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Making 3D printing work for you: Defining Business Models for Additive Manufacturing

July 26, 2016 • Business Process, Emerging Ideas, INNOVATION, OPERATION, Supply Chain

By Matthias Holweg, Kai Hoberg, Frits K. Pil, Jakob Heinen  

Companies struggle to define the value proposition 3D printing brings: While the opportunities for improving products are obvious, how to generate value from it is not. Firms need to first examine its potential and risks along three dimensions: product innovation, customisation, and complexity. Then they need to set clear boundaries for permissible customisation, and decide where to situate 3D printing within their organisation.

 

3D Printing: Opportunities and Challenges

Rapid prototyping technology, the ancestor to 3D printing,1 has been around for over two decades. One might rightfully ask whether there is any substance to the recent hype around this class of manufacturing technology.2 The answer is: Yes. We have reached a critical inflection point for 3D printing, and digital manufacturing more generally: The expiration of key patents (first for fused deposition modelling, and more recently selective laser sintering), has allowed a number of new entrants on the equipment side of the 3D printing sector, substantially increasing the level of competition and associated innovation. On-going reductions in cost for key inputs have further driven down the investment needed to incorporate 3D printing into a firm’s repertoire of activities. These reductions are enabled by lower costs for key equipment elements including fibre optics, lasers, and e-beam systems, as well as computing power and storage.

The technology has been lauded as a means to rethink design, digitise manufacturing, produce to demand, and customise products. Still, despite lofty claims as to the opportunities presented by the technology,3 penetration and use is still limited to certain industries and a relatively small number of applications. While the industries applying 3D printing are disparate, the factors driving the adoption and deployment of 3D printing are similar, as we found in our research with key actors along the complete 3D printing value chain – from raw material providers, to manufacturers, and logistics service providers.

The technology has been lauded as a means to rethink design, digitise manufacturing, produce to demand, and customise products.

We find that the core opportunities of 3D Printing emerge on three fronts: enhancing innovation in the design process as well as the actual design, embracing responsiveness and customisation, and mitigating operational complexity.



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