AM Economics - 3DP and the value chain

AM Economics The impact of 3D printing on the value chain

“Finding the business case” Onno Ponfoort

Amsterdam, June 8, 2015

Product

Development

& Design

Production

Efficiency

Supply

Chain

Optimi-

sation

New

Business

Models

2

Agenda

• Introduction

• AM / 3DP Benefits & obstacles

• Impact on the Value Chain

• Cases

• Takeaways

AM Economics / Impact 3DP on value chain / Amsterdam / June 8, 2015

3

• Oldest consulting firm in the Netherlands

• Founded in 1938

• General practice, 50 / 50 split Private / Public

• Active globally, offices in 6 countries

• Over 300 staff

• AM / 3DP practice: over 10 years of experience

• Assists and creates awareness for companies,

organizations and regional authorities

• Regarding their strategies, investments,

business development and organizational

set up for AM / 3DP


4

Berenschot Propositions

3D Printing Strategy

Market research & Competitor 3D analysis

Strategy, Road mapping & scenarios

Business modelling & development

Customer driven supply chain

Strategy implementation

3D- BPOI

Business process redesign

Supply chain rationalisation

3D Impact analysis

Portfolio analysis

Pruning

Sustainability/circular economy

Financing 3D printing activities

Investment analysis / business case

Subsidies

Cost of ownership

Master classes Business impact 3DP


Fo

r co

mp

an

ies

• Innovation projects

• Market analysis (technology,

companies, applications, markets)

• Road mapping for regions/ clusters

• Program development

• Funding

• Program and project management

• Business development support

• Campus and eco system support

• Organise cooperation

• Develop business model (knowledge, experience,

revenues)

• Growth programs / accelerators

Fo

r reg

ion

s o

r clu

ste

rs

The Berenschot Innovation Circle

5

Some examples of projects


6

Agenda

• Introduction



• Cases

• Takeaways


7

• No tooling

or cheaper tooling

• Less

transportation

• Lower

warehousing

• Less working

capital required

• Complexity for free

• Added features

(cooling, isola-tion,

structures,

porosity, con-

ductivity, etc)

• Hybrid materials

• Light-weight

• Less assembly by

integrated design

• Ergonomics

• Interfaces with

other products

• Body contours

(external and

internal)

• Aesthetics

• Use specific

variations

• Less waste

• Light weight

• Less fuel

consumption

• Efficient supply

chains

• Life Cycle Analysis

• Prototyping,

• Shorten lead time

or time-to-market

• Small series

• Supply chains (on

demand, on

location)

• Services

• Co-creation /

home creation

Customisation Sustainability New business

models Lower costs Better design

Additive Manufacturing: Benefits we help you to achieve


8

• Costs: engineering, man-hours and material costs

• Quicker and more accurate machines larger build space

• Quality and safety: especially lack of industry standards

• Communication protocols, legal clarity on IP

• Education: trained operators, designers, business developers

Additive Manufacturing: still some obstacles


9

Gartner hype cycle for 3D printing

AM / 3DP

accepted as

# 1 method

for many

applications


10

Agenda

• Introduction



• Cases

• Takeaways


11

AM / 3DP impacts every step in the value chain (1)

Impact on Product Development & Design • Form freedom for engineering and design: performance breakthroughs and product solutions

• New design principles, design and analysis tools. Next to rapid prototyping also rapid testing

• Design for function without conventional manufacturing constraints, early design verification

• Integration for fewer parts and less assembly not possible with existing technologies.

Drivers:

• Better solutions and better performance

• Risk reductions and lower costs

• Shorter lead time / time to market


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Example: Product Development & Design

• Traditional titanium wedge wire filters are difficult

and time consuming to manufacture.

• Badly constructed filters impact flow rate and

energy consumption (Eg. In UK 13% in 2007, being 44.8 million MWh/year, 6%

of the UK’s carbon footprint).

• AM allows to create filters with aligned and

uniform apertures, which leads to a decrease in

the pumping energy required.

• This is due to lower pressure drops by higher flow

rates.

Up to 30% more energy efficient

Less labour and faster production with AM


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Impact on Production efficiency Allows for initial or small series parts production (eg. Direct printing or via AM printed moulds)

In process design iterations or sub-module assembly checks

Fewer parts to order, less assembly, less risk during build-up

Time savings, energy savings, process improvements

Drivers:

• Lower costs and timing benefits

compared to existing production set up


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Example: Production efficiency

• Traditional production of halogen light bulbs at

Havells uses a burner that heats glass to

temperatures of about 2000oC.

The original burner is welded (20 parts)

It has a working life of about 6 months. Then

leakage occurs in one of the welded joints which

causes shut downs in production

• The AM burner is redesigned

and produced in one piece

• Runs for 90 weeks (and counting)

• No production stops during that

period

• Break even within 1 year


Traditional AM burner

burner assembly

Cost per burner € 300,- € 800,-

Cost for burner quality control € 20,- € 50,-

Exchange & Maintenance cost ca. € 500 ca. € 500

Durability 20 weeks 90 weeks

Yearly exchange costs (64 burners) € 131.200 € 43.200

Cost for redesign - € 50.000,-

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Transformation in Manufacturing*

Current State - Mass Production & Centralized Manufacturing

Emerging State - Mass Complexity & Distributed Manufacturing

Mass

Production Economies

of Scale Product

Distribution

Mass

Customization Economies

of Scope

Distributed

Manufacturing

Design for

Manufacturing

Design for

Use

* Slide courtesy of AM Economics / Impact 3DP on value chain / Amsterdam / June 8, 2015

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Impact on the Supply chain Logistics: fewer stock, print on demand

Distributed manufacturing: print on location, supply and control of base materials (powders)

Spare parts: local production, engineering changes, ‘Hybrid wholesale’, end of life

Repair and maintenance: fewer scrap, cost saving, faster repair

Drivers:

• Lower costs and timing benefits

compared to existing production set up

• Less working capital committed


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Example: Supply Chain


100% Repair/

assembly Design

No waste (0%)

AM (local shop)

Final

Transport Direct Spare supply chain

20- 70% Repair/

assembly

WASTE (30-80%)

Design Transport

Transport

Production Storage

(Bulk/

Regional) Receipt

(local service)

final transport

Traditional spare part supply chain

• superior leadtimes

• lower costs

• no inventory of spare parts

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Business model 1

Balancing

end of stock

Enough volume to

cover costs

Customer flexibility

Costs - ?

NB Design for traditional

and AM from start

Business model 2

Continuously

improved parts

Essential

adjustments

Co create with the

customer

Margin +

Business model 3

Parts on demand

Value proposition

Niche markets

Margin ++


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3D print

and last mile,

from 100 locations

Some developments related to supply chain


25 parts made

and operational

in space

Scan & 3D print

on location

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Impact on Business Models Democratisation of design, allowing end user to impact design and engineering phase

Custom fit, custom build, requiring more and better interaction with customers/users

New functions in the value chain (AM file warehouse) and new partnerships

From B-to-B orC C-to-B and C-to-C

Drivers:

• Customisation and customer benefits

• Added value and higher margins

• Shorter time to market


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Example New Business Model

• Traditionally, unique products and own designs

were hard or expensive to get manufactured

• AM allows for a the rise of a distributed

manufacturing network like 3D Hubs.

• Started out as a platform for

cheaperhome use printers

• Steadiliy becoming more

professional: metal printers,

high end plastics,

professional designers


WE'RE CONNECTING YOU

TO 17.600+

LOCAL 3D PRINTERS

Started May 2013

€3,4 million investment secured September 2014

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'Hybrid Wholesale'

•

Technical Wholesale

under constant pressure.

Added value is questioned

3D Service providers have a hard time

convincing industrial partners

of their quality output

Hybrid Wholesale

Certified parts on stock

+

The possibility to 3D print certified designs

and special parts locally

+

Added Value logistics:

Managing stocks and spares,

pick-up location for products

ordered online

Technically educated staff

Vision on the future of industrial services

New role in the supply chain!!


Quality Investments

for Additive Manufacturing

Training curriculum for

Additive Manufacturing

Apply now!

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Full curriculum of 12 international renowned cases

AM Economics Training Curriculum

Learnings and examples of cases

Improvement of

production efficiency

3DS Layerwise (BE) Burner for halogen

lamp (Havells)

Arcam (SE) Improved and cost

effective hip replacement

Efficiency & effectiveness

of product development

Solid Thinking (US) Design Software

for AM

Inspire (CH) Quality assurance in AM product

development

New product designs ASML (NL) Optimized cooling

channels

Croft (UK) Revolutionary filter

designs

New supply chain structures 3D Hubs (NL) Distributed local

printer network

UMCU (NL) Cost savings

in logistics

New business models Additively (CH) Online Platform for

Industrial 3D-printing

Materialise (BE) Service bureau

for AM


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Agenda

• Introduction



• Cases

• Takeaways


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The Berenschot Business Model Cube®


Ind

us

try

Sp

ec

ific

Information

& knowledge

sharing

B2C

Enabling

services &

development

Production

of parts &

tooling

Ge

ne

ric

B2B

Specific

factors for

success

Specific

factors for

success

Specific

factors for

success

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Takeaways

• AM / 3DP is already heaviliy used for prototyping, it will be used more and more for final part production

• AM / 3DP impacts every step of the value chain

• Main drivers for investing in AM / 3DP are • Better solutions and better performance • Customisation and customer benefits • Shorter lead time / time to market • Lower costs • Added value and higher margins

• Make use of our expertise to achieve best in class


Documents

AM Economics - 3DP and the value chain