The Real ROI of Additive Manufacturing: Scaling to Macro for Strategic-Level Benefit10 August 2023
Much of the discourse surrounding additive manufacturing has revolved around the part-level business case, focusing on the savings associated with printing an item rather than subtractively machining it. Even when scaled up to an overall lifespan ROI, the applications were still centered on single parts – for example, in aerospace, the fuel consumption reduction as a result of lightweighting a component.
However, these examples neglect the broader and further reaching ROI that Additive Manufacturing facilitates. Shorter lead times, faster market entrances, greater customisation and supply chain evolution, exemplify AM’s ability to facilitate the overhauling of value chains and deliver strategic transformation to companies and even entire industries.
McKinsey reported that the AM industry is worth $13.4 billion, as of 2020, with an annual growth rate of 22%. These trends are crystallized in Markets and Markets Industry Forecasts, which charts the growth in adoption from 2017 to 2023, along with differentiation by industry vertical. Whilst the automotive, aerospace, defense, healthcare and consumer goods sectors have varied uses of AM, there is an equality in adoption between these 5 industries, underlining the cross-vertical ubiquity of additive as a strategic value-add.
Three critical use cases stand out for their substantial impact on business and their potential to drive real return on investment – they demonstrate how AM evidently facilitates strategic transformation. These use cases leverage the unique capabilities of AM to revolutionize traditional practices, improve efficiency, and enhance customer experiences. This article explores each critical use case with specific industry examples to highlight their significance.
Prototyping: Accelerating Innovation and Product Development
Industry Example: Automotive
Accenture noted in their 2022 report Industrial Speedsters that ‘Industrial Enterprises’ are increasingly looking to condense the time taken between design, development and manufacture, aiming to ensure customers receive new products faster. This is a concern the automotive industry is looking to address, harnessing AM to streamline rapid prototyping.
Companies like Ford, Volvo and Volkswagen have utilized 3D printing to accelerate their product development cycles and improve innovation.
Traditionally, automotive companies invested significant time and resources in creating physical prototypes for testing and validation, using traditional machining, molding or clay modeling techniques. However, with AM, these companies can quickly transform digital designs into physical models, allowing engineers and designers to evaluate multiple iterations rapidly. The ability to create faster prototypes on-demand reduces lead time in R&D, streamlines the design process, and fosters collaboration between cross-functional teams.
For instance, Ford leveraged AM to prototype new vehicle parts for their Ford GT supercar. Using 3D printing, they were able to produce lightweight and optimized components, leading to better performance and fuel efficiency. The printing of a dual exhaust system, complete with customized badge, shows how the technique can be used to facilitate customisation and innovation, both in prototyping and indeed end-parts.
The accelerated prototyping process allowed Ford to bring the Ford GT to market faster, gaining a competitive edge in the high-performance sports car segment. Where traditionally produced prototyping would have attracted substantive costs and lead times, 3D printing not only reduced prototyping costs but also allowed Ford to access far greater top-line benefits from bringing the car to market sooner to start generating revenue.
Volkswagen also has a commitment to AM, exemplified by the opening of their own printing center in Wolfsburg in 2018. The facility has allowed research and development of key parts, including the overhaul of a nozzle to prevent corrosion. Used in the chassis of the VW Tiguan, the part was developed and implemented due to 3D printing capability. With more than 458,000 VW Tiguans sold worldwide in 2022, customers are able to reap the benefits of AM produced parts, with shorter lead times, whilst production costs can be reduced without the risk of compromising on quality.
The shortened value added chain, a direct result of increased onsite capability also lessens environmental impact, as well as allowing for quicker and smoother product delivery. The shortening of the value added chain is, according to Deloitte ‘broader and more transformative’ than traditional supply chain management driven by ‘innovations in product development and customer engagement’. AM is responsible for fuelling these ‘innovations in product development’, with the speed at which prototypes can be developed resulting in increased customer engagement, with the ability to react to changing market and consumer trends quicker.
Many enterprise organizations struggle to harness the power of AM because of the disconnect between design engineers and the internal additive manufacturing team. Utilizing software such as AMFG, AI-driven order portals assist with the education of DFAM processes and mobilize design engineers to request and reiterate prototypes, accelerating the go-to-market process. Ford is so dedicated to making this disconnect a thing of the past, that they recently opened a 3D printing center in Valencia, Spain. Built to facilitate the first fully electrical model to be manufactured in Europe, Ford’s facility thrives on integrated communication. Engineers can request designs via an app, which are then designed digitally and printed.
Not only has this streamlined the design process but it has facilitated an 80% lead time reduction. As well as this, the prototypes developed are able to be inserted into a Digital Warehouse, with 5,000 parts designed and placed in the system. 2021 saw 20,000 parts printed. Using software solutions has allowed Ford to expand their 3D printing capability, take control of their inventory and allow for continuous development.
L’Oreal’s partnership with AMFG has demonstrated the ability software solutions have to streamline the prototyping process and improve the speed of new product introduction. L’Oreal’s commitment to AM began with the formation of a team to develop in house printing in 2018. The research has continued apace, and now sees the production of 15,000 3D printed parts yearly, from 20 factories. The schedule of traditional manufacturing and prototyping methods and that of AM methods is incomparable.
Previously, prototypes could take a week to be designed, created and shipped to the correct space. Not only has the development and transferral to market time been drastically cut, but time between uploading and designing CAD files and having a tangible product has also been drastically reduced. Moving from the initial prediction of a 24 hour window between uploading and having a physical model, the process now takes only 12 hours and the aim is that it will take closer to 6 in the near future.
Comparably, the automotive and cosmetics industries utilize Additive Manufacturing to continuously overhaul outdated prototyping processes.
Spare Parts Production: Revolutionizing Maintenance and Supply Chains
Industry Example: Aerospace
The aerospace industry faces unique challenges in maintaining an extensive fleet of aircraft with diverse components, some of which may no longer be in production. This complexity makes spare parts availability a critical concern for aircraft operators.
Additive manufacturing has emerged as a game-changer in aerospace, providing a solution to the spare parts conundrum. Companies like Airbus and Boeing have integrated 3D printing into their supply chain and maintenance operations.
With AM, aerospace companies can produce complex and rare spare parts on-demand, eliminating the need for large inventories and costly tooling. This significantly reduces lead times and minimizes the risk of grounded aircraft due to unavailable parts. As a result, airlines can maintain higher fleet availability, optimize maintenance costs, and improve operational efficiency.
Airbus, for example, adopted 3D printing to produce spare parts for their A350 XWB aircraft. By leveraging AM for spare parts production, Airbus has achieved cost savings and increased the reliability of its fleet, all while reducing the environmental impact associated with traditional manufacturing processes.
Boeing is certainly betting hard on the transformative propensity of AM, demonstrated by the opening of their Boeing Additive Manufacturing Plant in 2022. The plant enables fabrication of parts and full control of a spare parts inventory. Previously, parts to form a Boeing 737 winglet had a 6 week lead time and cost in the region of $60,000. Winglet parts manufactured on site took a total of 4 days, at a cost of $20,000. The reduction in lead times and costs enables Boeing to have greater control of their manufacturing capability and respond to issues of repair as they arise.
Distributed manufacturing, and enhanced on site capability reduces the reliance on existing supply chains, reducing logistics costs and considerations and allowing for greater control and implementation of digital aftermarket supply chains. Digital inventories are part of this movement towards growing digitalisation, streamlining traditional supply chain processes. Over a quarter of respondents in Make UK’s survey reported that adopting technology to mitigate supply chain risk is a key strategy.
An example of successfully combining digital solutions to enable visibility and seamless utilization of an emerging network exists in the partnership between Babcock and AMFG. Achieving a digital aftermarket supply chain relies on combining the physical capabilities of 3D printing with a software solution able to support a network. Babcock partnered with AMFG to bring this digital aftermarket offering to the defense space, revolutionizing platform availability for their end-customers’ critical military applications.
Mass Personalization and Customization
Industry Example: Consumer Goods
The consumer goods industry has witnessed a seismic shift towards personalization and customization. Consumers today seek products that cater to their unique preferences and tastes. Additive manufacturing has provided game-changing capability to enable companies in this sector to meet these demands effectively.
Companies like Nike and Adidas have embraced 3D printing to offer personalized products to their customers, such as custom-made athletic shoes. Starting in 2018 with the release of the Flyprint, aimed at elite marathon runners, Nike has continued to explore applications for 3D printing, including the ISPA Universal. Combining AI, AM and sustainable materials, the shoe also features cork insoles.
Oechsler AG partnered with Adidas to scale the production of 3D printed footwear, providing 3D printed, lattice midsoles. Oechsler utilizes AMFG’s software solution to help to manage this scale, with software infrastructure a critical component of growing additive from a small-scale venture to a critical mass volume technology capable of producing over one million parts per annum.
Through AM, consumer goods companies can manufacture products on-demand, catering to individual customer specifications without the need for costly retooling. This approach has empowered brands to engage with customers in new and exciting ways, fostering stronger brand loyalty and customer satisfaction.
For instance, Adidas introduced its Futurecraft 4D running shoes, which feature a 3D-printed midsole customized to each wearer’s foot contours. This level of personalization has generated significant buzz, attracting consumers seeking tailor-made products and driving the brand’s reputation for innovation and quality.
There is clearly an appetite to increase the customized, 3D printed shoe market. This is evident by the fact Hilos, an American startup, raised $5.1 million in investments. Hilos produce ‘platforms’ for shoes to be made on, adhering to design considerations and fit defined by customers. Creating a greater range of footwear than leisure options, Hilos aims to show the vast customizability 3D printing provides for all types of footwear. A study in partnership with Yale found the reduced number of components and steps required to facilitate production also resulted in 29% fewer emissions being released.
There are only 5 parts needed to make shoes, rather than the industry standard of 65, and only 12 assembly steps, down from 360 using legacy manufacturing methods. Assembly time is also reduced, from the industry standard 4 hours to 1. This streamlined production process enables Hilos to build and dispatch custom products for shipping 72 hours after an order has been placed.
To recap, time saved is a key benefit of utilizing AM. Products are able to be created on demand, in drastically reduced timeframes, saving on costs by optimizing production. Despite the reduction in cost, AM enables customisation as a priority, facilitating not only a cost-reductive ROI but also a revenue benefit.
At this level of scale, traceability and automation are key drivers for critical industries, such as the medical sector’s focus on compliance with critical ISO 13485 regulations. Increased traceability is necessary as the medical industry views Additive Manufacturing as a viable production method for a range of medical devices, including orthotics and prosthetics. AMFG’s partner HP has collaborated with five companies, all offering a range of different prosthetics.
The need for prosthetic parts to be exceptionally durable means finding manufacturing processes that can include all of those parameters has traditionally been difficult. Looking to overcome this obstacle, the contract manufacturer OT4 decided to use HP’s Multi Jet Fusion Technology.
There are quantifiable business metrics encapsulated in the partnerships. HP’s technology decreased overall production costs by 30% and saves an orthotist on average 10 hours work per patient. The number of patients needing orthotic and prosthetic solutions is not small, with 1.7 million prosthetic patients in the United States. However, the fact that each solution is tailored makes the situation a unique one in the world of manufacturing. Additive Manufacturing has revealed itself to be a viable option, capable of supporting innovation, improving the patient and healthcare provider experience and ensuring highly specific and tailored customisation.
The three critical use cases of additive manufacturing, namely prototyping, spare parts production, and mass personalization strategies, have reshaped industries and unlocked new opportunities for innovation and efficiency.
In the automotive industry, rapid prototyping has accelerated product development and enhanced vehicle performance. In aerospace, 3D printing has revolutionized spare parts production, improving fleet availability and reducing operational costs. In the consumer goods sector, mass customization through AM has allowed companies to offer personalized products, strengthening brand loyalty and increasing customer satisfaction.
As additive manufacturing continues to evolve and gain wider acceptance, industries across the board will continue to experience the transformative power of this technology. As companies harness the potential of AM’s critical use cases, they position themselves for long-term success in a rapidly evolving and competitive market landscape. From automotive to aerospace, from consumer goods to healthcare, additive manufacturing will continue to drive strategic transformation, optimize supply chains, and deliver a macro-level return on investment.
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