Additive Manufacturing Industry Report

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Insights on Additive Manufacturing: Value, Volume and Reshoring

By Jennifer Johns Department of Management University of Bristol


Insights on Additive Manufacturing: Value, Volume and Reshoring

Contents Introduction

1

Method

2

Existing Academic Work

4

Findings

5

01 AM and Manufacturing Value Chains

6

1.1

AM value chain 7

1.2

AM impact on manufacturing value chains 10

02 Prototyping to Volume Manufacturing

13

03 Geographies of Production

18

Conclusions

23

References

24

Acknowledgements: The author acknowledges the contribution of the British Academy (award number SG162550) and thanks all participants in the research, especially those who gave their time and expertise through interview. Cover images are from a wide variety of sources and do not indicate who participated in the research. Top left: Post processed parts – courtesy of AMTechnologies Bottom left: Build chamber – courtesy of Renishaw Right: Electron beam powder bed AM – courtesy of TWI Ltd


Insights on Additive Manufacturing: Value, Volume and Reshoring

Introduction Over recent years there has been consistent media and industry interest in additive manufacturing (AM), fuelled by reports of high growth rates and publicity around exciting new applications. This report presents findings from an in-depth qualitative study of AM that sought to collate and interrogate the opinions of those within the industry regarding the big questions surrounding AM today.

AM is having an impact on manufacturing in general (albeit unevenly, as this report will argue). It is also expected to play a significant role in Industry 4.0 and the Factory of the Future, due in part to the expectation of politicians and policy makers in many nations that AM can relocalise production. The world’s leaders are pinning their hopes for economic growth on technological leaps, of which AM is expected to be one. For more on this see my article in Metal AM1. It also means that AM is intimately linked to ongoing debates around the reshoring of manufacturing, driven by political demands for ‘self-sufficiency’ (whatever that means in our highly integrated global economy) and growing awareness of the vulnerabilities and costs associated with

fragmented and/or geographically extensive supply chains. The external perspective on AM is obscured by association with the broader concept of 3D printing and much policymaking and academic research conflates the Maker Movement, Makerspaces and domestic 3D printing with industrial additive manufacturing. In consequence, there is a perception gap between the generalised view of 3D printing as a futuristic enabler of social and technological revolution and the contemporary realities of additive manufacturing, particularly in the industrial setting. The diversity of different technologies, materials and applications of AM is not widely acknowledged. Nor is the scope of AM production in

manufacturing (either as prototyping or in production) widely understood. Instead, in the public and often policy-making imaginary, 3D printing is included as part of a vaguely understood part of Industry 4.0 and the ‘Factory of the Future’. As a consequence, the value and future trajectory of AM is bound up with narratives of all different kinds of technological progress, including AI and big data. This report offers some insights into several questions around additive manufacturing, drawing on knowledges rooted in social science to offer informed observations from a broader, and non-technical, perspective.

A

Omron, PR020

There are two concurrent stories to tell about AM. First, the development of the AM sector itself – a high-technology industry with its own developmental trajectory, needs and aspirations. Second, the broader context in which AM is situated.

Image A: Innovation is a key focus of Industry 4.0.

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Insights on Additive Manufacturing: Value, Volume and Reshoring

Method Four key research questions underpinned the project methodology, based on interrogation of the existing academic work and popular media literature. This exposed the myths that perpetuate around 3D printing.

To answer the research questions a qualitative methodology was developed. At present there is little reliable public quantitative data. The Wohlers Report has been used to gain an initial insight into the size, scope and growth of the AM sector, but many interviewees expressed concerns about the reliability of the data for a number of reasons. The lack of availability of data on AM reflects the way in which the industry has emerged and evolved over recent decades – the dominance of patents and IP protection, the lack of collaboration between machine OEMs, sensitivities around revealing installation bases (for commercial reasons and often due to NDAs with customers) and the lack of a universal body to encourage

Jennifer Johns

B

Image B: Formnext, Germany 2018.

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the collection, anonymisation and dissemination of data. Given limited data, a qualitative methodology was designed using three case study countries – the US, UK and Germany. These countries were chosen based on their leading roles in the AM sector based on my initial review of the industry using secondary sources such as industry reports and academic publications. Semi-structured interviews were conducted with senior management (owners, CEOs, CTOs etc) with additive manufacturing firms. This included the machine manufacturers, service bureaus, suppliers of inputs such as materials, software, measurement equipment, manufacturing firms using AM and institutions such as research institutes, government departments responsible for standards and policymaking. Questions focused on gaining an understanding of the activities of the firm or institution, concentrating on the broader change dynamics of the sector. The questions allowed for interviewees to offer their own insights and opinions. Firm selection was based on a snowballing approach. Academic contacts

provided a handful of entry-points to the industry, but beyond this my approaches were via attendance at industry events (Knowledge Transfer Network, Formnext, AMUG etc), and on the suggestion of previous interviewees. Over 200 firms were contacted requesting an interview. Many declined, reflecting time pressures and/or perhaps an unwillingness to engage with a social scientist given this is still an unusual request. The author is grateful to those individuals who participated. In the majority of cases interviews were conducted at the firm’s location, typically at AM facilities. The research was conducted between September 2017 and July 2019. In total 53 interviews were conducted across the three case study countries. Due to ease of travel and greater network connections, most interviews were conducted in the UK. See Table 1 for a breakdown of interviews by type and country. All interviews have been anonymised and identifying information removed. The research project received ethical approval from both my employer institutions (the University of Liverpool then the


Insights on Additive Manufacturing: Value, Volume and Reshoring

Project research questions:

1. W hat are the constituent parts of the AM industry and how do those parts fit together and interact? This allows for the charting of the AM global value chain. 2. T o what degree can we observe a shift from prototyping to functional, volume manufacturing? This addresses the application of AM in manufacturing in general and considers a range of application types.

3. What are the business models underpinning the use of AM? This interrogates some of the assumptions made about what conditions AM is applicable and the degree to which it makes business sense to be applied and takes into account some of the concerns around unrealistic promotional applications.

4. To what degree is the use of AM changing the geographies of production? Primarily focused on international supply chains, the question engages with the rhetoric around AM leading to reshoring of manufacturing back to Western Europe and North America.

The initial findings of the report were presented at the AMUG 2019 conference in Chicago. This was an opportunity to share the

early conceptualisation of the AM global value chain, and to also convince the audience of the valuable contribution of social science to understanding the evolution, strategic development and impact of AM. The audience response was positive and some of their comments and feedback have been integrated into this final report. The first version of this final report has been circulated to those interviewees who participated in the research. This was for two reasons. First, to acknowledge their invaluable contribution to the research and second to

C

Jennifer Johns

University of Bristol). The interviews were transcribed verbatim and then analysed. The resulting qualitative dataset is large. It is rich with technical knowledge and viewpoints on a wide range of topics specific to AM and manufacturing in general. The data have been collated to generate higher-order categories (or discussion points) and the quotes used in the report are illustrative of this wider body of data.

allow for constructive feedback on the findings. I thank the research participants who offered their insights.

Table 1: Interviews conducted by type and country

Country

Firms

Institutions

Total

UK

24

6

30

Germany

8

1

9

US

12

2

13

44

9

53

Image C: Additive Manufacturing User Group Conference, Chicago 2019.

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Insights on Additive Manufacturing: Value, Volume and Reshoring

Existing Academic Work 3D printing technologies are heralded as transformative, marking a radical departure in how goods are designed and manufactured, having been classified as ‘revolutionary’i, ‘disruptive’iii and ‘game-changing’iv by a range of academics. While engineering and material sciences focus on technological advances, social sciences have begun to focus on what they still call ‘3D printing’.

Sociologists, economists, management scientists, geographers and political scientists have been musing over the societal impacts of 3D printing, focusing on predictions of a narrowing of the gap between producer and consumer as individuals design and print their own consumer goods. Work has tended to focus on supply chain managementv, geography vi and sociology vii. Within the field of international business the most prominent contributionviii sets out the potential shifts in the organisation of production due to 3D printing technologies. It makes a series of predictions about the impact of AM in manufacturing and suggests which sectors will be most likely to experience transformative change. Unfortunately, it is based

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on several misconceptions of the sector resulting from sourcing information from secondary industry and media reports and fails even to distinguish between different technologies and materials. The majority of existing contributions on AM in social science are based on analysis of secondary data and in consequence we are still lacking insight into the contemporary situation based on primary research. There are many questions, and points of contention, around how realistic the rhetoric around the transformative potential of 3D printing is. These questions have not been satisfactorily answered. 3D printing is expected by many to not only transform how products are made but also where they are manufactured as the technology has the potential to radically change the geographies of where products are designed, prototyped, produced and distributed by radically reducing supply chain length and delivery times.

manufacturing? How is the AM industry evolving over time? What impacts can we expect from AM and how can the industry respond to the demands made of it? The following sections of the report draw on the informal conversations and recorded interviews held with representatives of firms and institutions in AM and user organisations such as OEMs.

Vision Invisible

What though does that mean for the AM industry and its users within and beyond manufacturing? How far have we come in the goal of volume Image D: Academic work has focused on highly publicised examples of 3D printing, such as this Adidas/Carbon shoe.

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Insights on Additive Manufacturing: Value, Volume and Reshoring

Findings This report could easily be four times the length, such is the richness of the data collected and the scope of the issues and topics discussed that are relevant to additive manufacturing. Other avenues included the history of AM, the emergence and evolution of individual companies, competitiveness dynamics, relationships between suppliers, hype in AM, rates and drivers of innovation, different types of innovation (eg. closed versus open) the AM labour market, regulation and policy-making1. Some of these will be touched upon in this report, but the focus, for reasons of brevity, is upon three main areas: 1. The AM global value chain 2. The shift to volume manufacturing 3. Shifting geographies of production

Volume Graphics GmbH

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Contact me if any of these are of particular interest to you and I can tell you more. Image E: Visualized force lines in an additively manufactured part computed by VGSTUDIO MAX.

1

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Insights on Additive Manufacturing: Value, Volume and Reshoring

01 AM and Manufacturing Value Chains International political economy offers us a conceptual tool with which to examine the AM industry – the ‘global value chain’ix. This framework was developed to study commodities and to aggregate the supply chains of individual firms into a generalised pattern of linkages (from design through to production through to the end of the product life cycle).

It allows 1. power relations between suppliers and stages of the supply chain to be examined, 2. identification of where value is generated and captured and 3. the geographical location of individual parts of the commodity chain to be mapped. It has been used to address issues such as upgrading ie. how firms can more effectively connect to global value chains,

extracting more value, and to understand how global value chains (GVCs) evolve over time. Figure 1 shows the global value chain for additive manufacturing. It is deliberately simplified to highlight the main stages and inputs. Several specific tasks or technologies may be involved in each stage or even individual

input. Focus will now be paid to the dynamics of the AM value chain before turning to the impact of AM on manufacturing supply chains. The busiest stage for AM, with the highest number of individual firms, is the production stage which includes the printers and materials. The value chain is supported by other crucial functions such as post processing and design software.

Figure 1: The additive manufacturing value chain

AM equipment

Software

Materials

Dying

Software

Finishing

Simulation

Prototyping

Metrology X-ray

QA & inspection

Design

Preproduction

Production

Post processing

Packaging

Assembly

For more on the evolution of the AM industry see Johns, J. (2018) The evolution of the AM industry available at: https://medium.com/@jennifer_johns/the-evolution-of-the-additive-manufacturing-industry-59b0a75bff5e

2

6

Distribution

Retail


Insights on Additive Manufacturing: Value, Volume and Reshoring

The attraction of AM is clear:

‘There’s going to be a lot of acquisitions, I think there’s a going to be a lot of investment and I think that people are going to, from outside the industry, be jumping on it as well, because of all of these things in terms of being disruptive, and people, at the end of the day, don’t want to miss the next best thing.’ (Firm 11, UK).

1.1 AM value chain The AM industry is currently composed of several large firms producing printers surrounded by a high number of specialised input suppliers2. This though is set to change as many foresaw consolidation in the industry. ‘A lot of these small players will have been acquired. Yeah, and you could have seen this before. In earlier times, so 1995/2000 there was a lot of rapid prototype, they were owning a Stereolithography machine, they were owning an SLS machine and they were doing business for Volkswagen or whoever, and more and more came in the game’. Firm 16, Germany. Trends have been observed and are predicted to continue and accelerate. ‘All the OEMs end up buying their service provider’ Firm 12, Germany.

and it is now out there and that is pretty awesome’ (Institution 7, US). There was a range of opinions regarding the significance of new entrants, ranging from simple acknowledgement that there will be new emerging, big players (Firm 21, UK) through to more impactful. ‘It could be someone like Amazon that ends up doing it. So it’ll be totally vertically integrated’ (Firm 11, UK). Some envisaged a future in which the whole AM value chain becomes subsumed within a larger industry. ‘In the future machine manufacturers wouldn’t really exist, we’ll just be a department in a big corporation. But that’s true of all our competitors as well if we go to vertical integration’ (Firm 13, Germany).

The firms interviewed cited examples of where and why vertical integration had occurred. ‘They saw a value chain emerging from powder and post-processing and thought “ah, all we have to do is plug AM in the middle” (Firm 14, Germany). The market entry, and vertical integration, strategies of GE received much attention. One interviewee viewed the GE, and other OEM, strategies to be knowledge-seeking. ‘There are OEMs who have AM in house that they want to understand a bit more, what are the challenges. GE have bought companies across the process chain to do that, and it still took them about seven years. In order for an OEM to define their requirement, they need to

F

HIETA

There is still felt to be ample scope for new market entrants. ‘We’ll also see new players. I have no problem with consolidation. We are seeing it not just from metals but in polymers and even in powder bed fusion which has been a very slow technical space Image F: Cross section showing complex geometries.

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Insights on Additive Manufacturing: Value, Volume and Reshoring

The journey to parity with traditional methods is a long one:

‘So I think it’s a hype when people say that it’s going to replace traditional manufacturing, because the cost per part with AM today is nothing close toward a traditional mould maker or a CNC machine and the speed at which it can produce. AM is not going to match it. Do I see, myself, 100 years from now, AM on a par with traditional manufacturing? Absolutely. You know, let’s say 10 years ago, what was considered feasible with additive manufacturing is very different from what is considered feasible today. So the industry will move or very good reasons. But I think it’s hype to say replace. The best thing and accurate way is what you said, because it is complementary, it can co-exist as well as basically different parts coming from different technologies.’ (Firm 32, US).

understand the process, and if they don’t understand the process, it will be very difficult to define the requirements’ (Firm 38, UK). Another cited the importance of materials to the whole value chain. ‘That is why people like Oerlikon who are a powder producer, GKN who are a powder producer, the one who just bought LPW, Carpenter, they are also going into the supply chain so they have the cost advantage of producing their own powders and that will give them an advantage over other players’

EOS

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Image G: EOS orthosis hand.

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(Firm 3, UK). Further discussion of material supply will be made below. The primary motivation for firms to vertically integrate in most industries is to capture extra value by combining stages of the value chain. A topic of discussion during interviews was the notion of value and where it can be found in the value chain. Firms often interpreted ‘value’ as being about how they captured revenue. ‘I understand very well how to add value to a client, but at the same time that value is driving an annuity stream to that install base, whether that be consultation, powder and resins, or service support’ (Firm 26, US). Additional services were considered to be important sources of value generation. Some interviewees discussed the value of AM itself as ‘trying to sell the value of AM is very difficult, because quite often with

the OEMs the purchasing priority with the OEM is price and delivery’ (Firm 10, UK). As a result, the search is on for mechanisms to tackle this. ‘We are looking at the net effect of cost in the build-up of the value chain. Efficiencies can be found, either upstream or downstream, it’s about lean principles’ (Firm 14, Germany). Attention is being paid to Oerlikon’s vertically integrated model in which they suggest that the potential extra costs of 3D printing can be absorbed by value creation elsewhere. Taking a longer-term view, one interviewee suggested that ‘the good engineering practice comes in when the manufacturing process itself is no longer part of the value proposition of the product. Selling a product based on the fact that it is 3D printed is not good practice’ (Institution 2, UK). One value chain input generated a lot of discussion – materials


Insights on Additive Manufacturing: Value, Volume and Reshoring

supply in both polymers and metals. A source of contention was the practice by printer manufacturers of having proprietary materials (closed loop systems). ‘If you look at some of the printer manufacturers, well, one in particular has made a lot of money, particularly in the plastic side of things by controlling the supply of material. The industry is now pushing against that, they don’t like it’ (Firm 37, UK). The development of new materials was widely considered to be an important source of innovation and value generation. Some service bureaus reported that they were blending their own materials. This contrasted with general concern in the sector about the traceability of materials (for repeatability and control), particularly metal powders. ‘In many ways the control and management of materials is the Achilles heel of the powder bed type of techniques and less relevant to laser metal deposition which don’t

typically reuse the material’ (Firm 4, UK). There are concerns around the supply of powders as ‘the supply chain for powders needs to mature. At the moment one or two companies could buy up the entire supply of a particular material for say 6 months because the volume isn’t there’ (Firm 40, US). This issue isn’t limited to metals either as ‘at the moment probably 90% of the market is dominated by nylon 12 commodity, because it is cheap and everything has been optimised on that material’ (Firm 32, US). While efforts concentrate on how to convince customers of the value proposition of AM, stepping back to examine the whole value chain and the contemporary distribution of value allows certain gaps to be revealed. Throughout this research, a recurring theme related to support services and consultancy was uncovered. The majority of the firms interviewed are offering consultancy – many without

being explicitly aware of it – as part of their efforts to ‘sell’ AM. There are costs associated with this process of convincing customers of the value of AM and many businesses are either unaware of these costs (seeing it as general business advice) or are aware but overlook it. ‘We don’t charge for giving advice. You could call it consultancy’ (Firm 25, UK). Regardless of the terminology used, a degree of support and knowledge exchange is taking place within the business relationship. ‘It is something we try to do, of course, to have this relation with the customer and really help them to accelerate their production, their R&D efforts. So we do help customers, not only with printing parts, we also help them with doing smaller workshops, getting their design teams thinking what works, what doesn’t work, give them basic know-how of the process, stuff like that’ (Firm 15, Germany). This is viewed as a necessary transaction cost to secure the work. ‘If we see

Figure 2: AM intervention points in the traditional manufacturing supply chain.

Faster preproduction Reduce/eliminate tooling Reduce time to production

Design

Design for AM can consider whole value chain

Preproduction

Increased consumer role in design

Collapse of distribution and retail? Highly localised production?

Production

Distribution

Retail

Consumers as producers and innovators

Consumption

Customisation

Shorter production runs Faster innovation Relocalisation?

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Insights on Additive Manufacturing: Value, Volume and Reshoring

there is a long-term partnership, we’ll also cover part of the initial cost just to establish the relationship with the customer and work with them’ (Firm 19, UK). Part of the problem is firms not knowing what they should or could charge for, nor what the rates should be. ‘How do you work out what to charge the customers? It was a challenge, we did a lot of clandestine benchmarking activities’ (Firm 19, UK). There are significant differences in the experiences of firms in relation to charging for consultancy, primarily dictated by the size of the firm ie. small and medium sized firms versus large firms. The danger here is that additional support services will become the norm and will be expected in the long term by customers. For some firms is an opportunity rather than a threat. ‘You’re not doing any kind of consultancy in terms of, “have you thought about doing this differently?” A little, but not too much. Yeah, sometimes we’ll say, “have you thought about hollowing that out or building a thread in or …” But nothing revolutionary, as in you’re not looking at the whole system it’s going in to. That’s probably going to be a part of the business that’s going to grow in the

Steve Jurveston

H

Image H: Tesla production line (little use of AM).

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future, as we’ve got more capacity to do that and be onsite more’ (Firm 21, UK). A counter-argument is that ‘the better your machine gets, the less added value you’re going to add in terms of this level of consultancy and educating’ (Firm 25, UK).

1.2 AM impact on manufacturing value chains As noted above, while AM has its own value chain, the technologies are also impacting on manufacturing value chains. Figure 2 highlights the particular areas that AM can impact a generic manufacturing value chain, as articulated by the popular media and academia. In discussion with interviewees, a crucial point was stressed – that the total value proposition of AM was best articulated as a ‘total solution’ that could be realised across multiple stages of the manufacturing supply chain (c.f. earlier discussion of vertical integration within AM). At present AM has established itself as a prototyping technology and the shift into volume manufacturing will be covered in Section 2. However, there are clearly still limits to the degree to which AM technologies are able to stretch across the manufacturing supply chain, facilitated by design for AM. Design for AM is a concept well covered within industry literatures so it will not be rehearsed here. The general point is that for AM to have the transformative impacts that many outside the industry predict it needs to be able to be practiced across value chain stages. ‘To

really develop a lot of successful additive manufacturing end use applications you have to pull value from the whole ecosystem of that part, and that’s how I often times explain design for additive, it’s not taking a part that’s currently injection moulding it and producing it additively’ (Institution 10, US). Consideration of the whole lifetime of the part as considerable cost savings may be made through the use of AM. The use of metal AM in printing functional parts for aircraft due to weight savings is an obvious example. Greater strength and durability of products may also be a significant factor due to sustainability agendas. The two areas of manufacturing supply chain changes that were highlighted by interviewees were relocalisation (when prompted) and production (unprompted). Shifts in the geography of production, including reshoring of manufacturing, are discussed in Section 3. The degree to which AM will impact on traditional production methods has become a less contentious issue over recent years. At the AMUG 2019 conference the general consensus was that AM was not a replacement technology, rather a complementary one. Interviewees emphasized that AM is a tool which is used alongside other tools. There was little suggestion of replacing traditional manufacturing methods (contrary to all the media hype). ‘Our industry will not get utilised properly until people get away from this it’s the be all and end all and use it as a tool. That’s all it is, it’s a fancy tool. And actually, when you look at how it works, it’s a blooming


Insights on Additive Manufacturing: Value, Volume and Reshoring

Production and supply chain responsiveness: contemporary disruption

This report was finalised as government responses to the Coronavirus (COVID-19) were having a significant impacts on supply chains. In this context, AM has the potential to offer localised delivery of products produced quickly (beginning with medical items) without the need for tooling. In this scenario the benefits of AM are clear as it can deliver quickly and many more applications may open up as traditional supply chains are disrupted. However, in many cases this relies on overcoming some barriers such as regulation and the awareness of AM capacity and firms in different national contexts ie. do decision makers know what AM resources are available to them?

The journey to parity with traditional methods is a long one: ‘So I think it’s a hype when people say that it’s going to replace traditional manufacturing, because the cost per part with AM today is nothing close toward a traditional mould maker or a

CNC machine and the speed at which it can produce. AM is not going to match it. Do I see, myself, 100 years from now, AM on a par with traditional manufacturing? Absolutely. You know, let’s say 10 years ago, what was considered feasible with additive manufacturing is very different from what is considered feasible today. So the industry will move for very good reasons. But I think it’s hype to say replace. The best thing and accurate way is what you said, because it is complementary, it can co-exist as well as basically different parts coming from different technologies’. (Firm 32, US). While it is dwarfed by traditional methods, AM has insufficient power to drive those changes. ‘Even in a single site, never mind multiple sites, doing diagnostics of the processes because I am using additive, I still at the moment have to use traditional supply chains for most parts. The ability to change a design within a few moments and then make a part within hours

I

ROBOT Bike Company

simple tool’ (Firm 36, UK). It is clear that for some applications, AM is a suitable tool. For others less so. ‘It is complimentary, so for sure you will always have parts that only make sense by injection molding’ (Firm 18, Germany). At present there are some applications/sectors where AM has made a transformative difference to production – hearing aids, dental and medical for example – but these are predicated on the comparatively small size of the parts and the demand that they be customized. Traditional methods still dominate. ‘If you were to take a car, for example, you might print 10% of the parts, at the most. It’s not going to do it all. And it wouldn’t be cost-effective to do it’ (Firm 20, UK).

is significant. You can’t do that sourcing from Asia’ (Firm 42, US). This was also due to metal AM parts often forming a small part of a final product, again diminishing the capacity for change. Part of the solution lies in a shift in perspective and redefinition of ‘cost’ that considers the whole value chain of commodities, allowing the potential advantages of AM to be realised (often over the whole lifetime of the part). Elements of this discussion touch on another significant debate within AM currently, that of the shift towards volume manufacturing, which is addressed in the next section.

Image I: Completed ROBOT bike featuring metal AM frame components.

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In’Tech

J

AMTechnologies

K

Renishaw

L

Image J: SLA lab, service bureau; Image K: Renishaw RenAM500Q multilaser metal AM system; Image L: Post Pro 3D Mini Chamber.

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Insights on Additive Manufacturing: Value, Volume and Reshoring

02 Prototyping to Volume Manufacturing For several decades AM has primarily been used for prototyping across all industry sectors. ‘We had technologies that were OK for prototyping parts but not for functional parts’ (Firm 23, UK).

The process of moving from prototyping to manufactured parts is not straightforward and the long association of AM with prototyping has created some challenges. ‘The prototyping applications of technology have a very long background. They’ve got excellent diffusion in the manufacturing industry; everyone’s aware of it, everyone uses it for that, and that’s fine. Proposing this for manufacturing, the story changes a little bit, and in many companies who use it as prototyping, they wouldn’t even consider using it for manufacturing, simply because of the associated experience with the technology’ (Institution 3, UK). Despite all the hype around 3D printing, within industry there is a

perception barrier to overcome. This is due to the increased demands being placed on the technology. ‘There have been some stories out there with folks who have struggled for way too long simply because they didn’t get the proper training or the decisions with choice of materials versus process. It is taxing to get to the application you are looking to. Going to production puts a spin on that because our expectations are much higher than with prototyping. You can make a prototype that is pretty strong, you make a production part it HAS to work’ (Firm 42, US). One interviewee, however, reminded us that there are some sectors in which AM is operating where the distinction between ‘prototype’ and ‘product’ is less clear, ‘where does an architectural model fit into that?’ (Firm 25, UK). Recent focus has been on whether AM can meet the demands of industrial production. There is some disagreement about whether this is happening now, is a short- to medium-term possibility or a future goal. ‘To happen on an industrial scale, we need to see serial

M Alfa Romeo, Sauber Motorsport AG

A common source of commentary and debate within the sector – demonstrated by my research and also talks at conferences such as Formnext and AMUG – is the issue of how the industry can increase production of functional parts and achieve manufacturing in large volumes. How close AM is to large volume, functional part production is an intense source of debate.

manufacture. One part may be made at volumes, of say, 10,000 a year. This is becoming a possibility’ (Firm 14, Germany). However, there are sectoral differences, and it is currently easier to ‘sell’ the business model for smaller parts. ‘A lot of our repeat production customers are producing relatively small things in quite high numbers’ (Firm 25, UK). Several interviewees expressed confusion around what the industry meant by ‘volume’ ie hundreds, thousands or millions. Aerospace and Formula 1 are heralded as leading metal AM manufacturing, due to their small-scale manufacturing. As a FI interviewee told me, the comparison between F1 and automotive is not necessarily helpful as ‘They are looking for large volumes. They are looking at high volumes, low price. We are looking

Image M: Alfa Romeo/Sauber C39 Formula 1 car. Formula 1 uses polymer and metal AM in prototyping and functional part production.

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Insights on Additive Manufacturing: Value, Volume and Reshoring

at low volumes and fast’. The user requirements for AM is uneven across different sectors. The leap to industrial scale manufacturing in other sectors familiar with AM prototyping is harder. ‘The automotive industry is a high cost pressure industry, so they need low unit costs and high volumes, and it’s not really a thing that additive is good at, at least at the moment’ (Institution 2, UK). Some interviewees also highlighted concerns around scale and materials. ‘The automotive guys are showing more interest, but it would be some more the niche, lower volume guys, let’s say a McLaren. Even Bentley, there’s quite high volumes now, because obviously a lot of it gets exported, but within a Bentley, although it’s totally different numbers to Jaguar, you know, even within a Jaguar you’ve got specials where it’s hundreds, maybe it’s into the thousands. One restrictive area, and we’ve found that already with polymer is the longevity of AM materials’ (Firm 10, UK). A significant issue here relates to the development of industry standards to increase confidence in process control, repeatability and materials. This large topic is beyond the scope of this report, but Figure 3 summarises some of the points of dialogue expressed by interviewees in the sector. Opinions differed on the importance of speed in AM with a consensus that current printing speeds are no longer a significant barrier to adoption. Direct metal parts often had the longest lead times, but other factors such as functionality were considered relatively more

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Figure 3: AM Dialogue on Standards

What is the problem? ‘Industry does require certification. One of the major obstacles is repeatability and control’ (Firm 38, UK). ‘If you talk to a general manufacturer, they don’t want to go down the 3D printing route because there are no standards to adhere to’ (Institution 9, UK).

‘Because 3D printing is fully customisable, so the big problem with that is that if everything’s completely different, literally every product could be completely different, how do you standardise processes for that?’ (Firm 11, UK).

Can AM use existing standards? ‘We need to rewrite the standards. It does take a long time but if you want to do it properly that’s what we have to do. It’s a technology that was never around when those standards were made’ (Firm 36, UK).

The FAA looked regulations to see if they were adequate for covering the type of processes and materials that could be treated using additive. And the consensus, the agreement, was that the existing regulations are adequate. So that set a strong base line for the regulatory requirements’ (Institution 11, US).

Are standards even needed? ‘At the moment we have this Wild West scenario. Everybody does a little bit and claims oh I have the best one. There’s lots going on and these standards will definitely help to provide proof of confidence and quality gauge, so the Wild West will become regulated’ (Institution 6, Germany).

‘Oh, it’s brilliant because we know what we’re about, so people come to use because we can solve their problems... and it stops them going somewhere else. I was never massively keen on pushing standards, for purely selfish reasons’ (Firm 4, UK).

Internal vs external standards? ‘The standard is so wide you can kind of literally drive a bus through it. So it’s irrelevant. It allows your uneducated, uninitiated, a certain amount of reassurance, but if anybody were to apply any of the standards, at least so far as I’ve seen, the public standards on metal powders for AM, they wouldn’t have a consistent process. The people who are put into production have their own standards with their own requirement that are generally tighter than what is publicly available’ (Firm 4, UK).

‘Every firm seems to be reinventing the wheel’ (Firm 14, Germany). ‘The agenda around standards and certification is driven by risk mitigation. Because we have an expectation that things don’t fail. As a society we have low tolerance for things that do fail’ (Institution 10, US).


Insights on Additive Manufacturing: Value, Volume and Reshoring

The relationship between materials and volume:

‘When you are only making hundreds or low thousands of parts then the cost of material and even, to some extent, the type of material is not as significant as you may think. If you are going to make 2,000 parts and you are going to make them out of nylon 12 that is an expensive and capable material, that application may not need a material of that capability but I might not have much choice. While it is in that low volume space it doesn’t matter. If I am going to try to get into the hundreds of thousands or billions of parts, then material costs will become more significant. But in the short term, material costs, and to some extent, material availability, is not the obstacle you might think.’ (Firm 23, UK)

lot of things will just be thousands of, not tens of thousands’ (Firm 9, UK). The race to high volumes also risks overlooking potential areas for growth. ‘We’re getting there in the transformation from small volume to high volume, but I think the small volume market is one of the markets that’s underestimated. So everyone is looking at the high volume applications, for example, the eyewear or shoe sole industry where you get millions of parts a year, but actually what makes the biggest amount when you look at our revenue or the revenue that our customers do, it’s more serious, and that’s like 50 to 500 parts or something, and there are many applications out there’ (Firm 18, Germany).

N

Mark Beecroft, Manchester School of Art

important. ‘We’d always take more speed. It does, however, also have to perform. So if it is a trade-off against functionality, then no, we wouldn’t take it. No, we wouldn’t take it ever. Whatever it is doing it has to perform’ (Firm 41, UK). The speed of printing has to be considered as part of the whole production process. ‘When you include the set-up time, 3D printing can be much, much faster than other methods. So speed is something that all of the 3D printer vendors are working to improve, but even so, 3D printing has its place when you talk about speed’ (Firm 27, US). A broader perspective then needs to be adopted when taking manufacturing decisions. Indeed, many felt that the industry needed to be more conservative about both its claims for current and future capacities. ‘We’re not at high volume. It can be a few hundred a year or it can be several thousand. I think the highest volume we will about 75,000 a year, but a

Image N: Interlooped: printing traditional knit patterns transcribed into CAD.

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Insights on Additive Manufacturing: Value, Volume and Reshoring

Polymer AM Technologies: The interviewees perceived a shift in the technological and application progress made between metal and polymer AM. Polymer was viewed as the more successful throughout the history of AM, as measured by technological improvements, level of adoption and range of applications. It was considered to be nearer the ‘plug and play’ model. ‘I like the versatility of polymer and ease of processing’ (Firm 25, UK). Stereolithography – the first 3D printing method invented – still ‘has a handful of key advantages, most notably in terms of surface quality’ (Firm 27, US). Polymer printed parts are considered to be nearer production quality and adoption has been highly successful in sectors such as automotive and aerospace, with many OEMs in these spaces using polymer much more extensively than metal. ‘Aerospace like polymer. And we have sort of adopted that strategy as well. So we figured that we can make things a lot more robust, mechanical performances are a lot higher than the data sheet says if you know how the machine works properly, take your time to understand how it manufactures the polymer part and adjust it

Formlabs.com/3D-printers

O

accordingly, you can get, near as damn it, injection moulded performance. So we are at about 95% of mechanical performance of injection moulded parts’ (Firm 41, UK). The reason for polymer machines outpacing metal was explained as being due to competition in the market. For some, the comparatively greater number of polymer machine manufacturers had increased competition and therefore prices. ‘Unless you’ve got healthy competition of two or three suppliers, the price isn’t going to come down. They’re plastics, there are competitors and there are more affordable systems. I personally have a belief that, for a company, is don’t start with metal, start with plastic. You might think you want end production parts in metal, but you learn by plastic and it costs you less’ (Institution 9, UK). OEMs are tending to have more polymer printing technologies (and therefore internal expertise) in-house, while dabbling in-house in metal AM or outsourcing any metal printing requirements to service bureaus.

Metal AM Technologies: Conversations about the type of metal AM processes that will achieve industrial scale manufacturing highlighted that there isn’t one single trajectory of development. ‘The most advanced technologies in industrial context is powder bed with their selective laser sintering processes’ (Institution 6, Germany). However, there was repeated

Image O: 3D printed resin razor handles designed by Gillette (Form 2 SLA).

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acknowledgment that there were alternative technologies becoming more viable. One global OEM stated that they have been holding back on investing heavily in a single technology, instead preferring to observe competitors and wait for alternative technologies to mature. ‘They [competitor OEM] have invested in powder bed laser fusion equipment and playing on it for some years. It is all very good as learning, but the probability is that it won’t be powder bed laser fusion techniques that drive the price point down to a point at which our industry can seriously looking at making metal laser fused parts to make end use components’ (Firm 23, UK). Binder jet processes are viewed as having significant potential in moving metal AM towards industrial production. ‘There are opportunities with some of these new binder jet processes coming out. As the metals industry leverages the metal injection moulding industry, I think there will be opportunities to leverage metal parts at a much lower cost and maybe a higher throughput’ (Institution 10, US). However, the suitability of these new technologies varies depending on function. ‘The main issue in powder bed fusion process is the internal stresses. [Binder jet could be the] perfect technology for particular types of components, not for us, not for very complex thin walls, thin wall heat exchangers, but for other components I see it as a way forward, because of the build rate and the post. At the moment the powder bed fusion process helps us realise our design. The design is the driver rather than the technology’ (Firm 38, UK).


Insights on Additive Manufacturing: Value, Volume and Reshoring

Polymer or Metal AM?

‘It’s a bit older, the polymer technology, and then in the prototyping there is of course polymer was more than metal, but I think metal has kind of been picking up and it’s 50/50. I know of some customers of course which do both as well. There’s some which purely do polymer, some which do metal. If you ask a business person, it’s kind of similar economics, it’s a similar technology. If you ask an engineer, it’s very, very different processes, right, melting of metal powder and the polymer powder, but in the end, there’s still going to be some advantages. Once you’ve started with polymer, it’s easier to go to metal. It’s kind of the same relationships, it’s a similar way of thinking and it just gives you more flexibility, so there’s clearly companies which do both.’ (Firm 12, Germany).

capacity of the metal printers. ‘Many of the machines around us are not really production capable. They are good for prototyping, they can be improved for niche applications, but as volume manufacturing equipment

Table 2: Problems and solutions to AM volume manufacturing

Factor

Problem

Solution?

Equipment

Uncertainty around capacity to print in volume.

Greater evidence from those claiming high volumes and/or improvements in machine throughput. Advances in different technologies. Automation of post-processing. Standard production matrixes.

Materials

Too few materials compared to traditional techniques.

Increase materials available or justify why current range is sufficient.

Adoption

Potential users unsure of shift from prototyping.

Education and knowledge sharing of concrete examples and transparent business models.

Product quality

Issues around the quality, accuracy and reliability of prints, reaching standards.

Machine manufacturers need to deliver controlled processes to reduce variability.

they aren’t there. What we need are lower cost, faster, scalable platforms that can work with a variety of materials’ (Firm 23, UK). Others had a different vision of how machines could be configured to produce the required outputs. ‘I believe the future is not necessarily a large machine that is very expensive, as long as you can print a part in a given build volume it’s better for companies to consider multiple machines so they can have true flexible manufacturing and scale’ (Firm 32, US). As suggested above, greater progress has been made with polymers, but in the long-term, for AM to make serious in-roads into manufacturing, the division of the sector into polymer vs metal may be an additional barrier. P

TWI Ltd

There are numerous barriers for AM to tackle with regard to higher volume manufacturing: Table 2 outlines the four key factors. A firmly voiced opinion from several OEM users was around the current

Image P: Electron beam parts.

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Insights on Additive Manufacturing: Value, Volume and Reshoring

03 Geographies of Production In addition to the focus on production methods, AM is expected by the general public, policymakers and many in academia to not only transform how products are made but also where they are made. The technology has the potential to radically change the geographies of where products are designed, prototyped, produced and distributed by radically reducing supply chain length and delivery times.

AM is intimately tied up in this narrative around the strengthening of advance economy manufacturing through reshoring as the technology appears to offer a hi-tech solution to the problem of severed international supply chains caused by political actions and/or firm-based strategies. During my conversations with those in the industry, the vast majority expressed scepticism about the degree of contemporary evidence of geographical shifts in production. A few anecdotal references were made to the return of some forms of prototyping and some injection moulding (both due to speed and quality issues) from China back to the US, Germany and UK. This section will examine the key areas

International Maritime Organisation

Q

Image Q: Global supply chains rely on logistics.

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of discussion – labour costs, design for AM and variations by sector and volume. The primary driver for firms ‘offshoring’ ie. sourcing outside their home market is cost. A significant proportion of production costs are labour costs (on average around a third). The interviewees agreed with this being the primary driver for making location decisions, but there were tensions around the impact of increased automation. Many in the industry aligned themselves with the political discourses around AM leading to reshoring to advanced economies, arguing that reduced labour costs would make production more feasible in ‘home’ markets. This argument is based on the understanding that more advanced, hi-tech technologies do tend to stay closer to their home markets, or lead firms. The vast majority of global firms retain their core research and development facilities in their home markets, often close to their headquarters. There are good strategic reasons for this related to the protection of IP, recruitment of skilled labour and inter-firm

interaction which are eased through greater geographical proximity. Relatedly, the home markets are those that seek, and are prepared to pay for, the cutting-edge technologies. ‘In the Far East the demand isn’t necessarily for the expensive multilaser, process monitoring machines, it is much more for the cheap machine and of course there are a number of Chinese manufacturers who have copied machines or invented their own machines. The latest technology tends to be consumed in the advance economies’ (Firm 40, US). Similarly, metal AM machines are still far from being ‘plug and play’, demanding trained operators and maintenance which are all presently easier to access in advanced economies. Polymer machines are closer, but there is still a level of expertise needed in set up and operation. Counter-arguments regarding labour costs Contemporary limitations: many AM technologies still require a high degree of manual labour, particularly


Insights on Additive Manufacturing: Value, Volume and Reshoring

Reshoring explained:

Reshoring is the process of bringing offshore operations back to the originating country. It is viewed as a contemporary counter-balance to the new international division of labour caused by the acceleration of globalisation since the 1970s. This caused the wholesale shift in manufacturing to low labour cost economies in the Far East. More recently, rising cost of labour in developing countries (including China), peaks in oil prices, increased transport costs and supply chain vulnerabilities have resulted in some evidence of a shift back to advanced economies such as the US and Europe. Firms are also driven by the economic downturn, sustainability agenda, customer demands for flexibility and pressure to improve cost performance to consider where to undertake all parts of their production process. The phenomenon of reshoring has gained greater prominence due to political engagement with the topic. In the US it became a campaign issue during the last US presidential election with Trump stating that he wants to see more manufacturing on American soil. In the UK it has been cited as a possible solution to the negative economic and trade consequences of Brexit. The Economist recently cited the Chartered Institute of Procurement and Supply (CIPS) as their survey suggested that almost a third of British businesses that use EU-based suppliers said they were looking for British replacements.

in post-processing. This is a barrier to full automation and sufficient reduction of manual labour to trigger the recalculation of costs in different geographical locations. ‘As long as there is a lot of assembly needed which is labour intensive then it will basically stay in the countries where they stay’. However, ‘once you remove the manual assembly work, then for sure the production can go where the parts are needed or where the products are sold’ (Firm 18, Germany).

Developments are taking place in the automation of post processing, to the interest of many in AM. Future limitations: over time labour costs will again become more significant, creating subsequent drivers towards lower cost locations. ‘At the moment the throughput and cost per part and the technology is such that the labour cost isn’t really the issue. However, as we increase the through put and as we bring down the cost per part, then I am

sure the labour rates will become more of an issue and then the machines will probably be taken up more widely in those markets where you get that advantage’ (Firm 40, US). This is likely to first occur within OEM organisational structures ie AM production sent to subsidiaries in developing countries rather than through outsourcing agreements. The transformative potential of metal AM is being curtailed by

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Insights on Additive Manufacturing: Value, Volume and Reshoring

contemporary limitations on the degree of designing for AM. ‘The transition for designing for additive hasn’t really been established. Once parts are optimized for additive then location for manufacturing is almost meaningless’ (Institution 7, US). For this CEO there is potential for significant change, but this is predicated on systemic shifts in how production parts are designed and manufactured. The decision to use metal AM parts needs to happen at the design stage to maximise the benefits of using AM. This too can influence where the actual production takes place. As labour costs rise in developing countries, decision-making around which parts of the production chain drive location decisions may alter. ‘The cost of manufacturing, the cost

R

of an AM machine is the same in China as it is in the UK, to cost the material is the same in China as in the UK, so in that respect it levels the playing field. If that means that the design holder, the person that’s commissioning that work, is based in the UK, then yes, it is more likely to come over to the UK’ (Firm 4, UK). This adds significant complexity in a still largely vertically disintegrated industry around the locational demands of the various parts of the production process, from design through to distribution. There is variation in the types of activities reshored based on volume. Currently small scale, bespoke production is more likely to remain in the advanced economies of North American and Europe rather than being offshored to lower-

cost locations. Interviewees felt that this was true within AM, given the existing limitations discussed above. ‘In terms of high-volume production, we haven’t seen any evidence so far where someone is taking high volume production from China, moving it to the US or Europe, and saying “because we can do this with 3D printing, now we’re moving it back,” because high volume manufacturing in China is increasingly automated itself and so the difference in what you can achieve in terms of labour costs between China and the US is shrinking’ (Firm 27, US). There is also a high degree of sectoral variation. Some is regulatory as aerospace firms in the US pointed out that they have been prevented from offshoring by government regulation. In other sectors we see concerns about quality as a key factor. ‘AM has the potential to change where things are manufactured, and maybe it depends on the applications of... for sure, all our eyewear customers produce in Europe. None of them produces the glasses in China or Asia. Would they have done in the past? They have done in the past, but only the low-quality frames’ (Firm 18, Germany). Highly publicised reshoring includes the relocalisation of dental implants

Jonathan Rowley

International Maritime Organisation

S

Image R: Royal British Legion Poppy. The 3D printed parts of this jewellery pin are designed and printed in London, replacing current merchandise sourced from China. The poppy retails for 3.5 times the cost of production and is assembled by volunteers in the UK. Image S: Before and after automated post processing.

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Insights on Additive Manufacturing: Value, Volume and Reshoring

Table 3: Reshoring Scenarios and AM

Reshoring factors

Current role of AM

Points of debate

Future scenarios

Labour costs

Manual costs still too high for majority of activities to reshore.

Automation will bring decreased labour costs.

Significant reshoring of manufacturing to advance economies.

Increased machine speed and throughput could increase significance of labour costs. Proximity to high-level firm functions (HQ, R&D)

Tendency for innovative and most costly AM to occur in home markets. AM development and operation still concentrated within key centres of OEMs.

Proximity to user/clients operations

How much longer advanced economies (Germany, UK, US etc) will dominate AM technological development. Degree to which OEMs with AM capacity will continue to concentrate AM in core centres.

AM firms and service centres locate near to users /clients in advanced economies.

Degree to which AM will follow users/clients throughout their global distribution.

AM still concentrated within a relatively small market of users and clients.

Degree to which AM will have a much larger share of the manufacturing market.

AM still relatively autonomous and vertically disintegrated.

Industry evolution and trajectory will likely increase vertical integration through merger and acquisition.

Manufacturing does not reshore or we see a return to offshoring to low cost economies. Continued dominance driven by greater demand for AM services in advanced economies. Or rise in expertise in low cost economies like China in which means firms can locate R&D functions outside home market more easily. Large OEMs will distribute AM throughout their geographical footprint if the cost-benefit analysis is positive. If users/clients reshore activities, AM is likely to remain concentrated in advanced economies, if not they will follow their users/clients. If AM increases its position vis-Ă -vis traditional production methods it may have greater impact on design, production and logistics decision making. This will likely force production closer to the consumer. Vertical integration will decrease the clustering of firms in advanced economies, opening up the potential for different functions to be located based on cost. Or it will concentrate activities in a smaller number of geographical locations.

Access to resources such as highly skilled labour and materials

AM firm location decisions driven by accessing increasingly scarce highly skilled labour. AM manufacturing predicated on access to materials.

AM continues to be concentrated Degree to which the necessary in areas where skilled labour is skilled labour will be present in advanced or low-cost economies. located due to inter-industry and Degree to which the supply chains outside industry interventions in advanced economies to boost for materials will keep pace with the supply of labour. Or low cost demand for AM. economies increase their supply of highly skilled labour raising the amount of higher level AM functions outside advanced economies. Decentralisation of AM reduced by vulnerable material supply chains limited by extensive global material supply chains. Or supply levels and supply chains match or outstrip demand, which may be facilitated by increased vertical integration with AM and/or OEMs.

Faster time to market

AM still currently services the majority of users/clients in advanced economies.

Degree to which AM remains within traditional production and logistic supply chains.

Larger shares of manufacturing output could drive more significant, possibly decentralised production chains in which production and consumption are geographically closer.

Government intervention

AM considered part of reshoring initiatives. These policies vary by nation.

This is not a current point of debate within AM but there are questions about the degree to which AM will be impacted by reshoring initiatives.

Advanced economy initiatives may clause reshoring of manufacturing in advanced economies which will increase opportunities for AM in home markets. Or the initiatives will be unsuccessful due to budgetary restrictions during economic downturn and little changes. And/or low-cost economies introduce their own incentives to prevent manufacturing reshoring which will maintain status quo.

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Insights on Additive Manufacturing: Value, Volume and Reshoring

and related production toward dental surgeries rather than through subcontracting in centralised labs. Now, if they do subcontract it is more likely to be to an AM service bureau. Although it should be noted that dental implants never tended to be sourced using geographically extensive supply chains due to time demands.

stay in the UK. The most concerning thing I heard recently was that the 3D printed titanium hearing aids, they’ve moved to titanium, and those hearing aids are being made in the Philippines, and that’s the only example I can give you of metal production kind of consumer parts, really, and they’ve moved it to overseas’ (Firm 1, UK).

likely that existing production will remain dominated by traditional organisational geographies but that newer products that are designed for AM will be able to be produced closer to the consumer – be that in advance or low-cost economies – using the (projected) expanded global networks of AM firms and OEMs.

Another factor to consider is that AM capacity in Asia is rapidly increasing so we can’t assume that AM will come back purely due to technological expertise in advanced economies. ‘Manufacturing won’t all come back from the Far East because they won’t let it’. There is now some evidence that higher value AM production is taking place in lower cost locations. ‘We’ve always said the high value stuff will come back, the high value stuff will

Table 3 (on page 21) charts the key factors involved in reshoring, applying these to AM and outlining the possible future scenarios. The degree to which AM could transform existing geographies of production is dependent on machine speed and throughput, material supply and access to skilled labour, labour costs and the composition of the AM sector as a whole. In the short term it appears likely that the status quo will remain. Longer-term it is

As one interviewee liked to remind us ‘money controls everything and unless there is an economic, financial reason to change something, it doesn’t change’ (Firm 39, UK).

NASA / MSFC / David Olivev

T

Image T: AM use by NASA for rocket propulsion.

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It is most likely that a global transformation in the locations in which we manufacture will be precipitated by larger global crises, such as peak oil and/or climate change significantly increasing the cost and vulnerability of longdistance supply chains. Here we would see a shift to more regionalised or localised production, in which AM would play a significant role. We can therefore suggest that AM may not cause geographical changes, but it will likely play a crucial role in solving the problems that will emerge, with a particularly significant role for metal AM.


Insights on Additive Manufacturing: Value, Volume and Reshoring

Conclusions The metal industry is evolving rapidly. Some aspects of that change are clear and relatively uncontested such as the diversification of applications and the logic of using AM.

Others are more hotly debated, including where improvements need to be made (equipment, materials, supply chains, or all of these), where the greatest growth potential lies (sectoral and geographical) and how the industry should be most efficiently organised in the future. There are still some serious challenges around how AM is sold. Part of this process, which relates back to the race to high volume being contexualised within conventional understandings of how products should be designed and manufactured, is emphasising that more systemic change needs to happen. ‘Which I think is the crucial difference with AM, isn’t it? That’s what the selling point is, it’s actually we’re not saying we can do existing things better, we’re saying we can do totally different things. And proving that there’s a business model underlying it’ (Firm 33, US). Two things need to happen in relation to how the business model of AM is understood within the industry and externally. First, there needs to be greater transparency around existing business models. Many expressed extreme frustration

at business models that were marketed as being successful but which were increasingly questioned regarding their feasibility. Some interviewees felt that the high publicity cases were used to drive market growth and raise the profile of particular AM firms. Second, the tendency to view AM as a unique and special technology is potentially alienating potential users and limiting application. ‘We think the A-list celebrity status of AM needs to be normalised’ (Firm 14, Germany). We do know that in the short term the AM sector is going to be sitting under, or alongside, traditional manufacturing. ‘AM is a technology like many others. It will play a key role in the factory of the future, but it will not replace everything. It is going to be important in interacting with all other technologies’ (Firm 12, Germany). This means that long-standing concerns about the state of manufacturing in advanced economies remain a concern for AM. In the case of reshoring there is some debate ‘if 3D printing is going to bring the supply chains back to the UK, what does that

mean? Does it mean we’re going to manufacture components or does it mean we’re going manufacture machines, or what does that actually mean? The whole point about 3D printing is supposed to be local for local manufacture’ (Firm 11, UK). The AM value chain has its own vulnerabilities (many interviewees cited material supply as one), and research participants noted the relative lack of 3D printing processes in their own production of AM machines. Issues such the manufacturing labour market (education and skills), government policy making and uneven regional economic development will impact on traditional manufacturing and AM. At present the AM industry is offering a compelling case for increased public and policy interest and funding, but the majority of interviewees in all three countries were either unaware or scathing of current national government initiatives to support AM. If it is to achieve the lofty ‘transformative’ ambitions set by policy makers and popular media, the industry may well need it.

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Insights on Additive Manufacturing: Value, Volume and Reshoring

References i

https://www.metal-am.com/wp-content/uploads/sites/4/2020/03/Metal-AM-Spring-2020-sp-1.pdf

ii

Goulding, C. G., Bonafe, A. and Saell, g. (2013) The R&D tax credits and the US 3D printing initiative. Corporate Business Tax Monthly 15 (1): 207-15.

D’Aveni, R. (2015) The 3D printing revolution. Harvard Business Review. May; Hyman, P. (2011) Ten disruptive technologies. Commun ACM 59(9): 20; Rylands, B., Bohme, T., Gorkin, R III, Fan, J., Birtchnell, T. (2016) The adoption process and impact of additive manufacturing on manufacturing systems. Journal of Manufacturing Technology Management 27 (7): 969-989.

iii

iv Kothman, I. and Faber, N. (2016) Supply chain management: processes, partnerships, performance. 4th Ed. Supply Chain Management Institute. Sarasota, FL.

Holmström, J., Holweg, M., Khajavi, S. H. & Partanen, J. (2016) The direct digital manufacturing (r)evolution: definition of a research agenda. Operational Management Research 9: 1-10; Holmström, J., Partanen, J., Tuomi, J. & Walter, M. (2010) Rapid manufacturing in the spare parts supply chain: Alternative approaches to capacity deployment. Journal of Manufacturing Technology Management. 21 (6): 687-697; Khajavi, S. H., Holmström, J. & Partanen, J. (2018) Additive manufacturing in the spare parts supply chain: hub configuration and technology maturity. Rapid Prototyping Journal. 24 (7): 1178-1192; Roca, J. B., Vaishnav, P., Laurejs, R. E., Mendonca, J. & Fuchs, E. R.H. (2019) Technology cost drivers for a potential transition to decentralized manufacturing. Additive Manufacturing 28: 136-151; Strong, D., Kay, M., Conner, B., Wakefiled, T. & Manogharan, G. (2018) Hybrid manufacturing – integrating traditional manufacturers with additive manufacturing (AM) supply chain. Additive Manufacturing 21: 159-173; Strong, D., Kay, M., Conner, B., Wakefiled, T. & Manogharan, G. (2019) Hybrid manufacturing – Locating AM hubs using a two-stage facility location approach. Additive Manufacturing 25: 469-476. v

vi Rehnberg, M. and Ponte, S. (2018) From smiling to smirking? 3D printing, upgrading and the restructuring of global value chains. Geoforum 18 (1): 57-80; Gress, D. R., & Kalafsky, R. V. (2015) Geography of production in 3D: theoretical and research implications stemming from additive manufacturing. Geoforum 60: 43–52.

vii

Birtchnell, T. & Urry, J. (2018) A New Industrial Future? London: Routledge.

viii Laplume, A., Petersen, B. & Pearce, J. M. (2016) Global value chains from a 3D printing perspective. Journal of International Business Studies 47(5):595–609.

ix See the work of Gary Gereffi as the foundational contributor. This also includes the work of geographers such as Dicken, Coe and Yeung on Global Production Networks.

Contact Dr. Jennifer Johns Reader in International Business Department of Management, University of Bristol, Howard House, Queen’s Avenue, Bristol BS8 1SD Tel +44 (0)7974 940246 Email jennifer.johns@bristol.ac.uk @jennifer_johns_ linkedin.com/in/jennifer-johns-535185131

bristol.ac.uk

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