As the capabilities of 3-D printing hardware evolve, larger components and greater precision, coupled with higher speeds and lower costs are now possible. Together, these advances have brought the technology to a tipping point—it appears ready to emerge from its niche status and become a viable alternative to conventional manufacturing processes in an increasing number of applications.
McKinsey’s latest manufacturing white paper states that additive technology will help companies improve the productivity of materials by eliminating the waste that accrues in traditional (subtractive) manufacturing and would thus spur the formation of a beneficial circular economy. The economic implications of 3-D printing are significant: McKinsey research suggests that additive technology could have an impact of up to $550 billion a year by 2025.
The authors point to five disruptions companies and their leaders should prepare for:
1. Accelerated product-development cycles
Time reduction in product development will increase. In some cases, times will decrease from days or weeks to a matter of hours, now that many industries are poised for a second wave of acceleration as the line between additive and conventional manufacturing blurs.
For example, prototypes will get into the hands of customers faster, for quicker and more detailed feedback. We’ll see a broader use of materials, such as elastomers, that help customers envision the final product. Companies could even go into production using 3-D printed parts and start selling products while the traditional production tools were still being manufactured or before the decision to produce them had been made. Over time, 3-D printing will begin to affect how companies think about R&D more broadly, given how the technology enhances the ability to crowdsource ideas through remote cooperation. For some companies, that crowdsourced brainpower might one day begin supplanting R&D activities, making its management a new priority.
2. New manufacturing strategies and footprints
As of 2011, only about 25 percent of the additive-manufacturing market involved the direct manufacture of end products. With a 60 percent annual growth rate, however, that is the industry’s fastest-growing segment. As costs continue to fall and the capabilities of 3-D printers increase, the range of parts that can be economically manufactured using additive techniques will broaden dramatically. Boeing, for example, already uses printers to make some 200 part numbers for ten different types of aircraft, and medical-products companies are using them to create offerings such as hip replacements.
Nonetheless, not every component will be a candidate for the technology and reap its benefits (cost reductions, performance improvements, or both). Companies should understand the characteristics that help determine which ones are. These include components with a high labor-cost element (such as time-consuming assembly and secondary machining processes), complex tooling requirements or relatively low volumes (and thus high tooling costs), or high obsolescence or scrap rates. Forward-looking manufacturers are already investigating ways of triaging their existing parts inventories to determine which hold the most potential.
3. Shifting sources of profit
Additive-manufacturing technologies could alter the way companies add value to their products and services. 3-D printing techniques will reduce the cost and complexity of other kinds of production and force companies to differentiate their products in other ways. These could include everything from making products more easily reparable (and thus longer lived) to creating personalized designs.
Indeed, reducing the reliance on hard tooling (which facilitates the manufacture of thousands of identical items) creates an opportunity to offer customized or bespoke designs at lower cost—and to a far broader range of customers. The additive manufacture of individualized orthodontic braces is just one example of the potential of these technologies. As more such offerings become technically viable, companies will have to determine which are sufficiently appealing and commercially worthwhile. The combination of mass customization and new design possibilities will up the ante for many companies and could prove very disruptive to traditional players in some segments.
4. New capabilities
Design is inherently linked to methods of fabrication. Architects can’t design houses without considering construction techniques, and engineers can’t design machines without considering the benefits and limitations of casting, forging, milling, turning and welding. While there is a wealth of knowledge around design for manufacturing, much less is available on design for printing.
McKinsey’s researchers say getting the most out of additive-manufacturing techniques also involves technical challenges, which include setting environmental parameters to prevent shape distortion, optimizing the speed of printing and adjusting the properties of novel materials.
5. Disruptive competitors
Many benefits of 3-D printing could cut the cost of market entry for new players: for example, the use of the technology to lower tooling costs makes it cheaper to begin manufacturing, even at low volumes, or to serve niche segments. The direct manufacturing of end products greatly simplifies and reduces the work of a designer who would only have to take products from the computer screen to commercial viability. New businesses are already popping up to offer highly customized or collaboratively designed products. Others act as platforms for the manufacture and distribution of products designed and sold online by their customers. These businesses are gaining insights into consumer tastes and building relationships that established companies could struggle to match.
Initially, argue the McKinsey consultants, these new competitors will be niche players, operating where consumers are willing to pay a premium for a bespoke design, complex geometry, or rapid delivery. Over the longer term, however, they could transform industries in unexpected ways, moving the source of competitive advantage away from the ability to manufacture in high volumes at low cost and toward other areas of the value chain, such as design or even the ownership of customer networks. Moreover, the availability of open-source designs for 3-D printed firearms shows how such technologies have the potential to create ethical and regulatory dilemmas and to disrupt industries.
CEOs may be interested in connecting with a dynamic group of manufacturing CEOs including Caterpillar’s Doug Oberhelman, the National Association of Manufacturers (NAM) president Jay Timmons and other experts at The Smart Manufacturing Summit II to be held in partnership with Caterpillar in Peoria,IL on May 20 & 21. This extraordinary event, which includes an exclusive tour of one of Caterpillar’s manufacturing plants, brings together the thinkers and doers who are forging American manufacturing’s comeback story. (See 2014 Smart Manufacturing Summit Agenda)