In the 14th century, if you needed to buy a suit of armor, you went to an armorer, a craftsman who would fashion a breastplate and helmet fitted to your precise measurements. It was an expensive way to make a product, and when the industrial revolution got under way three centuries later, the manufacture of interchangeable parts led to mass-produced, economically priced goods that, by and large, did away with craftsmanship.

But a new approach to production—known variously as direct digital, additive, and rapid manufacturing—promises to make it feasible for manufacturers to economically produce custom-designed goods in low-volume quantities. The switch to this type of manufacturing has the potential to change the way companies handle their warehousing and transportation—in fact, it could usher in a supply chain transformation.

To understand how disruptive this would be for the supply chain world, it's important to review how rapid manufacturing differs from the "tool and die" technique currently used for mass production. At present, using engineering drawings, workers mark out the design on raw material such as metal. They then cut the material to size and shape using machine tools such as lathes, molds, grinding and milling machines, and jigs. Products are then assembled from those interchangeable parts and components.

Direct digital manufacturing takes a whole different approach to making goods. For starters, it uses a layer manufacturing machine. Using a three-dimensional computer image as its guide, the machine adds layer upon layer of a substance like plastic or metal to construct a part, a component, or even a product itself. This manufacturing approach lends itself to building unique, oneof- a-kind products, since it requires little time and setup to make changes. If a manufacturer wants to build a different product, it only requires a different 3D image as a pattern for the layer manufacturing machine.

At present, direct digital manufacturing is being used to make such specialty products as personalized hearing aids. A technician takes a 3D picture of the user's ear, and the machine uses that picture to construct a hearing aid that exactly fits the ear's contours. Under this model, a person seeking a hearing aid simply goes to a shop where the device is built—just as someone would have gone to an armorer centuries ago.

As the cost for layer manufacturing machines drops, it becomes more likely that companies will set up shops where they'll handle manufacturing right on the premises. This change, dubbed "distributed manufacturing," would mean that a company would no longer have to make a large quantity of goods on a production line, store those products in a warehouse, and then ship the products to the retailer or end user. There's no outbound supply chain in this manufacturing model.

Digital manufacturing will not just be used to make small consumer goods. It will be used to fabricate parts and components for automobiles and airplanes. Although automobile manufacturers will likely have to warehouse some parts, they won't need the sprawling storage facilities they operate today. That's because with the quick setups enabled by additive manufacturing, there's no need to engage in long production runs for manufacturing efficiency. Manufacturers will embrace what I call "extreme lean production."

In fact, this technology would make it possible for makers of large durable goods to set up plants in national and regional markets to provide products. Parts suppliers would follow the kanban model and set up their facilities close to the assembly plant, which might serve a particular region of the country—say, the Northeast.

With the advent of regional production sites, there will be less demand for long-haul transport of large products and little need to store huge quantities in a building for extended periods of time. Cars would come off the assembly line for delivery to individual customers. Sound far-fetched? Experts believe that the era of digital manufacturing will arrive a decade or two from now. When it does, the effects will reverberate throughout the supply chain world as well.