Wednesday, July 9, 2014

Can USPS Deliver on the Promise of 3D Printing?

The imminent 3D printing revolution “might be a huge opportunity for the [U.S.] Postal Service," an in-depth study says. But, as usual with the USPS, where there are opportunities there are also caveats and hurdles.

First, let's dig through the study, which was released this week by the USPS Office of Inspector, to answer some basic questions about 3D printing and what it might mean for the Postal Service. Then we'll examine some of the challenges.

What is 3D printing? “At a very basic level, 3D printing is the production of physical objects from virtual representations,” the study notes. “This technology allows people to create physical objects out of digital designs — often building them one razor-thin layer at a time — and has the potential to democratize the means of production. Theoretically, anyone with a 3D printer can make virtually any object they can imagine and design, subject to some basic limitations.”

How is it being used? Best known for creating rapid prototypes and personalized knick-knacks, 3D printing is also producing replacement parts for jet engines, industrial tools, orthodontic devices, and even prosthetic limbs, says the report. It’s best suited for small, lightweight items that need to be customized or produced relatively quickly in small quantities.

So what's the big deal about 3DP? “A sweeping 3D printing revolution could radically change how some industries function, potentially transforming the notion of warehousing, removing some of the need for long-haul shipments, and bringing more manufacturing jobs back to the United States. In such a world, consumers might come to demand the customization enabled by 3D printing that they cannot get from today’s mass production techniques.” And even more important, for those of you who follow the latest business buzzwords, is that “3D printing has the potential to be amazingly disruptive.”

How big will 3D printing be? Despite some “unrealistic hype” about 3DP, the report cites a credible study projecting the industry will grow from $2.5 billion in 2013 revenue to more than $16 billion by 2018. And that may be just the beginning.

What does this mean for the USPS? “The Postal Service’s ubiquitous delivery network and its strength in handling lightweight goods” position it to benefit from the growth in purchases of 3D-printed products. “Other delivery firms often use the Postal Service for last-mile delivery. In fact, nearly two thirds of lightweight, commercial packages are delivered to their final destination by the Postal Service.” The most likely scenario is that 3DP will increase USPS’s commercial package volume by 18%, which would translate to $485 million annually based on FY2013 volumes, according to a consulting firm hired by the IG’s office.

Are there other revenue opportunities? The report envisions several. “The Postal Service could market itself as a logistics partner for 3D printing businesses located near Postal facilities, giving them a streamlined way to ship products quickly.” With “more than 60 million square feet of excess space nationwide, much of which is in mail processing centers,” the agency could lease space to such 3DP businesses as well. USPS could play a major role in the storing, shipping, and recycling of equipment and supplies for 3D printing. “The Postal Service could also help protect copyrighted or sensitive digital design files by providing a trusted online marketplace for transmission of designs.”

Could 3D printing help the Postal Service’s operations? USPS “could use 3D printers to create replacement parts for its vast fleet of aging delivery vehicles or its wide array of mail processing equipment. In some cases, the companies that originally designed the machines are no longer in business and are therefore unavailable to provide spare parts. This makes it costly and time-intensive for the Postal Service to fix the machines and it is likely that these repairs could be faster and cheaper with 3D printing.”

7 3D Printing Challenges for USPS
And now for the stumbling blocks that could stand in the way of a postal 3DP paradise:
  1. Delivery network: “The Postal Service’s benefit from 3D printing will be tied to the strength of its network. Weakening of the network — through reductions in important features like service frequency, number of delivery points, tracking and tracing services, or pick-up options — could result in the Postal Service forgoing new opportunities in 3D printing.” Pressed by declining demand and Congressional accounting gimmicks, USPS may be forced to cut back on the frequency and speed of delivery before 3D printing’s benefits can start kicking in.
  2. Delivery vehicles: “A 3D printing revolution could greatly exacerbate the need for redesigned, more parcel-ready vehicles,” the report says. But USPS’s aging fleet is hardly up to the task of handling current volumes. The agency is past due for replacing the majority of its 180,000-plus delivery vehicles, but cannot even start the process of doing that because it is basically insolvent.
  3. Sensitive materials: 3D printing typically involves spraying heated resins or powders through a nozzle, making it ill suited to producing some items, the report notes. “For example, a dashboard GPS mount printed with plastic can become soft or melt down entirely in a vehicle left in the hot sun.” So what will happen to 3D-printed items sitting for hours in a postal delivery vehicle with no air conditioning in 110-degree weather?
  4. In-home 3D: “Much of the buzz around 3D printing is based on the idea that people could one day use affordable, high quality in-home printers to make many, if not most, of the items they now purchase from retailers.” Though “improbable,” the report says, such a scenario “would be massively disruptive to the retail supply chain. It could lead to big cuts in brick-and-mortar and e-commerce sales, and a corresponding drop in the number of commercial packages shipped.”
  5. Mindset: Can a government agency that runs on rules, regulations and adversarial labor-management relations be nimble enough to thrive in a growing, unpredictable industry? After living hand-to-mouth for several years, can the Postal Service think in terms of investing, long-range planning, taking risks, and being willing to make mistakes? Can an agency that sees “penalties as a revenue stream” build the kind of business partnerships that may be necessary to carry out the Inspector General’s vision?
  6. Lobbying: If there’s profit to be made from providing real estate and logistics services to 3D printing, you can bet that private businesses will try to block “unfair” competition from the Postal Service.
  7. More lobbying: Perhaps USPS can make money from 3D printing in ways that private enterprise cannot – such as from deliveries to residential areas and acting as a trusted intermediary. But if 3D printing really starts disrupting major industries, you can bet that the likes of Walmart and ToysRUs will not sit by idly while a government agency aids and abets that disruption.
Other examples of regulators proposing new ventures for the U.S. Postal Service include:


@dryMAILman said...

Quick audit idea: How has downsizing my casing equipment while adding 230 delivery points prepared me for fast delivery of 3D items? Answer: 86% of new hires quit.

Anonymous said...

Forgive me but: ha, ha, ha, ha! Who will run and service the 3D equipment? Who will confer with customers in need of assistance in getting their files to print? If this is outsourced, it will not provide work for USPS employees, and cost will be higher than the competition. Not only do I see product ruined by heat, I see specialized packaging adding significantly to cost IF the USPS spends the money in order to eliminate costly redo because packages are crushed, damaged in transit. One of the uses of 3D print are for close-tolerance machine or biomechanical parts. I could not see a day when an agency whose rules change daily, which does not value its knowledgeable, smart employees and ends up paying low dollar replacement staff overtime because they are just learning routes, making such items. Would you buy a 3D knee replacement part or heart valve from the USPS? Not if your life depended on it working properly. The USPS needs to retool what they used to do well, mail delivery.