While additive manufacturing (or 3D printing) has the potential to greatly reduce shipping costs and make operations more efficient, it can also make the supply chain more vulnerable to cyberattacks and counterfeiting. Blockchain technology may hold the answer for increasing security.
Dana Ellis is the senior program manager at the National Center for Manufacturing Sciences (NCMS). NCMS is a member-based organization that leverages its network of industry, government, and academia to develop, demonstrate, and transition innovative technologies efficiently, with less risk and lower cost.
Frank Schuster is director, program operations, at the National Center for Manufacturing Sciences (NCMS). NCMS is a member-based organization that leverages its network of industry, government, and academia to develop, demonstrate, and transition innovative technologies efficiently, with less risk and lower cost.
Imagine a worker being able to print specialized parts while on a construction site, or a mechanic being able to manufacture a replacement for a faulty engine part with the click of a few buttons. Sound like science fiction? Maybe, but these scenarios are rapidly becoming the new reality thanks to additive manufacturing (AM).
AM—a technology that builds 3D objects by adding layer upon layer of material regardless of whether that material is plastic, metal, concrete, or even human tissue—is fundamentally changing how companies manufacture, distribute, and maintain products. Because AM allows parts to be manufactured at the place and time of need, more and more companies are moving toward a decentralized manufacturing model freed from its traditional geographical restraints.
This shift dramatically alters the nature of supply chains, by replacing traditional networks consisting of a few original equipment manufacturers (OEMs) and suppliers with vast ecosystems of potential manufacturers and subcontractors. It also makes supply chains increasingly dynamic and offers requestors/customers a convenient source of supply. Product lifecycles are significantly shorter, while ramp-up and ramp-down periods are more intense.
Yet while additive manufacturing offers all of these benefits, it does not come without added risk. The digital nature of the AM supply chain can also make it more vulnerable to cyberattacks, counterfeiting, and tampering. The answer to these concerns may lie in another new innovative technology: blockchain.
A growing risk
Even in its more traditional format, manufacturing is one of the most targeted sectors for cyberattacks. A recent study by LNS Research indicates that more than half of the manufacturers participating in the survey experienced cyber-security breaches over the past year.1 These attacks are usually focused on industrial control systems at manufacturing sites and machines.
AM provides cyber criminals with a new potential target: the parts themselves—or more specifically, their "digital twin," a digital file that contains the parts' specs and manufacturing instructions. That's because the effectiveness of AM depends almost entirely on the integrity of digital files to tell the 3D printing mechanism what to do. Quite simply, the finished state of the printed item can only be as good as the digital instructions the printer receives to manufacture it. As a result, the delivery and security of those digital files is paramount.
Additive manufacturing increases not only the importance of digital files but also the number of organizations receiving highly sensitive product data. In the traditional manufacturing model, the company that creates the design files would also handle manufacturing and then shipping of the final product. In the AM supply chain, however, this is no longer the case. In an AM ecosystem, numerous product variations move through multiple parties, all of which are attempting to coordinate work together. All of these transmissions could be compromised or hacked, and the design files could fall into unauthorized hands and/or be used to create counterfeit, maliciously modified, or uncertified parts.
The power and potential of blockchain
To ensure the integrity and traceability of digital files and assure their secure delivery at each stage in the supply chain—from the file developer all the way to the end user—more companies are turning to blockchain. Blockchain functions like a distributed database that maintains a continuously growing list of ordered records ("blocks"). Because blockchains time stamp each record and link it to a previous block, they are inherently resistant to modifications of data.        Â
Blockchain works by storing information (such as design files) across each phase of the digital supply chain—design, distribution, manufacturing, and in-field—on participating nodes. A node is any electronic device connected to the blockchain network that automatically downloads and stores a copy of the blockchain. All transactions (such as the transfer of a file from one entity to another or a modification to a design file) within a block of data are cryptographically hashed (or given a unique digital fingerprint) along with the previous block to form the current block. As a result, any data modifications would result in a new digital fingerprint and—since the blockchain network is governed by consensus—the authenticity of any transaction can be rejected as fraudulent.
Bottom line? While blockchain technology has taken on many different forms and has had many distinct applications, the underlying concept of all blockchain-based systems is similar. While blockchain does not directly keep the data it transmits secure, it does have the ability to indicate when files have been tampered with and to expose when a file has been corrupted.
So, if an additive manufacturing supply chain implemented blockchain at the transactional node level, it would assure that all assets were traceable and their provenance known and that users could see the full lifecycle of the part.Without blockchain, security relies on encryption alone, and there is no way to really determine if a digital file has been corrupted. Blockchain grants authenticity by exposing if a file has been corrupted or changed.
To be effective, though, it is essential to secure supply chain data at each phase of the AM digital supply chain. This begins with the design phase, where both the final design of the part and all of its associated engineering data need to be considered highly valued assets that require protection. Securing supply chain data could require file encryption, digital licenses and smart contracts, and digital references as well as the use of blockchain.
By encrypting the design files, part designers ensure that only authorized users will have access to the information enclosed. Doing so blocks access to the design files until they are decrypted by a designated AM machine. A smart contract then acts as a licensing mechanism, that will allow the owner of the intellectual property to define who can have access to that data, for what length of time, and how and where that data is to be used in manufacturing the part.
In the traditional manufacturing model, the company that creates the design files would also handle manufacturing and then shipping. In the AM supply chain, however, this is no longer the case. Instead the parts designer transmits the encrypted design files—along with an accompanying digital license—to downstream companies that are part of the supply chain via email, an offline system, or direct access to the company's server from one system to another, depending on the level of security measures required.
Given the potential for such measures to be compromised, using a smart contract-enabled blockchain here is essential. Doing so allows the digital distribution license to be authenticated, transported, and recorded by blockchain transactions. It also enables all members of the blockchain to participate in and substantiate design data provenance, while simultaneously enforcing the distribution and asset management rules set by the smart contract.
Engineers can also use blockchain to apply business and production rules to the encrypted design files that will specify the make and model of the machine allowed to execute the design, the types of build materials permitted, and various other build parameters. Manufacturers will only be able to decrypt the design files once these specifications are met. Moreover, production rules will control the number of parts each manufacturer is licensed to print. This ensures quality standards are met and prevents counterfeits from being made on authorized equipment. Additionally, the blockchain ledger will track and store all events associated with the lifecycle of the part design so the provenance of each part can be verified and any errors detected in end products can be traced to their source.
Finally, when a physical part is manufactured, it should be tagged with a digital reference and recorded in the blockchain ledger. For example, parts could be coded with a chemical tracker, radio frequency identification tag, or serialization number that can then be matched to information stored in the digital ledger. Doing so provides a link between the digital and physical thread that can be used to trace any part back to its manufacturer, the machine that created it, the conditions under which it was created, and the original design creator. The blockchain ledger can also be used for performance modeling, failure simulation, and overall performance improvement of a specific part.
"An elegant solution"
As more industries realize the benefits of AM, it will become important for companies to recognize that the products of AM are only as viable as the integrity of the digital files and the printers that create them. Clearly, securing the digital supply chain with blockchain technology is critical. Blockchain serves as a hedge against lost revenue caused by intellectual property (IP) theft.
For manufacturers in the government and military space, the benefits go even beyond protecting against IP theft, as counterfeit parts could threaten safety and national security. The Department of Defense (DoD) named supply chain integrity and counterfeit parts as two of its top concerns for the electronics sector in its Fiscal Year 2017 Annual Defense Industrial Capabilities Report.
According to the DoD report, one of the key reasons that counterfeit parts enter the supply chain is technological obsolescence, where the equipment is no longer manufactured by the OEM and must then be purchased from third party. According to the DoD report, between 50 percent and 80 percent of suspected counterfeit parts were for obsolete equipment at the time of discovery.
One of the benefits of AM in the defense space is that it allows suppliers to store designs for replacement parts that OEMs have stopped manufacturing and produce them on the spot. Blockchain can validate that suppliers are using the correct design file.
For these reasons, the Department of Defense is very interested in the potential of blockchain to be used in AM supply chains. "Blockchain is an elegant solution," said Steven Dobesh, Commander, U.S. Navy, Technology & Innovation Branch Chief, Joint Chiefs of Staff-J4. "It will address the concerns of securing the digital thread of AM. I think it is the best answer to the important issue of traceability and provenance. We must have the same level of confidence when we pull a part off the printer that we currently have when we pull a physical part off the shelf. Blockchain will help us to achieve this through an append-only immutable ledger of transactions."
With any new technology comes disruptions to culture, thinking, and the supply chain. Additive manufacturing paired with blockchain technology is just this kind of disruption. While best practices for securing and authenticating data and ultimately improving the digital supply chain through blockchain-enabled security solutions still need to be determined, blockchain technology undoubtedly holds the key to counterfeit mitigation, data integrity, compliance rights, and feedback monitoring.
In the end, incorporating blockchain into the manufacturing cycle will lead to faster production by accelerating time to market and reducing physical storage requirements. This will enable additive manufacturing to live up to its full potential.
p>Notes:
1. Matthew Littlefield, Putting Industrial Cyber Security at the Top of the CEO Agenda, LNS Research and Honeywell, 2017.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
Jason Kra kicked off his presentation at the Council of Supply Chain Management Professionals (CSCMP) EDGE Conference on Tuesday morning with a question: “How do we use data in assessing what countries we should be investing in for future supply chain decisions?” As president of Li & Fung where he oversees the supply chain solutions company’s wholesale and distribution business in the U.S., Kra understands that many companies are looking for ways to assess risk in their supply chains and diversify their operations beyond China. To properly assess risk, however, you need quality data and a decision model, he said.
In January 2024, in addition to his full-time job, Kra joined American University’s Kogod School of Business as an adjunct professor of the school’s master’s program where he decided to find some answers to his above question about data.
For his research, he created the following situation: “How can data be used to assess the attractiveness of scalable apparel-producing countries for planning based on stability and predictability, and what factors should be considered in the decision-making process to de-risk country diversification decisions?”
Since diversification and resilience have been hot topics in the supply chain space since the U.S.’s 2017 trade war with China, Kra sought to find a way to apply a scientific method to assess supply chain risk. He specifically wanted to answer the following questions:
1.Which methodology is most appropriate to investigate when selecting a country to produce apparel in based on weighted criteria?
2.What criteria should be used to evaluate a production country’s suitability for scalable manufacturing as a future investment?
3.What are the weights (relative importance) of each criterion?
4.How can this methodology be utilized to assess the suitability of production countries for scalable apparel manufacturing and to create a country ranking?
5.Will the criteria and methodology apply to other industries?
After creating a list of criteria and weight rankings based on importance, Kra reached out to 70 senior managers with 20+ years of experience and C-suite executives to get their feedback. What he found was a big difference in criteria/weight rankings between the C-suite and senior managers.
“That huge gap is a good area for future research,” said Kra. “If you don’t have alignment between your C-suite and your senior managers who are doing a lot of the execution, you’re never going to achieve the goals you set as a company.”
With the research results, Kra created a decision model for country selection that can be applied to any industry and customized based on a company’s unique needs. That model includes discussing the data findings, creating a list of diversification countries, and finally, looking at future trends to factor in (like exponential technology, speed, types of supply chains and geopolitics, and sustainability).
After showcasing his research data to the EDGE audience, Kra ended his presentation by sharing some key takeaways from his research:
China diversification strategies alone are not enough. The world will continue to be volatile and disruptive. Country and region diversification is the only protection.
Managers need to balance trade-offs between what is optimal and what is acceptable regarding supply chain decisions. Decision-makers need to find the best country at the lowest price, with the most dependability.
There is a disconnect or misalignment between C-suite executives and senior managers who execute the strategy. So further education and alignment is critical.
Data-driven decision-making for your company/industry: This can be done for any industry—the data is customizable, and there are many “free” sources you can access to put together regional and country data. Utilizing data helps eliminate path dependency (for example, relying on a lean or just-in-time inventory) and keeps executives and managers aligned.
“Look at the business you envision in the future,” said Kra, “and make that your model for today.”
Turning around a failing warehouse operation demands a similar methodology to how emergency room doctors triage troubled patients at the hospital, a speaker said today in a session at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
There are many reasons that a warehouse might start to miss its targets, such as a sudden volume increase or a new IT system implementation gone wrong, said Adri McCaskill, general manager for iPlan’s Warehouse Management business unit. But whatever the cause, the basic rescue strategy is the same: “Just like medicine, you do triage,” she said. “The most life-threatening problem we try to solve first. And only then, once we’ve stopped the bleeding, we can move on.”
In McCaskill’s comparison, just as a doctor might have to break some ribs through energetic CPR to get a patient’s heart beating again, a failing warehouse might need to recover by “breaking some ribs” in a business sense, such as making management changes or stock write-downs.
Once the business has made some stopgap solutions to “stop the bleeding,” it can proceed to a disciplined recovery, she said. And to reach their final goal, managers can use the classic tools of people, process, and technology to improve what she called the three most important key performance indicators (KPIs): on time in full (OTIF), inventory accuracy, and staff turnover.