3YOURMIND's Chief Operations Officer, Bas de Jong, shares his thoughts on how to strategically find strong additive manufacturing use cases.
Additive manufacturing has made a lot of big promises over the years. We’ve watched the 3D printing industry bubble with excitement over new materials, design capabilities, and print technologies, proclaiming that 3D printing is the match that will spark the powder keg of the next industrial revolution.
And yes, now is an exciting time to be in additive manufacturing (AM). However, the industry has the steep task of ‘crossing the chasm’ from theoretical applications to sound manufacturing business cases. Despite how much we may want to believe otherwise, AM isn’t always the smart or cost-effective solution. In most cases, traditional manufacturing will still win over AM. However, there are many compelling AM opportunities where AM doesn’t just replace conventional manufacturing methods; it outperforms them.
Instead of persuading industries to swap low-cost parts for expensive AM alternatives, we need to identify business cases where AM adds value beyond novelty. This article will discuss three ways to identify valuable business cases to help your organization adopt more efficient and effective additive manufacturing practices.
Is Your Business Experiencing Longtail Effect?
Companies, especially original equipment manufacturers (OEMs), often experience what is known as the longtail effect. The longtail effect describes businesses that maintain a large inventory of infrequently used or sold spare parts to reduce the lead time required to produce a new spare part.
When a part breaks and is urgently needed, warehousing spare parts can result in crucial cost savings. However, when a part is stored without use for months, years, or even decades, it risks obsolescence, and the annual cost of keeping longtail parts decreases its value over time.
In addition to storing costs long-term, organizations may distribute parts over several locations. So, even if the part is available in a warehouse, it may take days, weeks, or even months (given current logistical challenges), for that part to arrive where it is needed. As a result, when a part breaks and no replacement is available, the time spent not operating at total capacity can directly eat into a company’s bottom line.
For example, let’s look at the railway industry. If a train delivers goods across long distances and a critical spare part breaks en route to its destination, that can create significant challenges. Even in a warehouse, spare maintenance parts may not be available nearby, so costly delays may occur. Furthermore, if the part isn’t available and needs to be remanufactured, that can lead to production lead times of up to two years. So, in this instance, producing a part on-demand using additive manufacturing can further avoid downstream transportation delays that impact the rest of the supply chain.
See how Germany’s Deutsche Bahn leverages its employees to identify AM applications.
Fortunately, evaluating these longtail spare parts through an additive manufacturing lens can create valuable on-demand manufacturing use cases. By analyzing conventionally manufactured parts for 3D printing compatibility, businesses can create a digital inventory of 3D spare parts. Then, when the part is needed, it can be printed locally within hours. As a result, the business gets its operation back up and running more quickly, generating significant time, revenue, transportation, and warehousing savings.
Consider the Total Cost of Ownership
When you speak to OEMs or tier suppliers, one of the first questions is, “How much does the part cost?” And it doesn’t come as a surprise. For decades, the globalized manufacturing industry has created a culture dominated by cheap, just-in-time parts. And though that practice isn’t likely to go away anytime soon, businesses can discover significant cost savings that are more than just a budget line item by shifting from a cost-per-part to a total cost of ownership mindset.
For example, a conventionally manufactured part performs just as well as a part produced by additive manufacturing, but it is much cheaper. A sensible business person will choose the more affordable part 99% of the time. However, considering factors like transportation and warehousing, that conventionally manufactured part gets much more expensive over time.
Today, our customers cite that warehousing and logistics make up 25% of the part’s cost. To illustrate this, let’s say a part costs $100 and the annual warehousing and logistics cost for the year is $25. After one year, that part now costs $125. If a spare part is in storage for ten years, which is not uncommon, that part now costs the business $350. The cost of not using the part is now more than it was initially worth.
However, for the sake of argument, let’s say that an identical part produced with 3D printing costs $200 – double the cost of the conventionally produced part. That part is ‘stored’ in a digital inventory, which prevents the part from losing value due to the longtail effect.
But the cost per part isn’t the only factor to consider. If we zoom out and shift to a total cost of ownership perspective, we can see much more at stake than a mere price differential. For example, there’s an opportunity cost associated with storing conventionally manufactured parts long-term, specifically capital locked in unused parts. Although being prepared with spare parts is crucial to avert downtime, purchasing large amounts becomes expensive, especially if parts are infrequently used. In contrast, because the AM parts don’t need to be stored in large quantities and printed as needed, warehousing budgets can be redirected to other activities like research and development, new machinery, or several other activities.
In addition, there are also factors like shipping costs to consider. Although 3D printers aren’t likely to be located in every manufacturing facility anytime soon, establishing production closer to its end-use helps limit the number of rush deliveries, which can lead to significant fuel savings.
For example, a 2022 study published by the Journal of Manufacturing Science and Engineering suggests that AM-enabled product-inventory-transportation (PIT) supply chains can achieve a 6.26% decrease in carbon emissions. As a result, enterprises can leverage strong AM use cases to help lower transportation costs and reduce carbon emissions associated with manufacturing activities.
Keep it Simple
When starting in AM, many businesses focus on technically exciting and complex parts, but economically not very cost-effective. So instead, a better way forward is to prioritize ‘low hanging fruit’ components to generate quick wins.
These ‘low-hanging fruit’ are usually not the most complex parts, but a lower volume of simple parts can create positive outcomes if you start printing them early in your AM journey. In addition, by focusing on these parts, you avoid certification problems when pursuing complex and more critical parts.
However, these ‘low-hanging’ parts must be shared with stakeholders to be more effective so everyone can experience the benefits of easy-to-print parts organization-wide. For example, let’s say a company has a department in the U.S. that found great AM use cases and is printing those parts in its departments and facilities. However, that company’s French or German departments don’t know that these parts can be 3D printed and, therefore, miss out on opportunities to reap the benefits.
In cases like this, it’s important to underline how vital sharing AM knowledge is. It’s often difficult for companies to find strong AM use cases because identifying use cases is very dependent on a few individuals in the company with AM knowledge. If companies only have a few siloed AM experts focused on complex, critical parts, then companies miss a lot of opportunities to gain ‘quick wins’ in AM.
The circumstances surrounding AM adoption are perhaps the best they’ve ever been. Pinched supply chains and surging transportation costs will continue to create more demand for manufacturing capabilities to produce cost-effective parts closer to where they’re needed most.
As an industry, we need to use this momentum to equip manufacturers with innovative operations to tackle the next generation of manufacturing challenges. And the only way to do that is to demonstrate valuable AM business cases.
Additive manufacturing will only leap into the mainstream when it can show business cases that resolve customer pain points. Likewise, AM adoption will only become possible when it considers each industry’s digital transformation journey and the hurdles that must be crossed to make widespread AM adoption possible. As an industry, it’s our job to mindfully guide manufacturers’ digital transformation journey to promote long-term technology partnerships that will lay the groundwork for the next generation of manufacturing.
Bas de Jong is the Chief Operations Officer at 3YOURMIND, a software workflow solution dedicated to helping companies find, qualify, and print 3D parts for on-demand manufacturing. Bas previously worked at Ultimaker as Head of Global Business Development and has over eight years of experience helping commercial industries adopt cost-saving additive manufacturing technologies.
Ready to scale up your additive manufacturing strategy? Chat with us to find out whether your company can benefit from more AM use cases.