7 minute read 18 Nov 2019
Designers watching 3d printer in office

How additive manufacturing is becoming a core process and value driver

By

Stefana Karevska

EY Global Advisory Additive Manufacturing/ 3D Printing Leader

Additive Manufacturing enthusiast. Passionate about helping EY clients to reinvent their business with additive manufacturing. Debate coach. Table-tennis player.

7 minute read 18 Nov 2019

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Additive manufacturing will transform how products are produced and significantly cut the gap between design/development time and end-use.

Additive Manufacturing (AM) has now evolved beyond prototyping and is becoming a core component in the serial production of functional parts. Companies should now identify where it adds value and advantage – before their competitors do.

AM, also known as 3D printing (3DP), is a digital manufacturing process that involves slicing three-dimensional digital designs into layers and then producing them, layer by layer, using various material.

It gives companies the freedom to create any complex object, including ones with internal structures, and offers designers a new way to create features that were not possible before – almost instantly.

AM reaches the tipping point

For a technology that was first created in the 1980s, AM has taken some time to reach the mainstream. But this year, according to a new EY survey (pdf), AM has reached the tipping point. almost two-thirds (65%) of companies surveyed have now tried the technology.

The real change, though, is in the use of AM for end parts and components. In 2016, our survey found 5% of companies were doing this, across all industries and countries; companies are crossing the chasm in terms of adoption: this year, that figure rose to 18%. This means that AM has reached — and exceeded — the crucial tipping point, from being the focus of enthusiasts and visionaries to becoming a technology with broad applications. Adoption of AM has reached another level.

So which industries are the lead adopters of AM? The aerospace industry has the highest AM experience of all sectors with 78% of companies claiming they have used the technology. But in terms of using AM for end parts and components, life sciences and chemicals sector lead the way at 22%. Aerospace follows at 18%.

Some life sciences companies are using AM to develop state-of-the-art implants, hearing aids and other personalized medical devices – often right at the point of delivery for patients. A number of chemicals companies, including producers of chemical raw materials and of semi-finished or finished goods such as plastics, have taken advantage of AM technology both to produce parts for themselves and to become vendors of AM materials to other companies.

How will AM evolve in serial production?

By 2022, 46% of the surveyed companies expect to use AM as a production technology for their end-use products. There are two scenarios in this future: that AM will replace traditional manufacturing technologies or that it will become an additional production technology.

This first scenario of AM replacing traditional manufacturing technologies is represented particularly strongly in the logistics and transportation sector. This may be because of 3DP’s logistical benefits: manufacturing closer to customers can have a huge financial impact, since it saves handling and transportation costs and reduces potential customer downtime.

In the second scenario, AM could become an additional production technology, existing side-by-side with technologies inside a company. In fact, production processes could be supplemented by additive manufacturing, since it offers companies an opportunity to produce products with improved functionality and unique features.

The evolution of AM in serial production will depend on companies improving and changing the value chain in new ways, by finding the value-add in the products they create. The real disruption will be around getting products to end customers – for example using AM to make medical products in hospitals on-demand for individual patients or cutting logistics costs by making parts closer to where buyers are based. There could also be huge tax and duty implications when parts don’t have to cross borders to get to buyers.

Value creation may increasingly be harnessed by middlemen or third parties, and on digital platforms where parts can be scanned and replicated on demand. But for companies, it could mean becoming a service provider by integrating AM into their core business.

This is what one chemicals company has done – it set up a dedicated AM business unit both to produce its own machine parts, such as heat exchangers and to target external customers, by developing materials and processes and offering 3DP engineering services.

What does this mean for your enterprise?

AM could deliver three ascending levels of benefit for businesses:

1. Efficiency

AM is applied within the existing supply chain and operations to improve efficiency (for example, with better prototypes, molds and machine parts, or as a production strategy for lot size one parts). Products are not redesigned at this level.

2. Growth

AM enables the (re)design and creation of end-use products with improved functionality or ones that could not be made previously, so satisfying unmet customer needs and winning new markets.

3. Transformation

AM provides the opportunity for companies to extend or change their business models, reposition themselves in the value chain, or even gain competitive advantage from the technology by becoming an AM vendor.

To capitalize on these benefits, organizations would be well advised to engage an advisor to perform an AM diagnostic survey to recommend solutions, opportunities to add value, and a roadmap for implementation.

Anticipating the impact on the entire value chain

Currently there are five categories of parties in the AM value chain:

  • Systems manufacturers: primarily original equipment manufacturers of AM machines; most of them also offer related software, materials and services
  • Materials producers: providing raw materials for AM
  • Software developers: such as for design, process simulation, workflow and CAD-model slicing
  • 3D scanning and reverse engineering companies: focusing on the reverse process of scanning existing products, to digitalize or further engineer/process them.
  • AM service providers: such as AM contract manufacturing, design, engineering or technical consulting.

But increasingly we will see all-in-one suppliers as companies extend their portfolios to incorporate more of the must-have capabilities. This trend is uppermost among materials producers from traditional manufacturing backgrounds – such as chemicals and metallurgy – that have become service providers to tap into application ideas for new markets.

AM production looks likely to become embedded in more commonplace locations. Almost two thirds of survey respondents can now foresee producing close to customers – up a massive 50 percentage points from 2016 (15%).

Consumer goods companies have even higher expectations with 70% forecasting this evolution. For example, customers might be able to step into a local shop to buy a pair of shoes made with their preferred materials and customized with the patterns and colors of their choice.

Additionally, more than one-third of companies (34%) – double the 2016 figure – think AM could boost their competitiveness by enabling them to bring value creation processes back in house.

There are still challenges ahead, however.

  1. Price: Only companies who really know how to use AM will invest in directly – they  have to know the value-add and application.
  2. Knowledge: This is a key driver, but there is a big question mark over how fast AM knowledge and skills will spread. Currently there are no standard AM programs in universities, for example. And companies are struggling to identify use cases too. There are no systematic means of rethinking entire strategies built on AM.
  3. Technological limitation: This is a short-term challenge only, and the least significant as M&A drives development.

Overcoming these challenges – particularly knowledge gathering – will pave the way for companies to adopt AM in ways that could transform the value they offer to consumers and rewrite the rules of competitive advantage.

Seeking input from people with greater knowledge is key. Many companies that have started working with AM only have in-house experience at the engineer level – they need guidance at the C-suite level to understand and quantify how AM could impact their value chain.

There is no doubt AM is here to stay. The question is, where does it fit in your enterprise?

Summary

Additive manufacturing (AM) has now evolved beyond prototyping and is becoming a core component in the serial production of functional parts. Companies should now identify where it adds value and advantage – before their competitors do.

About this article

By

Stefana Karevska

EY Global Advisory Additive Manufacturing/ 3D Printing Leader

Additive Manufacturing enthusiast. Passionate about helping EY clients to reinvent their business with additive manufacturing. Debate coach. Table-tennis player.