3D printing threatens to disrupt current supply chains through the digitalization of the product. Companies that manufacture and deliver small and simple products will find their customers printing their products instead of traveling to the stores or holding large amounts of inventory. McMaster-Carr, a beloved brand in engineering and maintenance, may be one of the first victims.
For an introduction to 3D printing, check this video.  Simply, a user builds or downloads an STL (stereolighography) file, makes minor adjustments if necessary, uploads the file to their personal 3D printer, and waits for the printer to print the object . 3D printers can work with multiple types of plastic, wood and metal filaments . This process can take 15 minutes for small parts, or 24 hours for large complicated objects. Currently, 3D printing is mostly confined to hobbyists and prototyping as the technology is not quite cheap and reliable enough to make production-grade materials. However, 3D printing is expected to be a $32.78 Billion industry within five years as the technology improves and companies begin adopting the tool for rapid prototyping, production and maintenance .
McMaster-Carr and the Current Supply Chain
McMaster-Carr is an MRO (Maintenance, Repair and Operations) company that specializes in selling fasteners (screws, nuts, bolts) . Their no-nonsense website design and fantastic service have made them the go-to order location for a company, factory or hobbyist needing parts from McMaster-Carr’s 550,000 SKUs. By focusing on key services like CAD models, custom-part creation and same day delivery, McMaster-Carr has been able to set themselves apart from the competition .
Factories and engineering firms will normally keep a safety stock of key fasteners. Even though each fastener takes up little space, there can be thousands of different fasteners that are needed in a company or project.  This means the safety stock held by the end customer can be quite large, taking up key space in the factory or office. In industries with major space constraints, this inventory space can prove to be costly .
How 3D Printing Effects McMaster-Carr
3D Printing has the potential to disrupt McMaster-Carr’s core business model by promising lower inventory cost and shorter lead times. When 3D printing becomes reliable enough, businesses will begin simply printing the fasteners they need rather than holding a safety stock or paying for shipping. By switching to a Just-In-Time model, companies will lower their inventory holding cost and effectively increase the workable area of the company. The digitalization of the product will eliminate the need for a manufacturer or a deliverer, as businesses can manufacture their own parts just-in-time. While there may be a need for more durable fasteners for high-end goods, the total revenue for McMaster-Carr will fall.
McMaster-Carr is already responding to this incoming threat to their business model . Currently, McMaster-Carr offers STL files for certain parts for free to be downloaded from their website. In addition, the CAD models McMaster-Carr provides with each order can be converted into an STL file. The idea is to allow the user to test out a part before ordering a durable and reliable version. McMaster-Carr is already training consumers that their website can be a location for high-quality STL files .
The Path Forward
As McMaster-Carr is a private company, their plans are not public. Based on their current actions and offerings , however, I believe their plan is to begin selling high-profile STL files directly from their website within the next 3 years. However, I would guess that within 10 years McMaster-Carr will double-down on the high-profile part business and let the lower-margin business fall to 3D printing .
McMaster-Carr’s brand equity does allow them to react in a more profitable manner. In the short term, they should keep offering the STL files online and eventually the more complicated ones for individual purchase. For longer term, McMaster-Carr should partner with a 3D printing company and set up the ability to remotely upload STL files. In addition, they should set up an STL file database with the infrastructure to become the “Netflix of Fasteners”. By offering a subscription model to their STL file database, a consumer can choose the product they want and have it start printing immediately. McMaster-Carr can then offer high-quality services such as file customization and 3D printing consulting. This plan leverages McMaster-Carr’s fantastic brand equity and allows them to pivot to the next generation.
My primary fear with this approach are open-source STL files. While McMaster-Carr may be able to have service and higher-quality files, the STL files online will be free. Hobbyists will probably switch over to open-source files, but will prototyping engineering firms? How does McMaster-Carr avoid losing too much market share to the open source world?
In addition, is there a way for McMaster-Carr to embrace 3D printing on their personal manufacturing side and lower costs there? Thus far I’ve focused on the end customer, but can McMaster-Carr leverage 3D printing to a better effect?
 3D Now, “The Ultimate Beginner’s Guide to 3D Printing,” YouTube, published March 10, 2017. [https://www.youtube.com/watch?v=3LBTkLsjHGQ], accessed November 2017
 David Bak, “Rapid prototyping or rapid production? 3D printing processes move industry towards the latter.” Assembly Automation Vol 23 Issue 4 (2003): 340-345
 marketsandmarkets.com, “3D Printing Market by Offering (Printer, Material, Software, Service), Process (Blinder Jetting, Direct Energy Deposition, Material Extrusion, Material Jetting, Powder Bed Fusion), Application, Vertical and Geography – Global Forecast to 2023,” Top Market Reports (July 2017), Market and Markets.com. http://www.marketsandmarkets.com/Market-Reports/3d-printing-market-1276.html, accessed November 2017
 Interview with Joseph McKenna, former McMaster-Carr operations employee, November 11, 2017.
 Hackaday, “A Noob’s Guide to McMaster-Carr,” https://hackaday.com/2017/09/13/noobs-guide-to-mcmaster-carr/, accessed November 2017
 Make:, “Pro Tip: You Can 3D Print Parts from McMaster-Carr,” https://makezine.com/2015/02/06/pro-tip-you-can-3d-print-parts-from-mcmaster-carr/, accessed November 2017