Are you
ready for 3-D printing?
There have been false
dawns before, but this technology is poised to deliver cost benefits and to
advance innovation in manufacturing.
Systems for additive manufacturing, or 3-D printing as it’s
better known, represent just a fraction of the $70 billion traditional
machine-tool market worldwide. Yet given the likelihood that this technology will start
to realize its promise over the next five to ten years, many leading companies
seem surprisingly unaware of its potential—and poorly organized to reap the
benefits.
A McKinsey survey of leading manufacturers
earlier this year showed that 40 percent of the respondents were unfamiliar
with additive-manufacturing technology “beyond press coverage.” An additional
12 percent indicated that they thought 3-D printing might be relevant but
needed to learn more about it (Exhibit 1). Many also admitted that their
companies were ill prepared to undertake a cross-organizational effort to
identify the opportunities. Two-thirds said that their companies lacked a
formal, systematic way to catalog and prioritize emerging technologies in general.
The mass adoption of
3-D printing—the production of physical items layer by layer, in much the same
way an inkjet printer lays down ink—is probably years rather than months away.
The 3-D printer industry has enjoyed double-digit growth recently; sales of
metal printers, indeed, rose by 75 percent from 2012 to 2013. But expert
consensus indicates that the market penetration is just a fraction
(1 to 10 percent) of what it could be given the wide range of possible 3-D
applications
Ten percent of the executives in our survey
already find the technology “highly relevant.” They see 3-D printing’s ability
to increase geometric complexity and reduce time to market as the key business
benefits, closely followed by reduced tooling and assembly costs. Those who
expect to be among the next wave of users were much more likely to cite
reducing inventories of spare parts as one of the advantages. Additive
manufacturing, in short, seems set to change the way companies bring their
products to market and respond to customer needs. But predicting a “tipping
point” is difficult.
Much will depend on
when and how quickly overall printing costs fall, a development that should
narrow the still-yawning gap between the cost of new and traditional
manufacturing methods. In sintering-based 3-D printing technologies, for example, there are two major
expense categories. The machines and their maintenance typically account for 40
to 60 percent of total printing costs. The materials used in the manufacturing
process can account for 20 to 30 percent when using common materials such as
aluminum, or 50 to 80 percent when printing with exotic materials such as
titanium. Labor and energy make up the rest.
In all likelihood, prices for sintering-based
printers will remain steady or rise in the near term thanks to the introduction
of new technical features, such as enhanced automation. But patent expirations
and new entrants in Asia should apply downward pressure over the next ten
years. The cost of materials ought to drop in the long term as third-party
firms become credible alternative powder suppliers and as increased demand for
powder enhances scale efficiencies more generally. Throughput rates are
expected to increase on the back of growing laser power, higher numbers of
lasers, and better projection technology. All of that will serve to reduce
expensive machine time.
Our research on sintering-based printers
examined two possibilities. In the “base” scenario, costs remain largely at
their present level and companies come to understand the benefits of additive
manufacturing only gradually. In the “market shock” scenario, printing costs
fall precipitously—say, by 30 or even 50 percent over a ten-year period. Early
signs of these cost-shifting dynamics can be seen in plastic sintering. One new
Chinese entrant is already selling comparable selective laser-sintering
machines at a price 25 to 30 percent below that of a leading Western supplier.
Asian players are offering technically comparable nylon powders at prices that
are more than 30 percent lower than those of their Western rivals. Price undercutting
is less dramatic for nontraditional blends, such as carbon-filled powders used
in strong but lightweight parts (those in racing cars, for example).
While there have been false dawns before for
3-D printing as a whole, companies cannot afford to be complacent. That will be
especially true if the expected benefits to innovation are not only magnified
by cost reductions but also bring into scope whole new industries and product
categories. CEOs and COOs above all need to examine the readiness of their
companies for a future in which a range of integrated digital technologies (of
which 3-D could be one of the most significant) will dominate manufacturing and
competitors will probably be building additive manufacturing into their value
chains. That means focusing on better organizational cohesion and considering
partnerships with external organizations (such as local contract-printing
bureaus) that have the necessary technical expertise.
Beyond the C-suite, companies should build a
group of executive champions within the engineering, quality, operations, and
procurement units. Some aerospace and medical-device companies, for example,
already have teams scanning their entire design portfolios for parts that could
benefit from this technology. Furthermore, the introduction of 3-D printing
into complex manufacturing environments would require big changes in
quality-assurance and control processes: companies would have to replace old
protocols relying on extensive up-front testing and validation of traditional
production tools, such as molds. Since additive manufacturing reduces or even
eliminates the need for these tools, organizations must understand the steps
needed to satisfy their quality requirements in the future.
The coming years will bring new opportunities and challenges.
Companies with savvy executives who raise awareness, fill talent gaps, and
build the necessary organizational capabilities will be well positioned to
benefit from this breakthrough technology.
byDaniel Cohen, Katy George, and Colin Shaw
http://www.mckinsey.com/insights/manufacturing/are_you_ready_for_3-d_printing?cid=other-eml-alt-mkq-mck-oth-1502
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