Additive manufacturing, which is also referred to as 3D printing, is a collective name for several technologies through which an object is constructed layer by layer. The industrial materials that are currently printable range from polymers to metals, including for example ceramics. The range of available materials is constantly and rapidly expanding. Whereas additive manufacturing was originally mostly used for prototyping, it is now more and more applied to end-products.

In some cases, additive manufacturing can be considered as a supplement to conventional production technologies. In other cases it is the only means through which complex products can be fabricated or a solution to cost-effective upscaling of production capacity at low risk in order to serve new verticals, new geographies, and offer new products that need testing.

The technique offers several advantages that optimise and transform both products and processes, and may result in unprecedented and significant business value.

The generic advantages of additive manufacturing are:
• Complexity is free; additive manufacturing offers complete design freedom which allows to design for the exact function of a product without constraints associated with conventional manufacturing.
• Minimum batch size is one; the cost per part produced is equal and significantly less dependent on batch size.
• Manufacturing when and wherever needed; production at or near point of use is possible.
• Minimum material waste; as material is added, not subtracted, material is saved in production which allows for cost savings, especially in cases where material is a significant driver of component cost.

Although the general consensus is that these advantages of fer great (potential) business value for both products and processes, there is a much divergence in visions of the type and depth of value that can be achieved. Therefore, we focused on assessing how much of this value is currently being unlocked by our discussion group. And how much potential do they see in the near future when the technology matures (becomes faster, more reliable and cheaper) and additive manufacturing systems and services improve?

Creating Business Value Through Additive Manufacturing

Assessing Business Value Potential Of Additive Manufacturing

In order to determine possibilities to add business value through additive manufacturing, it is essential to be aware of three basic underlying principles. These relate to the complexity of the product, advantages of scale when it comes to manufacturing, and the size of the object.

The technology offered by additive manufacturing makes it both possible and cost effective to produce complex shapes. This means the more complex the product or component, the more suitable additive manufacturing is, as opposed to conventional techniques.

The next underlying principle has to do with batch size. In general, the larger the series to be produced, the less suitable additive manufacturing is. Conventional manufacturing economics dictates that the larger the series, the lower the cost per unit. For additive manufacturing, each unit has the same cost.

Finally, additive manufacturing is in the current situation particularly suitable for producing smaller parts or products, which means businesses still have to turn to conventional technologies for larger parts.

Business Value Currently Achieved By Think Tank Participants

The specific business values that are currently being achieved based on the principles mentioned above, are best categorised with respect to added value for processes as well as products. The more this added value applies to customer-end applications, the more we see the occurrence of competitive advantage, new business models and propositions.

Our consultation partners currently see the following pockets of value being created:

Business value for processes:

• The time-to-market for new parts and products is reduced significantly. This boosts the speed of product innovation spectacularly.
• Asset maintenance or maintenance of machines in the field becomes easier: spare parts and specialised tooling are always available on demand.
• Assembly time and tooling costs are reduced if a product or part can be printed in one go, without requiring sub-assembly.

Business value for products:

• Related to the last point , additive manufacturing makes it also possible to optimise the design by printing a product that previously consisted of sub-assemblies in one go. This significantly decreases error rates during the lifetime of a product, and increases the product lifecycle.
• As the minimum production quantity is one unit, it is possible to offer (mass)- customisation. As a result, new verticals and geographical markets with specific needs can be opened up at low risk and low cost.
• By means of rapid prototyping and rapid testing, design can efficiently be optimised and the ‘voice of the customer’ can be included in new product development.

Current Business Models

Additive manufacturing opens up new business models and propositions. Our discussion partners indicated that they currently see the following business models emerging:

1. Co-Creation Platforms Enabled By Additive Manufacturing Additive manufacturing opens up the possibility to co-create with customers. Co-creation can be introduced in virtually all stages of the lifecycle of a product. During the concept phase of a new product, the voice of the customer can easily be incorporated by testing small batches. It can also be applied to offer customisation of an existing design, or to prolong the lifetime value of a product by offering customised add-ons to the product. In situations where customisation is of value to customers, premium pricing is justified.

2. Extreme Customisation Combined with tools like measuring guides and scanning tools, companies are now able to mass produce custom-fit items in a cost-effective manner. As the performance of fitted products is generally much higher, customer value will greatly increase as well. From prostheses to glasses to in-ear headphones, there is a surge of business models created around this ultimate form of customisation.

Although more and more home scanning tools are becoming available, it is important to note that for medical applications, such as prostheses and hearing aids, sophisticated professional devices are needed to achieve the high level of accuracy needed.

3. Lifecycle Management In the industry, lifecycle management is one of the most prominent current applications of additive manufacturing. Prolonging the lifecycle starts with the design phase of the product or part. Using the design possibilities offered by additive manufacturing, assembly might not be needed, which prolongs the lifecycle of a product and reduces errors. On the aftersales side, the life of machines in the field or the assets employed can be prolonged by using custom-made tooling and difficult to source, expensive to stock, customised spare parts.

4. Additive Manufacturing Service Propositions The growth in the adoption of additive manufacturing has resulted in the emergence of many new service propositions related to the supply of the technology as well as solutions within the entire associated process. Additive manufacturing requires many new capabilities that businesses have just started to build up, so there is a lot of space for service providers in this area. Understanding the design possibilities and possible product benefits, the specifications of designing for additive manufacturing, material and printing techniques, printer operations and post-processing, as well as the ability to adopt quality measures all require skilled and experienced employees. Businesses of all sorts are increasingly assessing the role they can play in supplying these additive manufacturing services.

Future Business Models

As the general maturity of additive manufacturing increases, the applicability of both a technological as an economical perspective increases as well. Our consultation partners indicated that they see potential; particularly as a result of the repeatability and accuracy of the technology, its increasing speed, the number of materials that can be used, multi-material print capabilities and the size of the printable surface. As soon as the speed of the hardware increases, the depreciation of the machine per printed part will be reduced and costs per product are lowered. This means that a larger portion of the product or part portfolio will be printable from an economic perspective.

In addition, the size of the printable surface has a positive influence on the business case. When you can print larger parts, you can also produce larger series in a single print job.

Challenges Encountered

In the current phase of adoption, during which most companies are searching for applications, are experimenting and implementing on a small scale, our consultation partners have indicated that their main challenges are in the following areas:

1. How To Develop The Business Case? When it comes to introducing this technology, developing a proper business case and correctly estimating the return on investment is a big challenge to decision-makers. Business case exercises will mostly fail if the scope is too narrow: successful business cases include the lifetime of a product as well as the value chain that supplies it. This, as opposed to just considering the direct production costs which in most cases will be lower through conventional manufacturing.

In other cases, it is more difficult to make the case. This is especially challenging for applications on the customer side. Masscustomisation is an example of this: are customers willing to pay a premium? Another example is innovation: how do you quantify the added value of rapid prototyping in product innovation or the reduction in the time-to-market?

2. How To Start: Isolation Or Collaboration? Due to the lack of both a widespread understanding of the possibilities as well as necessary skills and high investments associated with additive manufacturing, many of the businesses we spoke to start their additive manufacturing operations in collaboration or in partnership with other parties. Some businesses elect to set up manufacturing facilities or experimental pilots with competitors, which demands an approach to facilitate joint learning and eliminate competitive risk. Other companies teamed up with universities, technology experts and service providers to get on the learning curve as soon as possible.

3. Intellectual Property (IP) Considerations Additive manufacturing triggers new challenges from a legal perspective. First of all, companies working with additive manufacturing technology, or companies calling upon the services of additive manufacturing service providers, are facing new IP questions. When existing objects or designs are redesigned for manufacturing through additive manufacturing, this may constitute a breach of third party IP rights on the original objects or designs. This is the case for example in a scenario in which a company maintains its existing assets by means of 3D printed tooling and spare parts. Here, the issue arises of whether this violates the IP of the original manufacturer.

Some of our discussion partners indicate that they respond to this issue by avoiding it through strictly working with objects which are self-designed or free from third party IP rights. However, this approach forces these companies to manoeuvre their way around innovation, and will thus not support a sustainable long-term innovation strategy. Additive manufacturing — like other new ‘greenfield’ business models and processes — calls for new or modernised legislative frameworks and a redesign of IP laws to provide legal certainty to businesses.

4. What Are The Risks? We see a similar line of thought in terms of product liability. When manufacturing a previously existing part through additive manufacturing, specific processes and controls need to be put in place to ensure the quality and integrity of parts. In addition, controls need to be in place throughout the entire digital processes through which the file is shared and used.

Meanwhile, service providers and their customers are currently trying to find solutions for these matters. One possibility is to give purchasers the opportunity to inspect and qualify specific additive manufacturing systems at service providers. Following certification by the customer, the supplier simply prints out the part requested on the approved 3D printer. An additional service could involve making the entire production process traceable and digitally secure. This means it is always possible to determine when a certain 3D element has been made and how the production process was carried out.

5. How To Make The Internal Organisation Aware Of The Opportunities? The opportunities offered by additive manufacturing require changes to the composition and culture of the organisation. In addition to acquiring and accumulating the right skills, employees have to be made aware of the possibilities offered by additive manufacturing and encouraged to look beyond current applications. Applications such as customisation and co-creation with customers offer unprecedented possibilities, providing that traditional ideas about design, business models and proposition are abandoned. Innovative ideas are required to get ahead in the new world resulting from the fourth industrial revolution.