3-D printing takes shape
Additive
manufacturing is evolving quickly. Senior executives should begin preparing for
five disruptions that will accompany it.
3-D printing, or additive manufacturing, has come a long way from its
roots in the production of simple plastic prototypes. Today, 3-D printers can
not only handle materials ranging from titanium to human cartilage but also
produce fully functional components, including complex mechanisms, batteries,
transistors, and LEDs.
The capabilities of 3-D printing
hardware are evolving rapidly, too. They can build larger components and
achieve greater precision and finer resolution at higher speeds and lower
costs. Together, these advances have brought the technology to a tipping
point—it appears ready to emerge from its niche status and become a viable
alternative to conventional manufacturing processes in an increasing number of
applications.
Should this happen, the technology
would transform manufacturing flexibility—for example, by allowing companies to
slash development time, eliminate tooling costs, and simplify production
runs—while making it possible to create complex shapes and structures that
weren’t feasible before. Moreover, additive manufacturing would help companies
improve the productivity of materials by eliminating the waste that accrues in
traditional (subtractive) manufacturing and would thus spur the formation of a
beneficial circular economy (for more, see “Reenvisioning the industrial
economy,” available on mckinsey.com, on February 5). The economic
implications of 3-D printing are significant: McKinsey Global Institute
research suggests that it could have an impact of up to $550 billion a year by
2025.
The advantages of 3-D printing over
other manufacturing technologies could lead to profound changes in the way many
things are designed, developed, produced, and supported. Here are five 3-D
printing disruptions that senior executives should begin preparing for.
1.
Accelerated product-development cycles
Reducing time in product development
was a key benefit of the first 3-D printing machines, which were designed to
speed the creation of product prototypes (and in some cases helped reduce
turnaround times to a matter of hours, from days or weeks). Now many industries
are poised for a second wave of acceleration as the line between additive and
conventional manufacturing blurs.
For example, additive manufacturing
is already being used to get prototypes into the hands of customers faster, for
quicker and more detailed feedback. (This is happening thanks to advances in
printer resolution, higher-definition coloration, and the broader use of
materials, such as elastomers, that help customers envision the final product.)
The ability to make prototypes without tooling lets companies quickly test
multiple configurations to determine customer preferences, thus reducing
product-launch risk and time to market. Companies could even go into production
using 3-D printed parts and start selling products while the traditional
production tools were still being manufactured or before the decision to
produce them had been made. When companies did order those tools, they could
use additive-manufacturing techniques to make them, saving even more time and
money.
We expect that the use of such
techniques will contribute to significant reductions in product-development
cycle times over the next decade. (For example, 3-D printing makes some aspects
of day-to-day R&D work, such as producing simple lab apparatus, vastly more
productive.) Over time, 3-D printing will begin to affect how companies think
about R&D more broadly, given how the technology enhances the ability to
crowdsource ideas through remote cooperation. For some companies, that
crowdsourced brainpower might one day begin supplanting R&D activities, making
its management a new priority.
2.
New manufacturing strategies and footprints
As of 2011, only about 25 percent of
the additive-manufacturing market involved the direct manufacture of end
products. With a 60 percent annual growth rate, however, that is the industry’s
fastest-growing segment. As costs continue to fall and the capabilities of 3-D
printers increase, the range of parts that can be economically manufactured
using additive techniques will broaden dramatically. Boeing, for example,
already uses printers to make some 200 part numbers for ten different types of
aircraft, and medical-products companies are using them to create offerings
such as hip replacements.
Nonetheless, not every component
will be a candidate for the technology and reap its benefits (cost reductions,
performance improvements, or both). Companies should understand the
characteristics that help determine which ones are. These include components
with a high labor-cost element (such as time-consuming assembly and secondary machining
processes), complex tooling requirements or relatively low volumes (and thus
high tooling costs), or high obsolescence or scrap rates. Forward-looking
manufacturers are already investigating ways of triaging their existing parts
inventories to determine which hold the most potential.
Additive-manufacturing techniques
also have implications for manufacturing-footprint decisions. While there is
still a meaningful labor component to 3-D printed parts, the fact that it is
lower than that of conventionally manufactured ones might, for example, tip the
balance toward production closer to end customers. Alternatively, companies
could find that the fully digital nature of 3-D printing makes it possible to
produce complex parts in remote countries with lower input costs for
electricity and labor.
A related area that executives
should watch with interest is the development of the market for printing
materials. The cost of future materials is uncertain, as today many printers
use proprietary ones owned or licensed by the manufacturer of the printing
equipment. Should this change and more universal standards develop—thus
lowering prices—the implications for executives devising manufacturing
strategies and making footprint decisions would become very significant very
quickly.
3.
Shifting sources of profit
Additive-manufacturing technologies
could alter the way companies add value to their products and services. The
outsourcing of conventional manufacturing helped spur companies such as Nike to
rely more on their design skills. Likewise, 3-D printing techniques could
reduce the cost and complexity of other kinds of production and force companies
to differentiate their products in other ways. These could include everything
from making products more easily reparable (and thus longer lived) to creating
personalized designs.
Indeed, reducing the reliance on
hard tooling (which facilitates the manufacture of thousands of identical
items) creates an opportunity to offer customized or bespoke designs at lower
cost—and to a far broader range of customers. The additive manufacture of
individualized orthodontic braces is just one example of the potential of these
technologies. As more such offerings become technically viable, companies will
have to determine which are sufficiently appealing and commercially worthwhile.
The combination of mass customization and new design possibilities will up the
ante for many companies and could prove very disruptive to traditional players
in some segments.
In certain parts of the value chain,
the application of additive manufacturing will be less visible to customers,
although its impact may be just as profound. A key challenge in traditional
aftermarket supply chains, for example, is managing appropriate inventories of
spare parts, particularly for older, legacy products. The ability to
manufacture replacement parts on demand using 3-D printers could transform the
economics of aftermarket service and the structure of industries. Relatively
small facilities with on-site additivemanufacturing capabilities could replace
large regional warehouses. The supply of service parts might even be
outsourced: small fabricators (or fabs) located, for example, at airports,
hospitals, or major manufacturing venues could make these parts for much of the
equipment used on site, with data supplied directly by the manufacturers.
Of course, retailers too could
someday use fabs—for example, to let customers tailor products such as toys or
building materials to suit their needs. That business model could represent a value-chain
play for manufacturers if, for instance, they owned the machines, core designs,
or both.
4.
New capabilities
Design is inherently linked to
methods of fabrication. Architects can’t design houses without considering
construction techniques, and engineers can’t design machines without
considering the benefits and limitations of casting, forging, milling, turning,
and welding. While there is a wealth of knowledge around design for
manufacturing, much less is available on design for printing. Our conversations
with executives at manufacturing companies suggest that many are aware of this
gap and scrambling to catalog their design know-how.
Getting the most out of
additive-manufacturing techniques also involves technical challenges, which
include setting environmental parameters to prevent shape distortion,
optimizing the speed of printing, and adjusting the properties of novel
materials. Indeed, tuning materials is quite a challenge. While plastics are
relatively straightforward to work with, metals are more difficult. Slurries
and gels (for example, living tissue or the material for printed zinc–air
batteries) are extremely difficult.
The most successful players will
understand these challenges. Some are already creating centers of excellence
and hiring engineers with strong experience in additive manufacturing.
5.
Disruptive competitors
Many benefits of 3-D printing could
cut the cost of market entry for new players: for example, the use of the
technology to lower tooling costs makes it cheaper to begin manufacturing, even
at low volumes, or to serve niche segments. The direct manufacturing of end
products greatly simplifies and reduces the work of a designer who would only
have to take products from the computer screen to commercial viability. New
businesses are already popping up to offer highly customized or collaboratively
designed products. Others act as platforms for the manufacture and distribution
of products designed and sold online by their customers. These businesses are
gaining insights into consumer tastes and building relationships that
established companies could struggle to match.
Initially, these new competitors
will be niche players, operating where consumers are willing to pay a premium
for a bespoke design, complex geometry, or rapid delivery. Over the longer
term, however, they could transform industries in unexpected ways, moving the
source of competitive advantage away from the ability to manufacture in high
volumes at low cost and toward other areas of the value chain, such as design
or even the ownership of customer networks. Moreover, the availability of
open-source designs for 3-D printed firearms shows how such technologies
By Daniel Cohen, Matthew Sargeant,
and Ken Somers
http://www.mckinsey.com/insights/manufacturing/3-d_printing_takes_shape?cid=manufacturing-eml-alt-mkq-mck-oth-1401.
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