enterprises seeking to drive value across their procure-to-pay processes,” said Andrew Bartolini, Chief Research Officer. “When P2P processes are linked and automated, procurement and AP groups can operate on a platform that promotes collaboration, visibility, and efficiency.”

Ardent found that following AP automation, stronger AP and procurement partnerships, evolving AP staff skillsets, and greater involvement in working capital optimisation are the top trends for greater efficiency. The research suggests that organisations of all sizes must leverage the strategies and technologies that can jointly transform AP and procurement, leading to significant competitive advantages.

“While many organisations are realising the benefits of AP automation, that is just one part of the equation,” said Jim Wright, Vice President of Sales at Corcentric. “This important research suggests that a more holistic approach and breaking down silos between procurement and AP is what will ultimately drive down costs and inefficiencies.”

4 Key Collaboration Takeaways That Will Make Your Job Easier

One of the key topics at the Big Ideas Summit 2015 was the concept of innovation in procurement and the supply chain. Many organisations look for innovative solutions from suppliers, but how easy are these to come by? And are suppliers rewarded for this?

4 key takeaways for successful collaboration

Saying that innovation is a key pillar for an organisation, and actually being able to successfully embed an innovation strategy, are two very different things. Supplier innovation can be tricky to nail down and many procurement departments are not looking in the right areas.

How it can work

For some organisations, it’s about working with the right suppliers. Craig Muhlhauser, CEO of Celestica, spoke at the Procurement Leaders ‘Ovation’ event in July, and spoke about how he brings about innovations for his organisation and for the companies they supply to.

According to Muhlhauser, both organisations need to be open to change in ways of working and ask questions in order to understand the other party’s point of view. Where procurement is concerned, Muhlhauser believes that the profession needs to be less prescriptive to suppliers, leave specifications more open and use the expertise of the supplier to uncover innovation.

This collaborative working relationship has successfully borne fruit across a number of industries. In the automotive industry, Brose, a German-based supplier, worked closely with its customers to produce a new door unit, way ahead of its rivals in terms of quality and innovation.

The key for Brose had been procurement on two sides – their customer, but also internally in order to allow them to build collaboration and trust with their own suppliers to make innovation a reality. Supplier collaboration has also helped to improve supply chain sustainability in the NHS in the UK and led to GAP Inc. being named the winner of the GT Nexus Innovation Award 2015.

Both positive examples have highlighted the work of procurement in supporting the innovation.

Why it fails

Failure to generate innovation, or sustain innovation in the supply chain can come down to a number of factors, although it would be hard to pinpoint one in particular as a key culprit.

A common issue can be with one or both parties not fully engaging in the process. In the Brose example, one supplier involved had to make a financial commitment before a production contract was signed. Payments like this are certainly not common, but here help to build the commitment and trust between the two parties.

Strategy is another common issue. Where strategy is too rigid, or where the strategy is simply pointing to procurement savings, innovation will suffer as the parties in question have approached it with the wrong mind-set. Where innovation is seen as a step to future learning and opportunity, research has shown that it is more likely to endure.

The other side to the strategy argument is that often procurement functions do not formalise the innovation process. Formal programmes are often reliant on senior stakeholder buy-in, something that procurement may struggle with if they lack credibility in the organisation.

Just Reward

While formal programmes and investment can help to drive innovation, it’s worth remembering that rewards or incentives for innovation will help the process. In some cases, procurement has been tasked with saving money, so spending more to achieve innovation is not rewarded.

Suppliers who feel like they will be supported and rewarded are more likely to go the extra mile and suggest innovation to procurement. Building incentivisation into contracts can help to formalise the relationship and underline the support on both sides.

The Real Question

“Is procurement open to innovation?”

That’s the real question. There are good examples of innovation in procurement and supply chains, but plenty more where there is inactivity or hesitance. Have we as procurement professionals been painted into a corner, where savings and the bottom line are the only things that are considered?

We better hope not, or, as Craig Muhlhauser argued, it’s adapt or cease to exist.

Have you got any good examples of innovation in your procurement department or supply chain? How do you encourage it? Let us know on Procurious!

Here are some other stories that are vying for our attention this week:

FTSE edges towards 6,000 after China shock

  • The FTSE 100 was down 2.9 per cent in the first minutes of trading this morning, after stocks in China closed more than eight per cent lower. The market was at 6,014 points, its lowest this year. If it falls below 6,000, it would be the first time it has fallen that low since the end of 2012.
  • The selloff came after a chaotic day of trading on Friday, when weaker than expected manufacturing data caused European markets to plummet. The FTSE closed 2.8 per cent lower, while the S&P 500 crashed below 2,000 points for the first time since February this year.
  • Meanwhile the Vix volatility index, also known as the “fear index”, spiked 16 per cent to 22.2 points. The Chicago Board Option Exchange Volatility Index is thought to be a gauge of investors’ nerves.
  • Markets had spent the past few days falling steadily, as investors worried the Chinese central bank would stop its support of the stock markets.

Read more on City A.M.

Hills chief defends close links with Woolworths’ Masters hardware chain

  • The new chief executive of battling Hills Ltd has defended an outsourcing deal for the company’s iconic Hills hoist clotheslines and garden products that means a large chunk of the range is sold through Woolworths’ ailing Masters hardware chain.
  • Grant Logan, who took over as chief executive of Hills from Ted Pretty in May 2015, says Hills shareholders will need to be patient as the company marks its 70th anniversary because it will take time to restore profits across the company to an acceptable level after major upheaval and transformation, which have resulted in the Hills share price tumbling to a record low.
  • Mr Logan also admitted that the integration of some of the businesses that Hills bought over the past couple of years had been handled poorly and exacerbated problems as the company transformed from an old-world manufacturer to one focused on security systems, communications and health services. “We moved too quickly and as a result, we wobbled our supply chain,” Mr Logan said on Monday.
  • Heavy write-downs foreshadowed on August 7 triggered a slide to a bottom-line loss of $86 million for 2014-15. This compared with a net profit after tax of $24.8 million a year ago.

Read more at The Sydney Morning Herald

Gap to test ‘Fast Fashion’ model in select stores

  • The San Francisco-based apparel retailer said it plans to test small batches of product in its Gap stores this spring and then quickly buy more if the goods are selling.
  • Popularised by fast-fashion chains like H&M, the model allows retailers to jump on trends and quickly adapt to changing shopper behaviour. The strategy has underpinned a turnaround at Gap’s Old Navy unit, which has posted a string of sales gains. This spring will mark the first time the retailer is using it at its namesake division, where sales have slumped. Gap Chief Executive Art Peck said on a conference call that the company was trying to build this capability as quickly as it can.
  • In addition to sourcing goods faster, Gap has hired new executives and closed underperforming stores. Profit fell to $219 million for the three months to Aug. 1, from $332 million a year ago, partly because of charges related to the Gap brand overhaul. The company said it expects to record $130 million to $140 million in restructuring charges for the year, including for the store closures.

Read more at The Wall Street Journal

 

GCC airport construction 2015-19 to grow by 8 per cent

  • The GCC’s airport construction market will grow at a compound annual growth rate (CAGR) of 7.86 per cent between 2014 and 2019, a report has found. TechNavio’s report, Airport Construction Market in the GCC Countries 2015-2019, states that airports offer numerous economic benefits to the region.
  • “GCC countries are well-known worldwide for the infrastructural achievements” provided by airports, such as job creation, tourism, and the facilitation of imports and exports.
  • “The oil-rich countries, in their efforts toward economic diversification, are investing heavily in transport infrastructure, such as roads, railroads, and airports,” the report continues.
  • Additionally, international events such as World Expo 2020 in Dubai, Qatar National Vision 2030, and 2022 FIFA World Cup in Qatar, “considered as brand-building events by the respective nations, have necessitated massive airport construction activity in these countries”, the report adds.

Read more at Arabian Supply Chain

NHS competition could waste millions says Labour, after Care UK complaints

  • Labour has warned that the NHS could be forced to spend millions on competition lawyers after the UK’s biggest private healthcare provider demanded an immediate investigation into a decision to award an elective care contract to a local health trust.
  • Care UK has been branded a bad loser after lodging a complaint with the NHS watchdog Monitor over the management of a contract by commissioners in north London.
  • Monitor has now begun an investigation into the decision by four GP-led clinical commissioning groups (CCGs) to award a contract to the Barking, Havering and Redbridge University Hospitals NHS Trust. The trust said it was extremely disappointed by the investigation and warned that it would delay the opening of a care centre.
  • Andrew Gwynne, the shadow health minister, said the new competition rules could force the NHS to waste millions on competition lawyers.

Read more at The Guardian

What’s In A Name?

If you want to become the top dog you had better change your name to Andrew…

What's in a name? Andrew comes top for UK bosses

As the ONS announces its annual list of most popular baby names for 2015, research from workwear manufacturer Stormline has revealed that when it comes to Britain’s bosses, there’s little variety and originality, as an homogenise collection of traditionally-named boys take up their seats in the UK’s board rooms for another day in the office.

The research shows that there are more men called Andrew than there are women running the UK’s top firms.

There’s a definite lack of diversity at the top, with the following seven names – Andrew or Andy, James, John, Peter, Ian, Mark or Marc or Richard  – representing 32 per cent of all UK bosses at top firms.

Just 6 per cent of Britain’s biggest 100 firms are women with bosses called Alison (Cooper, Imperial Tobacco), Melissa (Potter, Clarks Shoes), Lindsey (Pownall, Samworth Brothers) Theresa (T.J Morris), Anna (Stewart, Laing O’Rourke) and Veronique (Laury, Kingfisher PLC) representing female CEOs.

If you’ve got your eyes on running one of Britain’s biggest companies, it might help if you’ve got a traditional Hebrew (John, Ian) Greek (Andrew, Peter) or Latin (James, Mark) name. Your odds will also increase to better than 9/1 if you are a man.

Of the names on display in the 100 top board rooms around the UK, more than half (53 per cent) were one-offs; ranging from a Merlin, Jebb, Nicandro, Zameer and Pascal to Ralph, Jason, Nigel, Norman and Bob.

Men called Andrew currently bossing it in the UK’s biggest firms 

Andrew Witty – CEO, GlaxoSmithKline
Andy Hornby – Chief Executive, Gala Coral Group
Andy Harrison – CEO, Whitbread
Andy Parker – Chief Executive Capita
Andy Street – Managing Director John Lewis
Andy Long – CEO of Pentland Group (the Chairman is Andy Rubin)
Andrew Goodsell – CEO, Acromas Holdings (Saga Group & The AA)
Andrew Mackenzie – CEO, BHP Billiton 

Zameer (Choudrey, boss of Bestway Group), Jebb (Kitchen, boss of Bibby Line), Merlin (Bingham Swire, boss of Swire Group) and Nicandro (Durante, boss of British American Tobacco) make up the pick of most original boy’s names.

And although this survey is skewed towards the UK market, we’d be interested to learn what the name game is like elsewhere in the world. Can this oddity be repeated in your country?

National Coalition for Public Procurement formed in the US

A coalition for public procurement has been formed in the US.

Public procurement coalition formed in the US

Volunteers from three of the largest U.S. procurement programs for public agencies, educational institutions and nonprofit organisations have joined together to establish The National Coalition for Public Procurement (NCPP)

The NCPP will serve to drive best practices in public cooperative procurement, focusing on transparency, competition, integrity, auditability and process.

Marc Selvitelli (who will serve as NCPP’s Executive Director) said: “NCPP was founded on the belief that uniting customers and potential customers with national and regional purchasing organisations will ensure the most ethical and best business practices.”

NCPP’s founding organisations include the National Intergovernmental Purchasing Alliance Company, the National Joint Powers Alliance and The Cooperative Purchasing Network.

In addition to regular interactions with public procurement practitioners and contract purchasing organisations, NCPP will provide an independent forum for members to collectively address cooperative contract procurement concerns. Members also will have the opportunity to participate in advocacy issues with a united voice, and they will have access to a variety of resources to advance best practices in public procurement.

“A major factor in selecting SmithBucklin was its expertise in starting and managing a new organisation,” said Todd Abner, NCPP Chairman. “Additionally, SmithBucklin has substantial experience in managing associations that are active in procurement and supply chain.”

“It is a privilege to help launch NCPP,” said Matt Sanderson, Executive Vice President & Chief Executive, Business + Trade Industry Practice. “We look forward to helping establish NCPP as a powerful voice in advocating excellence in public procurement.”