Additive Manufacturing

What Actual Benefi ts? How to Harness Them?

Additive Manufacturing / Introduction

Introduced as early as the 1990s to rapidly

manufacture industrial equipment, additive

manufacturing with industrial applications has

reached a maturity level sufficient for small- to

medium-batch productions. The basic principles

of this technology are now widely understood

and large industrial groups are frequently

publishing articles in professional journals

about experimental models and the occasional

operational success stories. But looking past

these publicity stunts, the heart of the matter is

that very few companies have actually introduced additive manufacturing in their production, because the benefits of the technique have not yet been clearly identified.

Nevertheless, industrial companies all need to

start exploring the potential of this innovative

new technology, which certainly qualifies as a

‘strategic’ opportunity, as defined by Geroski

and Marksides(1), because it represents a major

technological breakthrough, which could

dramatically impact both corporate processes

and talent strategies.

1. Markides, C.C. and Geroski, P.A., 2005, Fast Second: How Smart Companies Bypass Radical Innovation to Enter

and Dominate New Markets, London, Jossey-Bass Inc Pub.

2

Olivier is IAC’s expert on additive manufacturing.

He oversees projects to introduce this technology

in a variety of industrial sectors: aerospace and

defence, healthcare, rail transport, etc.

Olivier Saint-Esprit

Partnerolivier.saint-esprit@iac.fr+33 (0)6 28 72 07 67

Clients:

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Three Precautionary Measuresfor Exploring the Potential of Additive Manufacturing

Assessing Expected Benefits

The failure of mass-market 3D printing solutions

and the ensuing wave of companies going out of

business has provided a much-needed reminder

that investigating usages and added value of additive manufacturing is absolutely essential prior to making any investments.

In some companies, recreational plastic

printing machines are installed for employees

in so-called “creativity rooms”. Their productions

(mugs, figurines, etc.) are usually the reflect

of what little thought was given to the design

beforehand.

Getting Advice from SourcesOther than MachineAnd Powder Manufacturers

Because the actual benefits of additive

manufacturing are still unclear, most arguments

essentially rely on a technology-push effect: “Try

additive manufacturing because it’s innovative”.

This sales pitch is delivered by both machine

and powder suppliers, who go on about their

product’s performance without taking the time to explain how this innovative technology will create value for their clients.

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Protecting Your Product Portfolio

As opposed to so-called conventional

manufacturing technologies, additive

manufacturing processes on the market

today are not open-source, meaning that

the process and the material cannot be

dissociated. Machine manufacturers sell

their own, in-house technology, which uses

a specific powder no one else markets.

For unexperienced professionals, the risk

is to develop products that are entirely

dependent on a single supplier.

A threat that certainly has not gone

unnoticed by large corporations, who are

investing to develop their own processes,

and ideally researching compatible open-

source materials.

To avoid these pitfalls and take advantage

of all the benefits additive manufacturing

has to offer, one must question the value

this process creates for industrial activities.

For this purpose, companies need to

stop obsessing about the technology’s

performance and to focus instead on

methodically evaluating potential added

value for their own product portfolio.

After bringing to light the fact that the

benefits of additive manufacturing are

mainly indirect, we will present the three

main aspects on which this technology may

have a notable impact.

This paper will then focus on the different

approaches that can be used to identify

and harness those benefits for your

operations.

Lastly, we will outline the methodology

used by IAC to support our clients in

establishing their own roadmap to additive

manufacturing.

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With the current craze this new technology

is generating, publications on additive

manufacturing usually fall into one of two

categories:

• those announcing new, higher-performance

machines and processes, usually co-written by

machine manufacturers and powder suppliers;

• those describing technical feats achieved by

a handful of large corporations: for instance,

the indirect manufacturing of the moulds used

for Michelin’s new Cross Climate tyres, and

the production of large-dimension aluminium

antenna supports by Thales Alenia Space for

Koreasat 5A and 7.

These publications rarely address economic

considerations; and when they do, they generally

do so in vague terms, focusing instead on the

technology’s long-term potential. The majority

of industrial companies wishing to explore

the potential of this innovative technology

use the same approach: request a quotation

for an already existing part. But no matter

First Priority:Assess Your

Value Creation Potential

which process they are considering (metal,

plastic), the manufacturer’s answer is always

disappointing, with prices always exceeding

those of conventionally manufactured parts.

Today, unit manufacturing costs for additive

manufacturing are still superior to those for

conventional production processes; and will

probably continue to be so for a few more years.

When reasoning only in terms of production costs for parts intended to be manufactured conventionally, additive manufacturing is currently not a competitive solution.

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Competitiveness improvement projects recently

led by IAC have confirmed that this technology’s

benefits are mainly indirect, and have no impact

on production costs by current calculation

methods.

In the following pages, we will outline how

additive manufacturing is changing the industrial

paradigm of mass production, which generates

profits through scale, and whose performance

is almost exclusively measured by a product’s

recurring production cost.

The added value created by this process is

nevertheless significant, as illustrated by two

of IAC’s cases presented below.

Industrial companies recently counselled by IAC focus on the indirect benefits of additive manufacturing.

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Context

Development of medical equipment on a

very short time frame.

Significant investments urgently needed to

acquire aluminium pressure casting moulds.

Complicated relationship with the Asian

mould supplier.

Introducing Additive Manufacturing

A succession of prototypes were

produced for sand casting using additive

manufacturing.

These iterations provide the possibility to

adjust both the mould and the part jointly.

Prototype parts are exactly identical to

mass-produced parts, which was not the

case with traditional machining.

GO Hard tooling can be delayed and

certifi cation procedures can be initiated

sooner.

Two Practical CasesC

umul

ated

inve

stm

ent

(pro

toty

ping

+ p

rodu

ctio

n to

olin

g)

Time

Initial samples

Off tool

GO Hard tooling

Prototyping

Conventional processAdditive manufacturing

1

2

1 20% reduction of cumulated expenditures.

Improved time to market: • 1 month gained for fi rst mass-produced part • Certifi cation procedures initiated 1.5 months early

Reduced project risks: disputes with mould supplier, travel expenses to Asia to discuss changes in mould design, etc.

2

Context

High-precision titanium ammunition body.

Prior manufacturing process: shells and fi ns

are machined, then fi ns are welded onto shell.

A complex supply chain:

Supplier 1: machined shells

Supplier 2: machined fi ns

Supplier 3: welding and dimensional control

of fi nished product

Introducing Additive Manufacturing

The process delivers standard-compliant

parts with a 5% reduction of recurring costs.

-5%

Additivemanufacturing

Conventional manufacturing

Shell

Welding

Fins

The process led to two design optimizations:• Latticed walls: 30% mass reduction.

• Improved thermal decoupling: internal

heating signifi cantly reduced.

Two notable indirect benefi ts resulting from

this new process:

• No more pieces rejected due to shell

deformation incurred during the welding

process.

• Supply chain simplifi ed: one supplier

instead of three.

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Additive manufacturing directly impactsall ROCE-related factors, listed below genericallyfor all industry 4.0 technologies:

2. M. Blanchet, 2016, Industrie 4.0: Nouvelle donne industrielle, nouveau

modèle économique, Lignes de Repères

The two previous examples highlight the benefits

of additive manufacturing, and show that relying on

production cost analysis alone is not an effective

method to measure the added value of this new

process.

However, they are unique examples, which cannot

necessarily be transposed to other industrial

sectors, nor do they show the full scope of

potential benefits this technology has to offer.

In order to grasp all of these possibilities, business

leaders should use ROCE* — as proposed by Max

*ROCE (Return On Capital Employed) is a financial indicator, which compares the margin rate of a company with

the amount of capital invested to achieve that result. It is an accurate indicator of the company’s efficiency and

competitiveness.

ROCE may be split into 2 key ratios: profitability and capital turnover.

Blanchet in his book Industrie 4.0 — as their key

indicator.

Additive manufacturing isa formidable tool to increase ROCE, the only real competitiveness indicator for industrial companies.

ROCE Profitability

• Product personalization

• High-value added products

• Lower total production costs

• Negative complexity costs

(digitalization)

• Leaner flows, higher quality,

less rejected products

Economic factors in industry 4.0(2)

• Greater asset flexibility

• Complexity cost transferred

to digital innovation

• Better asset utilization (TRS)

• Reduced stocks

Capital turnover

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3 Major Typesof Benefits IdentifiableWhen Reviewing ROCE-Related Factors

Additive Manufacturing Increases Product Value: Optimized Designs, Higher Performance

Higher-performance products for customers:

lattice structures delivering higher mechanical

strength, reduced pressure losses for

channel networks too complex to make using

conventional processes, optimized heat transfer,

etc.

These improvements increase product value and

sometimes lead to innovations that would have

been impossible to make using conventional

technologies (for instance, Michelin’s Cross

Climate tyres).

Asset Turnover Can Also Be Optimized Dramatically with Additive Manufacturing

In addition to indirect equipment manufacturing,

additive manufacturing also offers a wide range

of opportunities to cut down ‘hidden’ indirect costs.

• Stock optimization as a result of on-demand

production.

• Stocks of physical parts intended for

maintenance replaced by digital models

printable on demand.

• Reduced non-quality rate for complex multi-

process parts, involving several employers:

- overall lead-time optimization;

- smaller number of suppliers, resulting in

streamlined logistics, lesser risks of disputes

and lower transport costs;

- no more special processes, too limiting;

- lower product rejection rate.

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Additive Manufacturing OpensNew Business Opportunities:Reaching Smaller Markets,Expanding Product Portfoliosin a Cost-Effective Way

Additive manufacturing offers the chance to

no longer depend on expensive custom-made

equipment such as injection moulds, and

guarantees products identical to their mass-

produced equivalents.

Thus, it provides a way to lower fixed development costs for new products, and contributes to reducing a project’s time to break-even point, while minimizing financial commitment and risk

levels.

As a result, it opens new long-term and short-lived

market opportunities, and the possibility to develop

product portfolios in a cost-effective way.

When implemented optimally, the process

gives companies the possibility to offer product

personalization based on platform manufacturing:

a cost-effective platform is manufactured using

conventional processes, and personalized parts

are manufactured additively.

This new process challenges the pursuit of large

cost-effective batches, the basic principle

underpinning mass production, which requires

targeting solely large-scale markets.

.

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Identifying Potential Benefitsfor Your Operations

Product Value Approach:Optimized Design, Higher Performance

Unsurprisingly, the best method for this approach

is functional analysis, which provides a way to

identify:

• functions bundled into a single component

• improvement opportunities on the product’s key

specifications (mechanical strength, thermal

resistance, etc.), which can be achieved using

topology optimization, as well as lattice structures.

As previously outlined, the actual benefits of

additive manufacturing are not evident when

requesting quotations for existing parts designed

for conventional manufacturing processes.

Therefore, industrial manufacturers should follow three complementary approaches, together with the relevant associated tools:

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Engine part with lattice structure manufactured by EBM using Ti6A14V to reduce engine weight and increase

robustness(3).

Market Approach

Industrial companies need to invest resources

to identify which new markets can be captured

and in which directions they should expand their

product portfolios to maximize profitability.

In order to reveal these opportunities, the

following two methods could prove helpful when

used jointly:

• a discovery matrix, a double-entry table used

to cross-check two types of information.

Empty cells show ‘innovation windows’ — where

research efforts should be allocated.

• a blue ocean strategy(4), i.e. removing oneself

from a highly competitive environment by

pursuing innovation and originality, in order to

reach new competition-free markets

Capital Turnover Approach

Possible optimizations revealed by this

approach will mostly be invisible for clients.

However, they are of paramount importance

for industrial companies. Improving capital

turnover automatically leads to an increase of

the company’s operational performance, which

translates to a greater capacity to initiate new

projects.

Methods to use for this approach are:

• Product life cycle analysis, especially during

the development and prototyping phases to

deliver improved time to market and minimize

investments.

• Analysis and optimization of financial indicators:- stock volume and turnover rate;

- extraordinary transport costs — for instance,

emergency plane deliveries;

- disposal of components due to new product

specifications;

- cost of allocating employees to the support of

LCC suppliers and non-quality control.

3. M.C. Leu, N. GUO, 2013, Additive manufacturing: technology, applications and research needs, Front Mech

Eng, 8(3): 215-243.

4. W. Chan Kim, R. Mauborgne, 2005, Blue Ocean Strategy, Harvard Business School Press.

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Identify benefits in all three categories

Product designoptimized design,higher performance

Initiate POCs* to assess the potential of innovative designs and acquire knowledge of the additive manufacturing ecosystem.

New range of higher-performance products.

Teach new skills needed and implement necessary organizational changes.

Broader product offeringNew markets reachedNew business models

Identify quick win opportunities to fund future projects and promote the benefits of additive manufacturing in house.

Define new business opportunities and build the resulting business plan.

Short-term Mid-term

Operational efficiencyImproved capital turnover

New marketsBroader offering and new markets

Build and roll out the additive manufacturing roadmap01 02

(*) Proof of Concept

IAC Methodology:Two Steps to Identify and Quantify Opportunities

Relying on a clear roadmap for implementing additive manufacturing contributes to the formal definition of short- and mid-term objectives for each of the three approaches described above.

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Phase 1 is dedicated to the identification and assessment of potential benefits, and typically lasts

3 to 4 months.

Lasting approximately 6 months, phase 2 aims at producing a clear roadmap and defining short- and mid-term objectives. Quick win savings due to

increased operational efficiency provide tangible

results to communicate on the benefits of the

technology and to initiate an innovative design

process with confidence.

Considering additive manufacturing from the perspective of added value, this two-step methodology yields very tangible results.

It provides an effective way to minimize concerns about the major strategic shift brought on by the generalization of this revolutionary new manufacturing process.

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