3D Printing why it isnt (only) a hype

Posted on July 22, 2013 In five years people might accuse me of contributing to a bubble related to 3D Printing ( !edish 3D printer manufacturer "rcam#s stoc$ is already trading at P%& '3, !hereas the "merican firm 3D ystems# P%& is above 100()* +aving spent my first !ee$ at the ,niversity of -ambridge and the Institute for .anufacturing (If.) researching the topic, it is difficult not to be e/cited about its potential* 0hile I !ill return to this sub1ect !ith solid data and hopefully a more complete picture, let me share some initial thoughts belo!*

Fig: As indicated in the graph above, interest in the term 3D Printing has increased dramatically over the past 3 years.

What is 3D Printing? 2he term 3D Printing is some!hat perple/ing as our understanding of printing has been associated !ith creating a pattern on a sheet of paper* "dditive manufacturing is fre3uently used as a synonym and it is perhaps easier to ma$e sense of the technology by using this notion instead* "dditive manufacturing can be thought of as the opposite of subtractive manufacturing* o !hat is subtractive manufacturing then4 +istorically, manufacturing has largely been based upon a set of inputs !hich undergo a process of reduction 5 material is removed from the inputs by casting, machining and milling (etc) them into a desired shape* "dditive manufacturing, on the other hand, is not based upon the removal of material* Instead, a three dimensional -"D file (a digital dra!ing of a component) is used as instruction telling a 3D printer ho! to manufacture an ob1ect* ,sing a mi/ of inputs, the printer then builds the ob1ect

gradually, layer by layer until the it is ready* .aterial is not removed 5 material is added* "nyone !ith access to a -"D file and the right 3D printer can therefore manufacture something* 6efore 3D Printing, !e never used the term subtractive manufacturing, it !asn#t needed as all manufacturing !as subtractive* 0ell it isn#t any longer* 0hy then is this such a radical innovation and !hat are the potential implications4 1. The end of economies of scale? 2he concept of economies of scale is about as old as industrial capitalism itself* In economics a distinction is made bet!een fi/ed costs (e*g* an assembly line) and variable costs (inputs such as natural resources and labor)* "s volumes increase in a (subtractive) manufacturing process, the cost for each unit of output decreases since the fi/ed cost can be spread across more units* 2his is demonstrated in the graph belo!7

Fig

Additive manufacturing, on the other hand, implies that economies of scale become much less important. The first unit will be as expensive or cheap as the tenth or the

hundredth one. In the case when you own a 3 printer, it can still be regarded as a fixed cost, but in this case it is significantly smaller. The unit cost curve for 3 printing therefore becomes something li!e this:

Fig 3" #utting those two curves in the same graph gives us an idea about how they are different.

Fig 2. Variation is no longer expensive! The industrial revolution was highly related to economies of scale. $y building huge factories and introducing process innovations such as the assembly line, the cost per unit decreased. %hat used to be affordable only for wealthy people &uic!ly became within reach for everybody and we saw the emergence of a consumption society of abundance. 'ars, food and clothes became available in ever larger &uantities and lower prices. (p until the ")*+s, this was largely the growth miracle of industrial capitalism. The graph below serves as a neat illustration.

8ig7 The introduction of industrialized agriculture created huge economies of scale and prices declined sharply. 0ith economies of scale, ho!ever, came a seemingly inevitable tradeoff in all manufacturing bet!een variation and cost* If you !anted to increase variation, output !ould also by necessity be more e/pensive as less scale economies !ould be obtained* +enry 8ord summari9ed this dilemma elo3uently !hen he stated that 8ord#s customers could have any color they !ished as long as the car !as blac$* :ver the years, e/tensive !or$ has been done in operations management to cope !ith this tradeoff and doing so has proven to be a $ey source of competitive advantage in many industries* 0or$ing !ith platforms and modulari9ation, firms such as ;ol$s!agen and the !edish truc$ manufacturer cania have been able to offer a higher degree of variation !hile still reaping the cost benefits related to economies of scale* :ther firms li$e <. have struggled to position themselves in this tradeoff* "s the company sought to lo!er its cost, the car portfolio became increasingly streamlined, implying that variation declined and that brands lost their uni3ue identities*

0hile huge improvements have been made since +enry 8ord#s days, the tradeoff bet!een variation and cost remains largely intact 5 essentially !e#ve only learnt to cope !ith it in better !ays, but it is in many regards inherent in industrial capitalism itself (figure belo!)*

3D Printing is uni3ue in that there is no longer a tradeoff bet!een cost and variation 5 none at all= >ou first print one -"D file and then you can print another file that is completely different, or revise the first file and print it again* ;ariation does not result in additional costs on behalf of the manufacturer7

If we put the two curves above in the same graph, we get a better idea about how 3 printing is currently emerging.

3 printing is being rapidly adopted in those applications where the need for variation is very high, but has been too costly to accomplish through subtractive manufacturing techni&ues. ,ore than "+ million hearing aids have already been manufactured using 3 printers. ental and medical implants are other early adopters of the technology as personali-ation can be accomplished at a low cost. The argument outlined above is perhaps the main reason why I believe 3 printing is a truly radical innovation. Fundamentally, the technology is a serious attempt to overcome one of the greatest tradeoffs in industrial capitalism. ./0, a 1erman manufacturer states on their website that economies of scale are fading. I put this statement next to a 2+3 bill below which features Adam 0mith, arguably the founder of modern economics who among other things pointed at economies of scale as a distinct characteristic of the industrial revolution. The point is that 3 printing has the potential to distort a !ey feature of industriali-ed economies.

3. eometrical comple!ity is no longer a challenge "s 3D printing is additive, it becomes much easier and cheaper to manufacture things !hich are geometrically comple/* ubtractive manufacturing is inherently clumsy and some shapes are

more or less impossible (or very e/pensive) to manufacture through techni3ues of milling, machining or casting* "gain, there is no such tradeoff !ith 3D printing* -onse3uently, 3D printing is being adopted rapidly in applications !here geometrically comple/ components are needed* 2he aerospace industry !ould be one e/ample of this* ?educed !eight creates huge savings in fuel costs over the lifetime of an aircraft, by using 3D printing it becomes possible to create components that are lighter yet solve the same problem* "ccording to 2erry 0ohlers, an e/pert on the 3D printing industry, 6oeing is currently using 3D printed parts on some of their military aircrafts* ". Prod#ct de$elopment %ecomes contin#o#s and distri%#ted? ?apid prototyping !as one of the earliest applications of 3D printing technology* In development !or$, engineers could 3uic$ly and iteratively obtain physical versions of their ideas at little cost* "s the performance of 3D printers has improved, they are increasingly being used not only for prototyping but for real products* ince manufacturing is no longer a difficulty and since it can be done by anyone !ith access to a 3D printer, development !or$ becomes separated from manufacturing* In most industrial corporations, there#s a clash bet!een ?@D and operations* .anufacturing has historically imposed constraints on development !or$, !ith 3D printing this is no longer the case in certain applications* :ne conse3uence of the above is that product development can become continuous and distributed* 2raditional ?@D !or$ comes in a batch* "n idea moves from concept phases through product development and is then scaled up, manufactured and launched* 2he pro1ect had a starting time and an end* &ventually the product !ill become obsolete in the mar$etplace and the firm needs to have a ne! batch of development pro1ects resulting in ne!, better generations of products* 6asically, product lifecycles come and go* 0ith 3D printing, development ta$es place in the nonAphysical domain (in -"D soft!are) and manufacturing is not a challenge* +ence, development !or$ doesn#t have to be organi9ed as a batch, it has the potential of becoming a continuous process* 2hat is, you don#t develop a product and sell one million units of it, then launch a ne! product* Instead, you develop one product, someone buys it, the same -"D file is improved, another person buys t!o units, then the ne/t person buys a couple of units !hich are different from the first version* "s the ancient <ree$ philosopher +eraclitus put it7 no man ever steps in the same river twice, for its not the same river and hes not the same man* econdly, assuming production is the same and that it re3uires nothing but access to a 3D printer, development !or$ can become distributed in space* I can !or$ on the design of a product, send it over to someone on the other side of the planet !ho then develops it further, 1ust li$e a !ord document* .anufacturing is not a concern as !e have access to the same 3D printing technology, !hich is not constrained by economies of scale or geometrical comple/ity* -ontinuous and Distributed* 2hat#s 0i$ipedia compared to 6ritannica* In the printed era, encyclopedias came as a batch (an edition) and they !ere developed by one organi9ation* 6eing

only one organi9ation imposed constraints on the 3uality of the content and improvements couldn#t be made until the ne/t edition (batch) !ould be released many years later* 8or these reasons, 0i$ipedia !as bound to outperform printed encyclopedias over time 5 one organi9ation could not compete !ith the accumulated $no!ledge of millions of individuals and it couldn#t match the continuous updating 0i$ipedia offered* 0ill the same thing happen !ith product development !or$ than$s to 3D printing4 0ell it is already happening, to an e/tent* <rabcad is an online community !here over B20 000 members share and coAdevelop various designs, and there are many other e/amples of such !ebsites* 2he 0i$ipedia analogy above imposes at least three 3uestions7 1. Which manufacturers will end up li e !ritannica with obsolete products due to the wea nesses of having a centralized, batch style development process" #. $ow can companies successfully leverage online communities to ma e improvements to their products" %. &f manufacturing becomes democratized and available to anyone and it becomes easy to access '() files online, how do firms ensure any returns from their development efforts"

&. Time and space no longer an iss#e? ubtractive manufacturing re3uires a fair bit of s$ills in logistics and supply chain management* Industrial firms have developed very precise channels ma$ing sure the right inputs are available at the right place, at the right time* .anaging inventories, lead times, process times etc is by no means a trivial tas$* 0ith 3D printing, it becomes a lot easier to cope !ith time and space* 8iles can be sent electronically to one place !here an ob1ect is printed !hen it is needed, the only re3uired logistics !ould be related to the input material and the printer itself in the first place* 2he right thing, at the right time, !ithout all the comple/ities related to transportation of components and inputs bac$ and forth across the planet* 0hen it comes to literature, the only t!o actors needed are the author and the reader* "ll other actors (publishers, distributors, boo$stores, !ebsites) are intermediaries and several of them are being gradually removed as fe!er are re3uired !hen physical distribution is not necessary* What will happen to logistics companies and those firms obtaining a competitive advantage from superior supply chain management s ills in those applications where %) *rinting prospers"

'. (ed#ced waste " si/th advantage !ith additive manufacturing is related to !aste* ubtractive manufacturing removes material, !hich often becomes useless* 2his is not only costly for a firm, it is ultimately also a drag on the environment* 0ith additive manufacturing, you only use the resources needed to create a particular product* 3D printing !ill therefore be competitive in those applications !here !aste from subtractive manufacturing is highly e/pensive* )#rrent limitations of 3D printing +aving pointed out !hy additive manufacturing is uni3ue and hinted briefly at its disruptive characteristics, some of the current limitations should also be mentioned7 C "ffordability7 Prices for commercial 3D printers range from D1E,000 to more than D300,000* C "vailable materials7 2he amount of materials that can be used is still a limiting factor* Plastics, ceramics and certain metals are among the materials that can be used at present* "lso, material costs are 3uite high and still impose constraints* C Precision7 the robot arm of a 3D printer is still not as precise as an industrial engineering process, especially !hen it comes to adding several thin layers of different materials* C trength7 especially in loadAbearing applications, strength is still an issue* C 2ime7 &specially for larger ob1ects, it might ta$e a lot of time to print something*

"s !e#re dealing !ith three dimensions, all input costs increase e/ponentially by the po!er of three !hen you create a larger ob1ect* If you have a 3F3F3cm toy it re3uires 2B cmG3 of material and time* "n ob1ect t!ice as large needs 'F'F' H 21' cmG3 of material and time* 21'%2B H I, if you double the si9e, cost increases by a factor I= "nd if you triple the si9e it !ill increase by a factor 2B* 2his is an inherent !ea$ness in the technology and it helps us e/plain !hy it has initially emerged in rather small applications !here the buyer is not very price sensitive, and !here geometrical comple/ity and%or customi9ation is important* +earing aids are indeed good illustrations of this point* *mpro$ements will accelerate in the coming years +aving mentioned some of the limitations, the crucial 3uestion is if those technological obstacles !ill be overcome and !hen this !ould happen* "t present, it seems that the technology is improving rapidly* ome of the leading manufacturers are gaining momentum, leaving the red numbers behind* "s these companies gro! they !ill invest progressively more in ?@D !hile also attracting ne! firms to the industry, both factors contributing to increased performance and more !idespread adoption* Improvements have indeed been very rapid in recent years* Jo!adays the cheapest personal 3D printer sells for DE00, five years ago you couldn#t find any 3D printers belo! D1E 000* 0e can also e/pect the amount of available materials to increase in the coming years* 2he mar$et is e/pected to e/pand from D1*K billion in 2011 to about D3 billion in 201'* 6earing current limitations in mind, 3D printing !ill probably continue to gro! in its current application areas7 prototyping, and manufacturing (primarily in aerospace, automotive and medical industries)* 0hether it !ill remain in these areas or have a more !idespread impact across the economy ultimately depends on the pace of development and the limitations of the technology* In the short term, !e tend to overestimate the potential of a technology* Its long term impact, on the other hand, !e often underestimate* Digital photography !as hyped already bac$ in the early 1LI0s* Jothing happened over the coming t!enty years* 6ut once the shift oo$ place it e/ceeded our imagination, for all actors involved7 film manufacturers !ent bust, and so did many camera manufacturers, the industry became highly competitive, photography !as amateuri9ed putting an entire profession under pressure, camera stores and photographic stores !ent out of business and images are no! captured and shared instantly in !ays that !ould have been hard to even conceive of 20 years ago* hort term hype, long term impact beyond our e/pectations 5 this is usually the pattern for ne! technology* 0hy !ould 3D printing be an e/ception4 It has so many ne! and radically different properties that may have far reaching conse3uences, no! the 3uestions are ho! and !hen*