The business case for scaling Additive Manufacturing

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The business case for scaling Additive Manufacturing

Improving product functionality while reducing costs

High material costs used to make the business case of Additive Manufacturing (AM) less favourable compared to mass production. However: when AM design and printing are used to unlock benefits in product functionality, production costs or time-to-market, AM offers clear strategic opportunities for future success.

From prototyping to end products

Additive Manufacturing (also known as 3D printing) has been around for some time, with the emergence of plastic printing in the Eighties, followed by metal printing in the Mid-Nineties. At the time, the main investment focus was on technology, printer development, and prototyping. However, recently there has been a shift from prototyping to end product printing.

The business case for scaling Additive Manufacturing

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Plastics and metals

Not all materials can be printed in the future, such as vulcanised rubber. This means that manufacturers should not try to copy existing products, but use AM materials in combination with smart AM design to mimic – or even better, improve – conventional material characteristics. Plastic has the same natural elasticity and tear resistance as rubber when it is printed in different levels of thickness.

An even more interesting material is metal powder. The quality of printed metal objects is similar or superior to that of moulded metal ones, as the uniform heating and cooling of every “voxel” (the 3D equivalent of a pixel) causes less material stress than injection moulding. And although metal printing is more expensive than moulding, the costs are decreasing rapidly.

Design as the key value creator

Design will be the key value creator and differentiator, since the combination of design and material know-how allows manufacturers to mimic and even improve existing products. With AM, manufacturers can construct e.g. hollow or organic shapes or product parts with internal structures – which is either impossible or too expensive in conventional manufacturing. This results in improved product functionality as well as cost reduction. AM can reduce weight, reduce the number of part and it also offers the benefits of reduced time to market, reduced inventory space/cost and low-cost customisation.

From aerospace to healthcare

Many industries, from aerospace and aviation to healthcare, already recognise these benefits. A number of successful applications are discussed in our Point of View The business case for scaling Additive Manufacturing. For instance, the lightweight jet engine bracket. For aerospace and aviation, producing lightweight parts instead of (heavy) metal ones can save millions of euros. In fact, a reduction of 1 kilo of weight on a plane will lead to a cost reduction of approximately 2 million euros on fuel costs over the total lifetime of an airplane. This outweighs the higher AM production costs by far.

Impact on products and supply chain

Additive Manufacturing has the potential to reduce the capital required to reach minimum efficient scale for production, lowering the manufacturing barriers to entry for a given location. Also, since AM offers more flexibility, it facilitates an increase in the variety of products that a unit of capital can produce, reducing the costs associated with production changeovers and customisation – and thus the overall amount of required capital.

Four strategic paths

Both developments present companies with the choice between four paths:

  1. Stasis - no radical alterations, but exploration of AM technologies to improve value delivery for current products within existing supply chains.
  2. Supply chain evolution - advantage of scale economics is used as a potential enabler of supply chain transformation for current products.
  3. Product evolution - advantage of scale economics used to achieve new levels of performance or innovation.
  4. Business model evolution - companies alter both supply chains and products in pursuit of new business models.

Deloitte's Additive Manufacturing solutions

Deloitte can help you understand the impact as well as the opportunities of AM, and how to scale and accelerate AM in your organisation. Our AM Initiative begins with defining your winning aspirations and documenting your value and operating models objectives. Then we move from value creation with AM and assessing the required capabilities needed to scale, to a roadmap for development – and eventually, future success.

Ready, set, go!

Our Point of View offers more insight into the benefits and strategic opportunities of AM, and especially AM design – improving conventional material characteristics. Differentiating in this field is necessary as a competitive edge.

Feel free to get in touch with our expert team, and discuss the opportunities for your organisation!

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