Over the last 5 years, 3-D printing, also known as additive manufacturing, has had a tremendous influence in our industry. It is considered the current and future of almost any conceivable form of fabrication. Though this technology has been embraced by enthusiasts from small-time makers to international aerospace ventures, questions about its cost effectiveness are paramount to widespread adoption. Here’s why.
Costs of production for additive manufacturing fall into two categories: “well-structured” costs, such as labor, material, and machine costs, and “ill-structured” costs, which can include machine setup, inventory, and build failure. Right now, most cost studies focus on well-structured costs, which comprise a significant portion of 3-D printing production and are cited by detractors as evidence of cost ineffectiveness. Unfortunately, these studies focus on the production of single parts and tend to overlook supply chain effects, thus failing to account for the significant cost benefits which are often concealed within inventory and supply chain considerations.
Good opinion piece from Rob Enderle
Last week, I was in Spain with HP and much of the conversation was on how 3D printers were going to disrupt and revolutionize manufacturing. However, underneath all of the discussions was a growing concept that the factory itself, as these 3D printers advance and become more capable, would evolve into a huge and vastly more capable 3D printer. Except, rather than printing parts, these huge printers would print things like fully capable automobiles. Granted, we are likely a couple of decades out but talk about disruptive technology revolutions this could be a massive game changer because it anticipates a time when, rather than regional warehouses, Amazon might have regional mega printers.
Let’s talk about that this week.
Evolution of 3D Printers
Until recently, 3D printers were more of a science experiment than an actual tool. The parts, while physically representative, weren’t very robust or, if they were robust, they cost more than most other manufacturing methods. HP’s Jet Fusion printers changed that by producing parts that were about 1/10th the cost of aluminum, had similar strength, but came in around 1/10th the weight as well. Suddenly, we had 3D printers that could produce parts that were arguably better than traditionally produced parts and, rather than being more expensive, they were significantly less expensive.
Oracle’s Supply Chain expert, Dominic Regan, discusses the impact 3D printing is having on the supply chain and how the multinational database giant is supporting the dynamic additive manufacturing market by helping to increase business agility, lower costs, and reduce IT complexity
Oracle is best known for its database services, offered to business since the company started over 40 years ago. This technology background was the platform to expand into applications in the ERP space and several other disciplines including supply chain.
Oracle supports the classic approach to designing products, planning and forecasting supply and demand, focusing on procurement and the sourcing of products in the manufacturing space then providing the logistics of fulfilment via transport and global trade warehouse management before closing that cycle with service, so once a product has been delivered it can manage the repair and maintenance process.
3D printing, aka Additive Manufacturing, is changing the way things are made; and not just on a small scale or prototyping sense, but changing the way global scale production gets done.
Gartner believes that in 2018, 3D printing will accelerate new business model innovation. Here are some of the 3D printing predictions by Gartner:
- By 2021, 75 percent of new commercial and military aircraft will fly with 3D-printed engine, airframe and other components.
- By 2021, 25 percent of surgeons will practice on 3D-printed models of the patient prior to surgery.
- By 2021, 20 percent of the world’s top 100 consumer goods companies will use 3D printing to create custom products.
- By 2021, 20 percent of enterprises will establish internal startups to develop new 3D print-based products and services.
- By 2021, 40 percent of manufacturing enterprises will establish 3D printing centers of excellence (COE). “The long-term goal of a 3DP COE is to become a seamless part of the design and manufacturing process. When successful, the COE has broad implications on use of 3DP in the design, manufacturing and maintenance of products,” – Gartner
Customers worldwide ramping up 3D printing installations;
More than 3 million Multi Jet Fusion parts produced in last year alone;
Breakthrough program to digitally reinvent HP product lifecycle
- Industry-wide acceleration of 3D printing for production of end-use parts and large-scale prototyping
- Forecast 3D, GoProto, Stern, and more increasing Multi Jet Fusion capacity to meet rising demand
- Reinventing HP With Multi Jet Fusion program leverages 3D across HP’s product lifecycle
ST. LOUIS, April 09, 2018 (GLOBE NEWSWIRE) — Today at the world’s largest 3D printing user event, the Additive Manufacturing Users Group (AMUG) conference, HP Inc. showcased new large-scale customer deployments and its own Reinventing HP With Multi Jet Fusion program as the industry accelerates its journey to full-scale 3D production. According to Wohlers Report 2018, the production of functional parts, including functional prototyping, is now the industry’s leading additive manufacturing use-case and the demand for production-grade parts is expected to continue to grow exponentially. As the market leader, shipping more plastic production 3D printers than any other company in the world, HP is delivering both unprecedented capabilities and economic advantages to its manufacturing customers, and also embracing its own technology to transform the design, production, and distribution of HP products worldwide.
The promise of 3D printing has been in the background of manufacturing conversations for years. This technology’s potential to let companies create items on demand, with minimal factory equipment and an extreme degree of customization, has kept it relevant as the necessary hardware and software have improved. The fact that there hasn’t yet been a massive supply chain disruption due to 3D printing may be leading some companies to write it off. Leaders should keep their eyes open, however – further development could change the geography of manufacturing.
The use of 3D printing as a prototyping system, a behind-the-scenes option for product development, has kept it in the manufacturing ecosystem. Learning to produce finished goods with the same speed and ease currently used for in-development items could be the turning point for 3D printing’s impact and ubiquity.
Examining the marketplace
Current supply chain practices such as producing a high volume of goods in financially efficient factories and shipping them en masse may become less useful in the era of widespread 3D printing. The Chartered Institute of Procurement & Supply recently examined both the transformative potential of 3D printing and the reasons why the technology hasn’t yet had such an impact, despite being known and available for years.
Most everything that supply chain leaders and chief risk officers know about supply chain risk management today could soon become obsolete, thanks to rapid advances in 3D printing.
We’re already seeing signs of this in the construction industry: In March 2018, 3D printing construction company ICON, in partnership with non-profit group New Story, unveiled the first permitted, 3D-printed home in the United States in Texas with the commendable aim of creating affordable housing for all. Other 3D printing construction companies—like Apis Cor, Contour Crafting, and CyBe Construction—have developed similar technologies. And last year, Dubai-based Cazza Construction announced plans to build the world’s first 3D-printed skyscraper by 2020.
Although still in its infancy, 3D printing on a larger scale could drastically reduce the costs and risks intrinsically linked to globally complex supply chains. It’s not too soon for chief risk and compliance officers, as well as financial executives, across all industries to weigh the risks and rewards, like the following:
Affordable domestic production. By using 3D printing, companies can save both on labor costs, as well as the costs of transporting the materials. These cost savings alone greatly tip the scales toward the benefits of domestic, as opposed to overseas, production and cheaper labor abroad.
Understanding how to identify where to use 3D printing in a supply chain is one of the first key questions to address.
From warehouse robots (very real) to equipment that you control with your mind (in the labs), new technologies appear so regularly that it can be hard to separate real from science fiction. But in the spare parts business, 3D printing has become “here and now”. Beyond cars and machine tools, 3D printers are now making spare parts to order for the US Marine Corps, container ships, and beverage filling plants. PwC’s recent survey of German manufacturers said that 85 percent of the spare parts providers assert that 3D printing will play a dominant role in their business.
As you approach this new technology, one question to consider is how to segment your inventory portfolio to determine which spare parts in your supply chain are best suited for 3D printing versus other approaches. In addition to supply-side considerations such as manufacturability, this requires analyzing cost-to-serve across alternative distribution approaches and demand-side characteristics like order-lines per year and demand volatility. Then the spares portfolio can be segmented into three categories.
It is proving a useful tool in enabling companies from multiple sectors to revolutionise their supply chains and 3D printing can also achieve significant cost-savings
Transforming computer-designed ideas into physical objects by applying layers of materials with a 3D printer is moving beyond early-use cases in manufacturing to make logistics more efficient and reduce costs across the supply chain.
MH Development Engineering, specialists in engineering bespoke systems and products, installed a 3D printer to enhance both its manufacturing business and systems design for research and development.
When creating systems that solve engineering problems, the company must be able to test concepts quickly. The 3D printer has aided this process by allowing prototyped parts to be created overnight.
SLM Solutions has revealed automotive giant, Audi has been using its selective laser melting process to produce prototypes and manufacture rarely-requested spare parts.
The German company has sought to adopt SLM’s metal 3D printing technology to target a number of automotive applications. Typically, it is the smaller, more complex, and less cost-sensitive components, like the water adapters for the Audi W12 engine, which are produced on-demand by Audi with an SLM 280 machine, that are most suitable to be additively manufactured.
Audi has been utilising metal additive manufacturing for special application areas, able to manufacture sizable components on the 280 x 280 x 365 mm3 build space. Thanks to the machines’ powerful 700W lasers build times are reduced, enhancing productivity while maintaining quality. It is enabling Audi to manufacture on-demand, supplying spare parts as and when they are needed, rather than producing them in advance and putting them into storage. Simplifying logistics and warehousing, implementing an on-demand production approach brings both economical and sustainability benefits, in addition to the rapid prototyping and greater creative freedom 3D printing technology is renowned for.