ADDITIVE MANUFACTURING DEFINED

CAPITAL VS. SCALE: MINIMUM EFFICIENT SCALE SHAPES SUPPLY CHAINS

CAPITAL VS. SCOPE: ECONOMIES OF SCOPE INFLUENCE HOW AND WHAT PRODUCTS CAN BE MADE

PRACTICAL IMPLICATIONS OF AM-INDUCED SHIFTS IN SCALE AND SCOPE ECONOMIES

  • Path I:Companies will not seek radical alterations in either supply chains or products, but they may retain interest in exploring AM technologies to improve value delivery form current products within existing supply chains.
  • Path II:Companies take advantage of scale economics offered by AM as a potential enabler of supply chain transformation for the products they offer.
  • Path III:Companies take advantage of scope economics offered by AM technologies to achieve new levels of performance or innovation in the products they offer.
  • Path IV:Companies alter both supply chains and products in pursuit of new business models.

PERFORMANCE, INNOVATION, AND GROWTH: STRATEGIC IMPERATIVES FOR AM

ANALYZING THE TACTICAL APPROACHES TO VALUE DELIVERY WITH AM

If a company is trying to improve its competitiveness with little risk and limited change, AM can play an important role in addressing the speed and profitability of its current operational model.

PATH I: STASIS—A STARTING POINT FOR ADDITIVE MANUFACTURING

PATH II: SUPPLY CHAIN EVOLUTION—AM IN PURSUIT OF PERFORMANCE AND GROWTH

PATH III: PRODUCT EVOLUTION—AM IN PURSUIT OF PRODUCT INNOVATION

PATH IV: COMBINED SUPPLY CHAIN AND PRODUCT EVOLUTION—AM IN PURSUIT OF BUSINESS MODEL INNOVATION

While managers can expect the AM technology space to continue its rapid evolution, the industry dynamics we have identified will not change. Their direction seems set. As AM technologies advance and their costs fall, their impact on minimum efficient scale, and therefore the ability to proliferate production sites and alter supply chains, is likely to accelerate.

WHERE TO START

ENDNOTES

  1. See sidebar “Additive manufacturing defined,” p.6, for more information about the terms “additive manufacturing” and “3D printing.” Source for additive manufacturing definition is ASTM International,Standard Terminology for Additive Manufacturing Technologies. Designation: F2792–12a, 2013, p. 2.back ^
  2. The National Law Journal,Is intellectual property law ready for 3D printers? The distributed nature of additive manufacturing is likely to present a host of practical challenges for IP owners, February 4, 2013.back ^
  3. Kalpakjian, S., Schmid, S., Manufacturing Engineering and Technology (6th Ed.), Prentice Hall, (2010), p. 6.back ^
  4. Chandler, A.D., Scale and Scope: The Dynamics of Industrial Capitalism, Harvard University Press (1990).back ^
  5. See, for example, Allen, J. (2006) An Investigation into the Comparative Costs of Additive Manufacture vs. Machine from Solid for Aero Engine Parts. In Cost Effective Manufacture via Net-Shape Processing (pp. 17-1–17-10). Meeting Proceedings RTO-MP-AVT-139, Paper 17. Neuilly-sur-Seine, France: RTO. Available from:; Ruffo, M., Tuck, C. and Hague, R.J.M., 2006. “Cost estimation for rapid manufacturing—laser sintering production for low to medium volumes.” Proceedings of the Institution of Mechanical Engineers, Part B:Journal of Engineering Manufacture, 220(9), pp. 1417–1427; Atzeni, E. & Salmi, A. “Economics of additive manufacturing for end-usable metal parts,”International Journal of Advanced Manufacturing Technology, 62(2012), p. 1147–1155.back ^
  6. We note that some studies depict a high initial cost at low unit volumes in order to account for the initial cost of setup of the AM machine. See, for example, Ruffo, M., Tuck, C. and Hague, R.J.M., 2006. “Cost estimation for rapid manufacturing – laser sintering production for low to medium volumes.” Proceedings of the Institution of Mechanical Engineers, Part B: Journal of Engineering Manufacture, 220(9), pp. 1417–1427.back ^
  7. See endnote 5.back ^
  8. Baumers, M., Tuck C. , Wildman R., Ashcroft I. , Rosamond E. and Hague R., “Combined Build-Time, Energy Consumption and Cost Estimation for Direct Metal Laser Sintering.” From Proceedings of Twenty Third Annual International Solid Freeform Fabrication Symposium—An Additive Manufacturing Conference (2012): 13 pgs.back ^
  9. Chandler, A.D., Scale and Scope: The Dynamics of Industrial Capitalism, Harvard University Press (1990).back ^
  10. Namias, S, “Production and Operations Analysis” (3rd Ed), Irwin, 1997, p. 810.back ^
  11. Gibson, I., Rosen, D.W., & Stucker, B., Additive Manufacturing Technologies: Rapid Prototyping to Direct Digital Manufacturing, Springer (New York), 2010 p. 10.back ^
  12. LaMonica, M., “10 Breakthrough Technologies 2013: Additive Manufacturing,”MIT Technology Review, , posted April 23, 2013.back ^
  13. Ibid.back ^
  14. We argue “in many cases” because exceptions exist for items such as inserts and supports used during production.back ^
  15. To be sure, there are those that will argue AM technologies will be used in ways that we have yet to imagine. The veracity of this claim does little to alter what we can learn about the value and direction of AM from current applications.back ^
  16. In some cases, it can be argued that these applications exist on a spectrum. For example, at some point the ability to improve weight and part performance, an example of a path I objective, may transition to a more fundamental innovation in the component, migrating to path III. Our categorization, in particular, depends on an understanding of where to draw a distinction between whether AM provided capability pushes the company closer to the “state of the art” as it exists across all industries (performance), or whether it redefines the state of the art in general (innovation). Regardless of the distinction, we believe the analysis offers some valuable insights.back ^
  17. Wohlers, T., Wohlers Report 2012: Additive Manufacturing and 3D Printing State of the Industry (2012).back ^
  18. DesignNews, “Stereolithography expedites impeller design,” , accessed May 28, 2013.back ^
  19. Wohlers, T., Wohlers Report 2012: Additive Manufacturing and 3D Printing State of the Industry (2012).back ^
  20. Ibid.back ^
  21. See (accessed September 17, 2013) for jewelry assembly jig case study. Masking example is based on confidential client experience.back ^
  22. Kondor, S., Grant, G., Liacouras, P., Schmid, J., Parsons, M., Rastogi, V., Smith, L., Macy, B., Sabart, B., Macedonia, C., “On Demand Additive Manufacturing of a Basic Surgical Kit,”Journal of Medical Devices 7(3), 030916 (July 2013).back ^
  23. , accessed on September 16, 2013.back ^
  24. DesignNews, “Stereolithography expedites impeller design.”back ^
  25. , accessed September 16, 2013.back ^
  26. Salles, A.S., Gyi, D.E., The specification of personalized insoles using additive manufacturing,Work: A Journal of Prevention, Assessment & Rehabilitation41(2012), pp. 1771–1774.back ^
  27. , accessed September 16, 2013.back ^
  28. van Noort, R., “The future of dental devices is digital,”Dental Materials, 28(1), January 2012, pp. 3–12.back ^
  29. See, accessed September 17, 2013.back ^
  30. DesignNews, “Stereolithography expedites impeller design.”back ^