Boston Consulting Group
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Origins of the Bionic Supply Chain
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A short history of the term ‘bionic supply chain’ in industry. Sustainability technology finds new ways to adopt into operations. Handcrafted lightsabers in time for Halloween.
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3D Printing Helps Realize the Promise of Distributed Manufacturing
Additive manufacturing offers a solution to the challenges of distributed manufacturing by enabling local and highly flexible production of small quantities. For many use cases, additive manufacturing systems and processes are now technologically ready for small-series production. Applying 3D printing in distributed manufacturing will be most beneficial for producing high-value parts, such as those used in the aerospace and medical-technology industries, or low-volume replacement parts. These are among the transformative technology applications that constitute Industry 4.0.
In 2022, BCG undertook a study, in collaboration with RWTH Aachen University and the ACAM Aachen Center for Additive Manufacturing, to capture insights into how the application of 3D printing in distributed manufacturing adds value and what the prerequisites are for successful use cases. The study included interviews with a panel of approximately 15 leading experts in business and academia, from a variety of countries.
Building the Bionic Supply Chain
To capture the greatest value from their end-to-end (E2E) supply chains, companies need to adopt a bionic operating model. With the help of adaptable key performance indicators (KPIs) that focus on optimizing overall performance in any situation, a platform organization that works cross-functionally, and a data and digital platform (DDP) that enables collaboration, a bionic supply chain leverages the best of what both machines and humans have to offer.
Building a bionic supply chain requires a comprehensive digital transformation where employees as well as leaders play crucial roles. Although the size of the effort is enormous, a bionic supply chain can lead to substantial improvements in performance. It can boost revenue by 4% to 6%, customer service levels by 5 to 30 percentage points (pp), and EBITDA by 2 to 4 pp. Moreover, a bionic supply chain has the potential to reduce manufacturing, warehousing, and distribution costs by 10% to 20% and working capital by 15% to 30%. It’s also more able to react swiftly to sudden changes in demand, supply prices, trade policies, and so on—perhaps the most important consideration of all in the current business environment.