Digital Warehousing: The Future of Spare Part Supply Chain

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April 27, 2023

Digital warehousing is a revolutionary approach to supply chain management that is quickly gaining traction among manufacturers and retailers. Using digital inventory solutions, companies can respond to changing market conditions and customer demand with agility and flexibility by putting advanced software to use.

According to a 2022 industry report by MHI and Deloitte, 3 out of every 4 surveyed supply chain professionals expect digital supply chains to be the predominant model in the market in the next five years. And digital solutions are becoming increasingly vital to resolve or circumvent the sturdy bottlenecks in the supply chain today. In fact, the survey showed that supply chain bottlenecks are anticipated to persist until at least 2024.

Therefore, solutions like digital warehousing must address how to sort out the bottlenecks or bypass them altogether. In the spare parts market, a key factor driving the adoption of digital warehousing has been the growing use of additive manufacturing, which has helped revolutionize the supply chain.

Additive manufacturing allows companies to produce spare parts on demand rather than rely on traditional manufacturing methods that involve maintaining large inventory stockpiles. With traditional warehousing, companies must maintain large, physical warehouses to store their inventory, which can be expensive to operate and maintain. By contrast, digital warehousing allows companies to store their inventory virtually using advanced software systems and databases.

Not only does this reduce the need for physical storage space, but it also eliminates the risk of obsolescence and waste. It enables companies to minimize their physical footprint, reduce costs, and increase efficiency. In a way, it helps spare parts manufacturers and end users streamline their supply chain and shorten lead times significantly.

How digital warehousing is transforming the supply chain

With the advent of 3D printing, spare parts do not need to be stocked beforehand. As long as a digital twin of the part is available, a manufacturer – or even a user who owns a suitable 3D printer – can print the spare part locally and immediately. A digital warehouse is basically a manageable digital space for these digital twins to be available when needed at any place in the world.

In other words, the company’s spare part assets are transformed from physical stock – which, more often than not, goes obsolete – into digital assets that are customizable and secure. A PWC study on the future of spare parts predicted that companies would eventually be inclined to sell copyrights instead of physical products, highlighting the potential of merging digital warehousing and 3D printing. This can revolutionize how we manufacture, use, and own our products.

But how can we produce these digital twins?

A digital twin is simply a digital replica of the physical product. It can be produced in one of the following two ways:

The straightforward way would be to digitally design the part from scratch using computer-aided design (CAD) software. The resulting CAD file would become a ready-to-use digital asset to be 3D printed on demand. Yet, while this is relatively easy to implement for standard products, it can be tricky for parts that were produced previously using other manufacturing methods.

One great enabler of digital twins is reverse engineering and digitization. Simply, the physical part is scanned using 3D scanners, which collect millions of data points from the part’s surface using light and sensors. This data pool enables the manufacturer to regenerate the physical part digitally as a 3D model. Eventually, upon running mechanical simulations and testing, the 3D model is stored as a digital twin, ready to be printed when needed.

Therefore, combining digital warehousing and additive manufacturing can transform the supply of spare parts altogether. In fact, it enables localized manufacturing, which can prove vital for regions like the Middle East and Africa. Localized manufacturing decentralizes the supply chain and helps companies circumvent constraints and disruptions to ensure a timely and secure supply of spare parts. This redefines the supply chain, making it more manageable and adaptable in times of uncertainty and potential market disruptions.

4 Benefits of digital warehousing of spare parts

Accessibility to spare parts has been a lingering challenge for on-demand manufacturing, adding to the pressure warehouses are under as they struggle to deliver consistent and error-free stock-keeping units (SKUs).

That’s where digital warehousing can play a significant role. Here are 4 benefits that digital warehousing systems can provide to manufacturers and end users:

  1. Global accessibility to spare parts
    Companies can benefit from on-demand access to digitally stored spare parts from any place in the world. This accessibility enables them to manufacture their desired parts locally, ensuring no impediments to the supply of the spare parts.
  2. Minimized warehouse operational costs
    By storing the spare part digitally as a digital twin, companies can significantly reduce their operational costs (including staff- and error-related costs) as hardly any warehouse space would be needed. Physical storage is transformed into cloud storage, as digital spare parts would be available to be replicated on demand through 3D printing.
  3. Enhanced efficiency and reduced lead times
    Using digital warehousing can reduce the time it takes to acquire necessary spare parts, saving time and money that would have been spent on sourcing obsolete or unavailable parts. It helps prevent the accumulation of unsold inventory and allows for producing parts only as needed. This reduces waste and improves the overall efficiency of supply chains.
  4. Improved supply chain agility
    Traditional manufacturing processes can make it difficult for companies to respond quickly to changing customer demand or market conditions. Using digital warehousing and additive manufacturing can help companies improve their supply chain agility by allowing for the rapid production of customized products, enabling companies to meet changing demand in real-time. This can help improve their responsiveness and increase customer satisfaction.

Final thoughts

Overall, digital warehousing is transforming how companies manage their spare parts inventory and supply chains. By leveraging the power of additive manufacturing and digital systems, companies can reduce their environmental impact by bypassing physical inventories, centralized manufacturing, and complicated logistics. They can improve efficiency, reduce costs, and better meet the needs of their customers. As the world continues to progress and become more connected, digital warehousing and digital inventories will likely continue to grow in popularity in the near future.