The connection paradox
There is a strange paradox between the simplicity to connect two individuals using today’s evolving technology and the complexity to connect two countries in today’s world. Technology has been widely used in the supply chain to support logistics planning and scheduling . Meanwhile, the world is currently undergoing a period of cascading protectionism , caused by an uprising wave of nationalism in several countries . This disconnect between the openness brought by innovation and the confinement instituted by protectionist governments prevents us to harvest the benefits of international trade, such as increased value-added and employment .
The $300 Billion “connection problem” of Aerospace
To exemplify how protectionism can affect an entire industry, let’s look into Aerospace. An airplane is assembled by combining over 300,000 parts, which come from hundreds of different suppliers spread out through several countries . With the institution of protectionist measures by several countries, such as local content policies , the whole aerospace supply chain, and the value it creates, would be at risk.
Exhibit 1: Value of aerospace products exports per country
Source: Worlds Exports 
In 2016, the Aerospace industry accounted for $328.7 Billion in exports among over 200 countries . Exhibit 1 illustrates how much value each country produces directly from aerospace products exports.
John Flannery, recent elected CEO of GE, and David Joyce, CEO of GE Aviation, have a great challenge ahead of them. According to GE’s 2016 annual report, 85% of their revenue for aircraft engines and gas turbines have been sold abroad .
The global expansion playbook
To win in every country. It sounds too simplistic for a company with revenues of $120 Billion, but indeed that’s GE strategy: simplify . In 2015 GE Aviation started its global expansion by creating roots in Europe, Canada, Brazil, and China, where they invested over half a billion dollars to create new facilities to produce turbines .
GE’s leadership believes that having a local footprint will help them navigate turbulent trade relations between countries and will help them establish partnerships with local governments . Having a local facility is a well-known strategy to overcome regulatory demands in highly regulated industries such Banking  and Energy .
Breaking the wall – 3D printing
In 2012 GE Aviation made two notable acquisitions: Morris Technologies and Rapid Quality manufacturing . Both companies specialize in producing additive manufactured (3D-Printed) parts for the aerospace industry. These acquisitions represented not only GE’s strategy to invest in emerging manufacturing technologies but also a strategy to overcome trade barriers.
Figure 1: 3D-Printer printing a jet engine part
Source: GE reports 
Additive manufacturing, or 3D-printing, is a technology capable of producing parts by deposing layers of material, one layer on top of the other . This technology has the potential to produce lighter parts, with more audacious designs and using less material than conventional technologies . Besides that, 3D-printing allows a distributed production process, meaning that GE Aviation can design the part in its headquarters in Ohio, send the file electronically to its factory in Brazil, print the part in Brazil and deliver it in the same day as a locally produced part.
The way forward
In the beginning of 2017, GE announced two main strategies to growth: Additive Manufacturing and Industrial Digitalization . In the same year, GE Aviation acquires two major producers of industrial parts using additive manufacturing: Concept Laser Gmbh and Arcam AB .
With the acquisitions and investments in new facilities, GE Aviation is creating a network of factories capable of producing 3D-printed parts all over the world. This network will allow them to overcome trade barriers by just sending the CAD (Computer Aided Design) file of the part they need to produce to the country in which production needs to occur, and print the part without the need for specialized labor to be present in the facilities.
What else could be done?
To ensure that the global production strategy thrives, GE Aviation should pay attention to two major characteristics of the 3D-printing market:
- Build 3D-printing expertise – GE Aviation currently focuses its 3D-printing efforts on building turbine engine replacement parts. There are several other applications less critical to the functioning of airplanes and spacecraft, such as plastic parts, that could be produced via 3D-printing as well.
- Power of network – To produce 3D-printed parts and deliver it quickly it is necessary to have a production unit close to the customer. 3D-printing machines are usually inexpensive, compared to traditional machines, require low supervision and can produce multiple parts on just one machine. Thus, one way to be very close to your customer is to have a machine installed at your customer.
3D-printing has evolved and can now help GE Aviation overcome trade barriers. However, will the governments ever start regulating internet traffic to the point that designs made in the U.S. could not be produced somewhere else? Also, will local governments support the expansion of this technology that creates fewer jobs?
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