Charles R. Goulding and Preeti Sulibhavi consider how 3D printing can contribute to the evolution of just-in-time inventory strategies.
When the front page of the New York Times has an article covering how just-in-time (JIT) inventory fell short of time during the pandemic, you know just how far-reaching supply shortages actually were.
History of JIT
Thanks to Toyota and the Japanese, just-in-time was introduced to the auto world and not long after, other manufacturing sectors as well. JIT involves parts and components to be delivered right as they are needed, minimizing the need for stockpiling and huge inventories. Over the last few decades, JIT has had effects beyond the auto industry as it helps companies remain flexible in adapting to market demands while cutting costs.
Then comes COVID-19. The global pandemic disrupted global supply chains, making many industries vulnerable to major disruption. This is where 3D printing can help JIT be on time.
JIT and 3D Printing
Electronic components are a burgeoning market focus within the 3D printing industry. While several methods exist for 3D printing electronic components, generally it is accomplished by utilizing a dual-material fused filament process with conductive thermoplastic filaments. These thermoplastic filaments are often made with copper, but occasionally carbon and graphene are used instead. The latter is more brittle than copper, however, and there is a tendency to shatter when subjected to significant vibrations.
As with all 3D printing, a digital CAD model of the desired part must first be designed. This will serve as the printer’s instruction model, providing it with all the dimensional data required to build the component. Once the printing process begins, a trace is created (a component part’s “fingerprint”), and then the requisite materials needed for that specific part are added in layers.
One key challenge when it comes to 3D printing electronic components compared to other 3D printing projects is the need to use wider and thicker traces to compensate for the fact that the conductive ink, paint or filament utilized to build the traces has a higher resistance than the copper that is commonly used.
Many companies have already made significant inroads into overcoming the numerous technical challenges posed by 3D printing complex components, allowing them to produce systems that are increasingly scalable and efficient. One such company is Nano Dimension.
Just-In-Case Inventory
The just-in-case inventory removes all excess waste during the production process to save valuable time and effort. The COVID-19 pandemic presented numerous examples of supply chain disruptions not only for personal protective equipment (PPE) but also for standard components such as global auto parts. Recently, because of this pandemic, the use of these supply chains has been very relevant and further appreciated. 3D printing, with the help of JIT, can provide the needed supply chain protection while eliminating both risks and shipping costs. This is now being called Just In Case inventory.
The world after COVID-19 will be very different with much more caution and control. 3D printing has already demonstrated its value during the COVID-19 crisis with the manufacture of PPE and ventilator parts. Just-in-time enhanced with 3D printing is an excellent way to secure the ongoing situation.
The Research & Development Tax Credit
Whether it is used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.
Enacted in 1981, the now permanent Federal Research and Development (R&D) Tax Credit allows a credit that typically ranges from 4%-7% of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:
- Must be technological in nature
- Must be a component of the taxpayer’s business
- Must represent R&D in the experimental sense and generally includes all such costs related to the development or improvement of a product or process
- Must eliminate uncertainty through a process of experimentation that considers one or more alternatives
Eligible costs include US employee wages, cost of supplies consumed in the R&D process, cost of pre-production testing, US contract research expenses, and certain costs associated with developing a patent.
On December 18, 2015, President Obama signed the PATH Act, making the R&D Tax Credit permanent. Since 2016, the R&D credit has been used to offset Alternative Minimum Tax (AMT) for companies with revenue below $50MM and, startup businesses can obtain up to $250,000 per year in payroll tax cash rebates.
Perfect Timing
Just-in-time is not a thing of the past. The post-COVID-19 world is in need of progression and improvement and 3D printing can be of help. The additive manufacturing industry can help fill supply chain disruptions and keep things moving smoothly.
