3D Printing and the Future Retail Supply Chain Christoph Armbruster, 2863 A Project carried out on the Master in Management Program, under the supervision of: Professor José Crespo de Carvalho 5

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A Work Project, presented as part of the requirements for the Award of a Master Degree in Management from the NOVA – School of Business and Economics

3D Printing and the Future Retail Supply Chain

Christoph Armbruster, 2863

A Project carried out on the Master in Management Program, under the supervision of:

Professor José Crespo de Carvalho

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Appendices

List of Appendices

1. Appendix A: Expert Interviews 2. Appendix B: Figures

3. Appendix C: Tables

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1. Appendix A: Expert Interviews

In the following a summary of the interview questions of each area of expertise is provided.

The interviews were carried out with professionals with/without technology expertise and Professors from Nova School of Business and Economics, and Instituto Superior Técnico Lisbon.

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Interview Subject 1: Economics

In the field of Economics three interviews were carried out. First, Pedro Brinca was interviewed. He is an Assistant Professor at the Nova School of Business and Economics.

Second Steffen Hoernig was interviewed. He is Associate Professor of Economics at the Nova School of Business and Economics. And Third, Carlos Daniel Santos was interviewed. He is Assistant Professor of Marketing. He received a Phd. in Economics from The London School of Economics.

Question 1: 3D printing might have a bigger impact than the internet since it is democratizing the manufacturing processes (print-at home). What is your opinion on this statement?

Question 2: Do you agree that retailers use the economies of scale model?

Question 3: What do you think might happen when 3D printing is pushing towards a economies of one model? Will it create new competition in the market due to the cost structure?

Question 4: Will De-Localization bring supply and demand in perfect alignment? Which allows a better allocation of goods and welfare?

Question 5: What will happen if the good movement (international trade) is significantly reduced? Will it destabilize economies that are depended on manufacturing?

Question 6: What steps/policies might governments consider to enhance technology like 3D printing?

Question 7: Socio-economic outlook on 3D printing: Will people adapt to technology? Will countries with aging society benefit?

Question 8: What might happen in China when it is not the powerhouse of manufacturing

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Interview Subject 2: Marketing

In the field of Marketing one interview were carried out with Carlos Daniel Santos. He is Assistant Professor of Marketing. He received a Phd. in Economics from The London School of Economics.

Question 1: Can you identify consumer trends in general? what are their expectations when shopping retail?

Question 2: How important is storytelling for you? Do u think 3D printing will improve it?

Question 3: Which sales channel will improve most in the future?

Question 4: In types of services, which services are more likely to be important in the future?

Question 5: Do you think forecasting efforts will still be necessary like today?

Question 6: What sales channels do you imagine to be established when retailers have 3D printers? What are the possible benefits of them?

Question 7: Will 3D printing influence the Marketing Mix?

Question 8: Are there pricing models in place that might be useful for 3D-files? Complexity pricing? Market pricing?

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Interview Subject 3: Accounting

In the field of Accounting one interview was carried out with Maria João Major. She is an Associate Professor of Management Accounting and Control at Nova School of Business and Economics, Universidade Nova de Lisboa. She holds a PhD from the University of Manchester and a Post-doc from the Manchester Business School.

Question 1: How is accounting carried out at the moment?

Question 2: What are current trends in accounting? New models, new systems?

Question 3: What do u think might change when 3D printing is implemented?

Question 4: How do you think global digital businesses might be taxed in the future when the value is transmitted digitally?

Question 5: Do you think that outsourcing in Accounting might happen more often when 3D printing is able to reduce accounting efforts?

Question 6: When considering working capital and 3D printing? Can you identify and linkage between them? How will 3D printing affect the working capital?

Question 7: What happens to the P&L when inventory is significantly reduced?

Question 8: Do you identify evolvements in IFRR? Is there a possibility to find standards to account digital 3D data?

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Interview Subject 4: IT Infrastructure

In the field of IT and the digital World three interviews were carried out. First, with Paulo Faroleira. He is an Assistant Professor (Adjunct) at Nova School of Business and Economics and holds an Bsc. in Matemática e Aplicações (Universidade Aberta) and a MSc. in Informática (Faculdade de Ciências - Universidade de Lisboa). Secound, with Leid Zejnilovic. He is an Assistant Professor at Nova School of Business and Economics. Third, with a Senior Manager at KPMG Deutschland in the field of Operations Strategy Business Intelligence.

Question 1: In general – how does the IT infrastructure of retailers looks like at the moment?

Question 2: How do you think the IT infrastructure in Companies will change? What are current trends?

Question 3: 3D printing is highly depended on IT and Design – Do you think 3D printers will make it to mostly every household? Infrastructure, knowledge? Easy to use software?

Question 4: Can you think of new IT-based business models that will enhance 3D printing?

Question 5: How do you think it is possible to secure patents and IP?

Question 6: How important is the Community of tinkerers in this sector?

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Interview Subject 5: Human Resource Management

In the field of Human Resource Management two interviews were carried out. First, with Filipa Castanheira. She is a Professor of Human Resource Management at Nova School of Business and Economics. She received her PhD in Social Psychology from Universidade de Lisboa. Second, with a HRM Director of Nemak Europe.

Question 1: In general – what impacts might additive manufacturing have on your area of expertise?

Question 2: What are the major trends in Human Resource Management?

Question 3: How to develop a talent pool of 3D printing experts?

Question 4: What must change that the blue-collar workers not all lose their jobs?

Question 5: How can you establish a common culture in a digital business? How do you integrate a culture in the supply chain?

Question 6: Is 3D printing also a new opportunity?

Question 7: To transfer knowledge certain ecosystems need to be established. How can you foster these ecosystems and cross-functional teams?

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Interview Subject 6: Corporate Finance

In the field of Corporate Finance one interview was carried out with Fernando Anjos woho is an Assistant Professor of Finance at NOVA School of Business and Economics. He received a B.A. in Economics in 1998 from the Catholic University in Lisbon, Portugal; a Masters in Finance in 2004 from ISCTE Business School (Lisbon, Portugal); and a Ph.D. in Financial Economics in 2008 from Carnegie Mellon University (Pittsburgh, Pennsylvania, USA).

Question 1: How does a capital structure of a retailer looks like nowadays?

Question 2: What are major trends of corporate finance?

Question 3: What will happen when 3D printing is implemented?

Question 4: What are the impacts of lowered inventories and working capital?

Question 5: How is the stock market/investors valuing companies? How important is collateral like land, equipment etc.?

Question 6: How are you able to reduce the perception of risk?

Question 7: Are there major M&A activities visible in the market at the moment?

Question 8: How high are debt ratios in general with which investors are comfortable?

Question 9: How do you think digital businesses can be taxed in the future?

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Interview Subject 7: Manufacturing

In the field of Manufacturing three interviews were carried out. First, with a Manager at KPMG Deutschland focusing on Lean Production. Second, with Jamie Bonnin Roca who is a Phd.

Student at Carnegie Mellon University (Pittsburgh, Pennsylvania, USA) and and Instituto Superior Técnico. Third, with a Plant Director of Nemak Europe responsible for two Manufacturing Plant.

Question 2: What are the major trends in manufacturing?

Question 3: In retail, where do you see the use of additive manufacturing?

Question 4: Do you think additive manufacturing is able to disrupt traditional manufacturing?

Question 5: Regarding labor, what impacts does additive manufacturing have on the labor structure?

Question 6: How can you increase learning of labor?

Question 7: Where would you apply additive manufacturing in retail?

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Interview Subject 8: Logistics

In the field of Logistics one interview was carried with a Senior Manager of KPMG Deutschland.

Question 2: Regarding inbound logistics – what are major trends?

Question 3: Regarding inbound logistics – what will additive manufacturing change when applied?

Question 4: Regarding outbound logistics – what are major trends?

Question 5: Regarding outbound logistics – what will additive manufacturing change when applied?

Question 6: Is additive manufacturing a threat to traditional transportation companies like Fedex etc.?

Question 7: Comparing the shipment of raw materials to finished goods? Are there significant differences?

Question 8: What happens to forecasting when additive manufacturing is able to produce at the point-of-use?

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Interview Subject 9: Laws & Regulations

In the of Laws & Regualations no Interview was carried out, but each expert was questioned about the uncertainty of Laws and Regulations.

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2. Appendix B: Figures

Figure 1: 3D printing: Light Processing

Source: http://3dprintingindustry.com/3d-printing-basics-free-beginners-guide/processes/

Figure 2: 3D printing: Laser Sintering

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Figure 3: 3D printing: Extrusion

Figure 4: 3D printing: Material Jetting

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Figure 5: Additive Manufacturing Market Development

Source: Wohlers, Terry T.; Caffrey, Tim; Campbell, R. I. (2016): Wohlers report 2016.

3D printing and additive manufacturing state of the Industry: annual worldwide progress report. Fort Collins, Colorado: Wohlers Associates.

Figure 6: Current Retail Supply Chain

Source: own Illustration

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Figure 7: Trend in Online Sales

Source: McKinsey IConsumer 2012.

http://www.mckinsey.com/industries/telecommunications/how-we-help-clients/iconsumer Figure 8: Globalization: Evolvement towards Personalization

Source: Koren, Yoram (2010): The global manufacturing revolution. Product-process- business integration and reconfigurable systems / Yoram Koren. Oxford: Wiley- Blackwell (Wiley series in systems engineering and management).

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Figure 9: Cost Structure of additive Manufacturing vs. traditional manufacturing

Source: own Illustration based on: https://dupress.deloitte.com/dup-us-en/deloitte- review/issue-14/dr14-3d-opportunity.html

Figure 10: Working Capital Comparison

Source: own generic calculation to illustrate potential benefit.

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Figure 11: Current IT Infrastructure of a Supply Chain

Source: own Illustration developed with Prof. Dr. Faroleira

Figure 12: Scenario Development of the Future Retail Supply Chain

Source: own Illustration based on: Koren, Yoram (2010): The global manufacturing revolution. Product-process-business integration and reconfigurable systems / Yoram Koren. Oxford: Wiley-Blackwell (Wiley series in systems engineering and management).

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Figure 13: Postponed Personalization

Source: own Illustration based on: Thangam, A.; Uthayakumar, R. (2008): Evaluation of supply chain structures using a delayed product differentiation process. In: Int J Adv Manuf Technol 39 (3-4), S. 401–408.

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3. Appendix C: Tables

Table 2: 3D printing: Possible Materials

Source: Wohlers, Terry T.; Caffrey, Tim; Campbell, R. I. (2016): Wohlers report 2016. 3D printing and additive manufacturing state of the Industry: annual worldwide progress report.

Fort Collins, Colorado: Wohlers Associates.

Table 3: Summary of Potential Pros and Cons of 3D printing

Source: own table based on: https://hbr.org/2015/06/the-limits-of-3d-printing &

http://www.economist.com/news/technology-quarterly/21584447-digital-manufacturing- there-lot-hype-around-3d-printing-it-fast & conducted interviews

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Table 4: 4 Types of Consumer Products

Source: own Table based on: https://marketing-insider.eu/4-types-of-consumer-products/

Table 5: Lean Manufacturing: Reduction of Waste (Muda)

Source: http://leanmanufacturingtools.org/77/the-seven-wastes-7-mudas/

Table 6: Qualitative Study: Analysis of Expert Interviews

Source: own Table based on expert Interviews