28 Feb 2017

The economic purpose of 3D-printing

Arvid writes*

The new gimmick in the world of technology is 3D-printing, with Ikea style printing kits already available for around 500 euro’s at an internet store near you. However, 3D-printing is no longer just a technological gimmick that is getting lab nerds very excited, it already has a place in the modern manufacturing process. It even has a fancy name (Additive Manufacturing, or AM) to show the world it is here to stay, and take an important role in our world. But what are the benefits and cost to additive manufacturing, and what role does it play in our current production process and economy of scale? Well, the answer is in the name.

AM differs from traditional manufacturing because unlike its traditional counterpart which subtracts material to build the final product – for instance you saw wood to build a table – AM is a process of joining materials layer upon layer to make objects from a 3D model data. The consequence of this production technique is that it has the potential to be on par with conventional production processes within a certain production limit. According to this study [pdf], it is estimated that AM is useful for producing below 14,000 units, or regarding small electrical components up to 121,000 units.

This is possible because the ‘tooling cost’ with AM is zero or close to zero. An example of tooling cost is making the mold for a certain product. The time to make the tooling is much longer than simply printing a product, while the actual production time for each unit is longer than in traditional manufacturing. The direct costs with AM are therefore mostly machine costs, material cost, and production speed. While the economic benefits of 3D printing are; less waste, no tooling costs, smaller production runs and large scale customization, with each product capable of being custom made.

For a more detailed look at the costs and benefits look at this paper by Nourredine and Meshari [pdf].

AM has grown rapidly the last couple of years, and has moved out of its traditional stomping ground of rapid prototyping to end-product manufacturing. According to this Deloitte study AM has grown from a 19 percent share in end-product manufacturing in 2011 to a 28,3 percent share in 2012 and is likely to continue this upward trend. The strength of AM lies in the niche of customizability and the cost benefit of low to medium scale production. With technological advances that make 3D Printing more reliable and cost effective in the future, and the addition of other large players such as Hewlett Packard (HP), we can expect AM to increase productivity and decrease material waste even more.

Bottom Line: Additive Manufacturing has several benefits compared to traditional manufacturing including reduced waste of raw material, and less direct cost with low to medium scale production. Additive Manufacturing has an economic purpose in in large scale customization and the production of intricate, and difficult to make products for traditional production processes.

* Please comment on these posts from my environmental economics students, to help them with unclear analysis, alternative perspectives, better data, etc.

1 comment:

Anonymous said...

Hi Arvid!

Thank you for your post :)

Firstly, I really liked that you chose to write about the economic productivity aspect of 3D printing, which is not usually mentioned in newspaper articles or avenue's like these. Just like your post, it is exciting that this technological development will occur more in our daily lives in a short period of time.
On the other hand; you used data from 2011 and 2012 about AM's increasing share, which was not bad since your point was to show the dramatic increase within a year. It might be a better idea to use newer data since it is a ongoing development for which the whole world is excited to follow :)


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