3D Printing & the coming international channel management tsunami

Ed Marsh | Dec 6, 2012

The consequential impacts of technology

This is not a technology blog...but technology has a tendency to disrupt in unexpected ways. And lately I've been wondering about how 3D printing / additive manufacturing might disrupt global sales. I anticipate it will revolutionize international channel management and MANY other aspects of your manufacturing business strategy.

To follow the conversation you need to understand the premise of additive manufacturing. My discussion of why it's important follows below. There's loads of info available - I've assembled a representative selection here. You decide how much background you have time / interest in digging into. In addition to the videos below you might be interested in these links:
A 5 minute overview of the process

A longer discussion of the investment and business implications

And your point is?

I hear you. Occasionally I see some technology that is really cool. I'm not sure how it fits, but it's fun to explore. I enjoy learning about it, but I'm not in the tech business. So my interest really peaks when a technology matures to the point that it helps me make money or try to become more efficient. Technology just for the sake of technology doesn't "blow my hair back."

But stay with me for a minute...let's see where this goes.

For simplicity let's stipulate that we'll initially focus on companies that sell physical products - for instance engineered components machined from some sort of metal, ceramic plastic or other material that is currently, or will be soon, compatible with additive manufacturing.

As a baseline let's define the typical responsibilities of sales channel selling these sorts of products:

  • find customers and market locally
  • participate in the specification and approval process
  • perhaps facilitate engineering to specific requirements
  • assume responsibility for payment & delivery
  • provide ongoing customer support.
Successful international channel management begins by building a channel partner profile that identifies the skills and capabilities necessary for success within company/product/vertical/country markets. This profile can be pretty well defined based on today's circumstances.

And the export process itself includes a number of logistics steps involved in moving physical products from one location to another - and obviously large costs and lead-times as well.

When delivery is virtual

What happens to the current model of international channel management when delivery of physical products is entirely virtual until the "final mile?" If products aren't shipped? If IP theft no longer requires reverse engineering but only access to files that by definition can't be kept behind secure corporate firewalls? How are customs issues of tariffs & duties addressed?

There is a long list of "what-ifs." If I was a freight forwarder I'd be particularly concerned, and I'm sure that companies like UPS must be investing in concept development for secure control of local 3D printing assets to address IP, licensing, customs and other considerations.

But without veering too far afield into a thought exercise, what are the likely implications for your international channel management procedures?

Predicting precisely is a fool's game. But you can generally anticipate likely issues and it's not too early to start to discuss strategies with your professional advisors (particularly legal), and perhaps to start to incorporate certain concepts into your target profile and channel contracts. Certain technical and facility requirements will likely emerge, and IP, trademark and other legal protections will become more problematic.

And the ideal model may well morph from a distribution or agent default to one of JV or licensee. It will be an exciting adventure!

Plan defensively...seek opportunity offensively

There are risks and exposures to anticipate - but there are also short term opportunities. Consider attractive (large, vibrant) markets with high tariffs which are a barrier to entry. In most cases economic development policies favor local manufacturing - perhaps your business can quickly seize opportunities through early adoption. As Brazil grows its auto industry, for example, this could be an easy way to circumvent 40-70% tariffs by manufacturing additively (through a JV) in country.

The bottom line is that the story is yet to be written. But it is clear that it will be. And a business world that is already very global will become even more so. If you wait until the outcome is clear you will likely be frozen out. Don't overcommit early, but jump in. Innovate new ways to build your business by leveraging this technology.

And if you hadn't begun to think about this topic; if your in-house strategy folks never raised the topic, or your current "export consultant" takes a myopic approach, maybe we should chat. Contact Consilium today to discuss how substantive global business development expertise can impact your business.

For instance, have you ever thought about the potential impact on your business valuation?

Global Sales Business Valuation