It may surprise people to learn that stereolithography dates to 1983, when the technique was first patented by Charles Hull, a California inventor. Most of us know the 30-year-old technology by its street name, “3D printing.” In the often gritty world of product manufacturing, much attention is focused on the ripple effects from this seemingly magical process. Some experts on 3D printing foresee inexpensive desktop units very soon making high-end products like sunglasses and fishing rods from a downloaded file. Experts on 3D printing include the futurist Christopher Barnatt, who writes about medical labs that are currently learning to “microprint” kidneys and other replacement human organs.
Thus, it is no surprise that updates and reports come briskly when Mike Halvey, Head of Middle Markets at Zurich in North America, assembles the underwriters and risk engineers in his manufacturing group. Risk management in the manufacturing sector has traditionally spotlighted worker safety, the supply chain, environmental accidents and intellectual property. Those variables continue to be assessed and studied as a means of managing risk efficiently. But there is a category-crossing theme Zurich now bears closely in mind—the basic proposition of, in Halvey’s words, “doing more with less.” That theme appears in online banking, alternative energy and many other venues—3D printing certainly being one of them.
“What grabs your attention about 3D printing is its dynamism,” says Halvey. “This is manufacturing’s big breakthrough in terms of rapid prototyping, time-to-market and overall maneuverability.” Smokestacks and machine tools seem ancient when you see beams of ultraviolet light striking the surface of a vat filled with liquid polymer, outlining a shape by creating molecular crosslinks that turn liquid into solid—then stacking those filmy solid layers into a valuable object. “You are talking about devices to create a complete array of manufactured products in many, many different locations to very exacting specifications,” Halvey says.
The supply chain factor—a major risk area for large-scale manufacturing, especially in the dawning superstorm era—is seemingly negated by Hull’s breakthrough process, subsequent refinements and widespread 3D printer availability. Meanwhile competitive risk is exacerbated, with barriers to market entry being dropped so low. “This manufacturing process is emerging and will create a whole new set of potential risks,” Halvey says. “Our job is to understand these trends as they emerge and make sure we’ve got an adequate way to respond.”
Beyond 3D printing, the capacity for U.S. manufacturers to do more with less may also arrive through lower energy costs. In building models that take into account the abundance and favorable pricing of shale gas, Zurich’s researchers create scenarios that cover just about any consequence of this market shift. Potential good news may be just that, but assumptions don’t make it so.
“What pleases me most,” says Halvey, “is to see that something we’ve created isn’t just a theoretical exercise. Instead, it comes into play for our insured clients and helps them protect from something negative they would have otherwise experienced.”
Within any Zurich unit, staff members will habitually search out interconnections between one form of risk and others, noting how the mitigating factors link up. A subtle example these interconnections involves “reshoring” and reputational risk. More and more, the public-relations value of employing U.S. workers to manufacture and ship a product is being added to the cost/benefit analysis that dictates factory location. Last year’s survey by a major consulting firm showed that over one-third of U.S. companies with $1 billion-plus annual sales said they were seriously considering reshoring at least some production, with public image an influential factor in these forecasts.
The imperative within Zurich’s Middle Markets team is to use tools and knowledge to make that not merely a good-news swap-out, but a strategic shift that might pay dividends throughout the enterprise, in ways not necessarily foreseen.