• by Jack Loechner , Staff Writer @mp_research, March 3, 2015

Though Research Briefs are typically selected for relevancy in marketing, merchandising and media, basic to the interests of these disciplines is a finished product. The technical aspects of the product are not only of particular interest for advertising positioning, but also in anticipation of future opportunities. Such is the case of 3D printing. There have been false dawns before, says the report, 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, says the report.

A McKinsey survey of leading manufacturers earlier this year, and reported by by Daniel Cohen, Katy George, and Colin Shaw, showed that 40% of the respondents were unfamiliar with additive-manufacturing technology “beyond press coverage.” An additional 12% indicated that they thought 3-D printing might be relevant but needed to learn more about it. 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.

3-D printing is set to become more relevant, noting these responses as a percentage of the manufacturing executives recently interviewed for the report:

• Highly relevant to me today (10%)
• Not highly relevant today, but will gain substantial relevance within next 3 years (33%)
• Might be relevant, but need to learn more about the technology (12%)
• Not relevant today and will not be in next three years (5%)

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, says the report. Sales of metal printers rose by 75% from 2012 to 2013. But expert consensus indicates that the market penetration is just a fraction (1 to 10%) of what it could be given the wide range of possible 3-D applications

10% of the executives in the 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, says the report, 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% of total printing costs. The materials used in the manufacturing process can account for 20 to 30% when using common materials such as aluminum, or 50 to 80% when printing with exotic materials such as titanium. Labor and energy make up the rest.

The study and 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% over a ten-year period, says the report. Early signs of these cost-shifting dynamics can be seen as one new Chinese entrant is already selling comparable selective plastic laser-sintering machines at a price 25 to 30% below that of a leading Western supplier. Asian players are offering technically comparable nylon powders at prices that are more than 30% lower than those of their Western rivals.

While there have been false expectations 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, opines the report.

Beyond the C-suite, companies should build a group of executive champions within the engineering, quality, operations, and procurement units, suggests the report. Some aerospace and medical-device companies, for example, already have teams scanning their entire design portfolios for parts that could benefit from this technology. The coming years will bring new opportunities and challenges, concludes the report, noting that 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.

Addendum:

• The technology known as 3D printing actually consists of a number of different methods of building an object layer by layer. Each method has its pros and cons.
• All 3D printing technologies have a common starting point: a CAD program that describes an object. This CAD program is then usually converted into a tessellation language (STL) file format. This file format is then fed into the 3D printers control, which takes the file and separates it into hundreds or thousands of “slices.”
• The control feeds the building data on each slice into the 3D printer, which then builds the object, layer by layer, based on this slice information. The thickness of these slices varies by 3D printing technology. Thicknesses average 0.1 mm, but can be thinner or thicker.
  • According to the ASTM Standard Terminology for Additive Manufacturing Technologies, laser sintering is defined as a “powder bed fusion process used to produce objects from powdered materials using one or more lasers to selectively fuse or melt the particles at the surface, layer by layer, in an enclosed chamber.”
  • The definition goes further to note that the term “sintering” … is a historical term and a misnomer, as the process typically involves full or partial melting, as opposed to traditional powdered metal sintering using a mold and heat and pressure.”

For additional information from McKInsey, please visit here.