5/18/17 – by Anthony Aguon, Corrine Bona, Howard Hsu, Jordan Raabe
Only several years ago in the early 2010’s, additive manufacturing, more commonly known as 3D-printing or AM, became a hotly evangelized technology, propelled by a vanguard of early-adopting consumers who envisioned 3D printers would one day be as common in the home as microwaves. However, as 3D printing progressed through the hype cycle, the future of a desktop printer in every home seemed farther and farther away. That slow-down didn’t stop the technology from continuing to advance from printing plastic polymers to now capably working in metal and as a result, finding new supporters in business and manufacturing who are ready to enter “the Fourth Industrial Revolution.” Today, additive manufacturing is already in use in the aerospace, automotive, medical, and military industries and any company that wants to stay competitive in the future will need to understand both what additive manufacturing can offer and if it’s a technology that can drastically revolutionize their own supply chain.
II. RAPID PROTOTYPING
When first adopted, businesses used additive manufacturing to save time and money by integrating 3D printers into their design phase to rapidly prototype parts. Traditional prototype methods can include the costs of producing molds or casts that may only be used once or twice per design, while additive manufacturing printed directly from the three-dimensional computer aided design (CAD) data, or build file, no molds required. In creating prototypes for an engine’s intake manifolds, engineers at Ford would have to wait four months for a prototype to be produced, at a cost of $500,000; after switching to rapid prototyping and additive manufacturing, Ford reduced the time frame to just four days, at a cost of only $3,000. Iterations and minor adjustments were quick to produce, and quicker turnaround and cheaper costs allowed Ford’s engineers to test more designs and create a better quality final product.
At first most companies used additive manufacturing only for prototyping because printing materials were limited to plastic polymers, which were not functionally suitable for most applications. However, in the beginning of 2017, companies have begun to apply additive manufacturing in their production processes as well with the rise of printing in metal.
III. OPENING ACCESS TO ECONOMIES OF SCALE
Because of high fixed costs, traditional supply chain models aim to increase production of similar units to the minimum efficient quantity in order to access economies of scale and lower the variable cost per unit. However, additive manufacturing can produce low quantities of highly customizable units with little additional fixed cost compared to traditional manufacturing processes, allowing companies to significantly lower the price of their product and offer more customization within each product line. Traditional commercially made prosthetics such as artificial legs and limbs can cost between $10,000 and $20,000 each, due to low volumes and the need to customize each limb to fit the individual. Since the emergence of additive manufacturing, 3D-printed artificial limb companies have sprouted up offering low cost, perfectly custom-fit prosthetics at a fraction of the cost, like Exiii, a Japanese prosthetics company that can produce 3D printed hands with semi-motorized fingers and flexible wrists for $200 in material costs. e-Nabling the Future is a non-profit organization taking this a step further, connecting communities with young children in need of similar affordable prosthetic motorized hands and forearms, not only customizing each prosthetic to each child’s measurements, but also offering custom paint schemes, such as ones matching their favorite superheroes. Not only does additive manufacturing lower the cost of the prosthetic, storing the design data and build file reduces the fixed costs of producing future or back up prosthetics for each individual. The World Health Organization estimates that there are about 30 million people worldwide in need of prosthetic limbs, braces, or mobility devices, but only 20% of those people have them. Additive manufacturing can help companies and nonprofit organizations connect amputees with more affordable and more accessible solutions. For industries that require high customization or have high per unit costs due to low volumes, additive manufacturing can drastically reduce the cost of the product to the company and allow them to offer their customers a lower cost, more personalized product.
IV. ADDITIVE MANUFACTURING IN MASS PRODUCTION
On April 10, 2017, Boeing announced that it would begin using additive manufacturing to manufacture its titanium parts for its 787 Dreamliners. This is the first time for any company to use AM components for parts of a plane that bear the stress of an airframe during a flight. The aviation company partnered with Norsk Titanium to print the aircraft components, which have already passed the Federal Aviation Administration’s rigorous testing program. Boeing makes around one hundred and forty-four (144) Dreamliners a year, and expects to shave two to three million dollars off the manufacturing cost of each plane.
Testifying to the US Senate Committee on Energy & Natural Resources, Dr. Leo Christodoulou, Director of Materials and Structures for the Boeing Company, described the benefits that AM could provide over conventional manufacturing processes. “AM enables designs with novel geometries that would be difficult or impossible to achieve using conventional manufacturing processes, which can improve a component’s engineering performance.” This ability to print novel geometries allows Boeing to improve product performance and reduce their environmental impact. Manufacturers can now hollow out a part to make it lighter and more fuel-efficient. At the same time, they can add internal structures to the part, making it stronger, more durable, and more resistant to impact. Because of this advantage, the aircraft industry has started using AM to produce many aircraft components—deck monitor arms, seat buckles, and various hinges and brackets—effectively reducing the mass of their aircrafts and improving fuel efficiency.
Another advantage provided by additive manufacturing is that it allows complex aircraft components to be manufactured in a single run, eliminating the need to mold pieces separately and then assemble them together. GE Aviation, for example, recently began using AM to print the fuel nozzles of certain jet engines. Producing fuel nozzles through conventional manufacturing required twenty parts to be cast separately before being fabricated into one piece. By printing the fuel nozzles with AM, GE Aviation cut its manufacturing costs by seventy-five percent.
Christodoulou also testified about how AM reduces the “cradle-to-gate” environmental footprints of component manufacturing and improves buy-to-fly ratios. This is achieved by avoiding all the waste from the tools, dyes, and raw materials associated with CM processes. In the aviation industry, a buy-to-fly ratio is used to measure the amount of raw material used in the production of an aviation component. The buy-to-fly ratio is the “weight ratio between the raw material used for a component and the weight of the component itself.” Buy-to-fly ratios for conventional manufacturing of titanium aircraft components made of titanium are as high as 40:1. By reducing cost, tooling and lead times in the manufacturing of components, AM brings Boeing’s buy-to-fly ratio to as little as 3:1.
In addition to the benefits mentioned by Christodoulou above, AM also provides additional savings in inventory, shipping, and facility costs. AM enables the potential for a company to customize and manufacture any part, at any time, location and batch size, and decentralize supply chain production in various regional or national locations close to major markets. The benefits of decentralizing a supply chain include quicker responsiveness, greater flexibility, and improved efficiency. Additionally, decentralizing lowers the capital investments needed for each facility, as well as shipping costs and the costs associated with inventory overage/underage.
V. REDISTRIBUTION OF MANUFACTURING JOBS
Today, workers in the manufacturing sector continue to fret about the negative impacts that modern technology will bring to the job market. While some fear that additive manufacturing growth will decrease job demand, others predict that it will expand the number of job opportunities, as well as increase wages.
A major concern that has risen today amongst all sectors is the unknown consequences of automation. Automation allows for companies to hire fewer people while producing more products by replacing human labor with machines. It is safe to say that manufacturing jobs in the United States are not, and will never be, what they used to be back in the 1950s after World War II. In fact, in 2014, employment in the manufacturing sector was down by nearly 50% from its peak in 1979. However, such a significant decrease in jobs is due to more than just automation and new innovative technology. In the last several decades, the United States has been unable to compete with the low cost of manufacturing and labor in countries like China and Mexico, resulted in a loss over 5 million American manufacturing jobs to outsourcing between 2000 and 2016.
Although these figures are undeniably concerning, recent reports have found an increase in demand for additive manufacturing jobs. From 2010 to 2014, the demand for additive manufacturing skills rose by 1,834%, specifically the need for industrial engineers, mechanical engineers, software developers, commercial and industrial designers, and marketing managers. The reason for this is the increased promise and growth that additive manufacturing has to offer large scale manufacturing. According to Gartner, the world’s leading information technology research and advisory company, 3D printer sales will exceed $14.6 billion growth by 2019, which means that sales will have a compound annual growth rate of 72% from 2014 to 2019.
To accommodate the rapid expansion in the additive manufacturing sector, as well as avoid a large gap in skilled workers, universities like Massachusetts Institute of Technology and Georgia Institute of Technology have already started offering courses in additive manufacturing. In addition, with the support of large corporations, technical and trade schools are also starting to offer additive manufacturing programs in order to upskill current manufacturing workers with the technical expertise necessary to support growing demand for AM labor.
Boeing, the world’s largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems, has been working closely with the Washington Aerospace Training Resource Center, a program operated by the Edmonds Community College and the Renton Technical College, to develop a curriculum focused on obtaining certifications for the aerospace industry and providing more than $2.5 million worth of materials and advanced equipment. Since 2010, Boeing has hired roughly 975 of the 3,050 students from the WATR Center who have been provided with certificate level training. In addition to Boeing, General Electric’s GE Additive division has followed suit by investing in worker training programs, committing over the next five years to donate $8 million to colleges and universities to support metal additive machines as well as $2 million in subsidized desktop polymer printers to primary and secondary schools.
VI. FUTURE CHALLENGES
Despite the benefits that additive manufacturing can offer companies and their stakeholders, transitioning into the digital supply chain also means exposing a company to an unfamiliar set of twenty-first century cybersecurity vulnerabilities. These can include intellectual property theft, product and equipment sabotage, unauthorized production, or counterfeit production. Companies invest significant capital and resources into research and development, creating valuable intellectual property that exists intangibly, distributed through business practices, manufacturing partners, processes, employees, patents, etcetera. However, in the world of digital supply chain, blueprints, materials, and instructions that a company develops through significant time and money investment exists in a single file that would have no problem fitting on a cheap thumb drive or being freely distributed on an online file-sharing site. Even if the build files stay within the supply chain, supply chain printers could produce additional units of a company’s design and distribute through their own channels.
Beyond losing trade secrets and competitive advantage, there are brand and public safety risks to adopting additive manufacturing as well. In one experiment, researchers successfully hacked into a network and altered the build file for the propeller of a drone helicopter; by introducing .1mm hidden pockets inside the propeller, the final unit passed visual and ultrasound inspection, but fell apart during use, sending the drone crashing to the ground. Attacks like these could tarnish public brand images and, in some applications, cost human lives.
Even after proving the potential savings of integrating manufacturing within a sandboxed environment, some companies may be hesitant to adopt additive manufacturing and the digital supply chain because of these risks. “If you’re the department of defense and you’ve got specs for parts on an F-15 fighter jet, you probably won’t want them stored in the cloud and risk them leaking overseas. These files need to be encrypted and accessed by authorized personnel and machines.” says Tim Rose, Director of Business Development and Marketing at Identify3D, one of the companies that has identified the need for digital security in tomorrow’s supply chain. The Identify 3D platform enables industrial designers to encrypt CAD/CAM files and assign rules and parameters within the designs to ensure that parts are printed to specification. “For example, we don’t allow access to the build files unless the user is authorized, has machine abc, serial number xyz, materials that are 80% aluminum, 20% titanium, and the user can only print 10 per year.”
Enterprising counterfeiters can still find ways to circumvent tightened cyber security. Whether a company uses additive manufacturing or not, the propagation of 3D printers and 3D scanners will allow any individual with the right equipment to scan and reproduce a duplicate copy of a product, regardless of whether they have the original build file. Like most knock-offs, the output will likely be functionally inferior, but can still threaten a company’s bottom line and brand value. Along with a partner, Identify3D is also exploring how to track and trace printed products back through the supply chain via embedding chemical trackers inside authentic products, allowing a company to verify a product’s authenticity as well as identify which machine and manufacturer produced that unit.
Digital security and counterfeit risks are not unique to additive manufacturing, but other industries with similar challenges music or fashion accessories continue to grow, learning how to anticipate and react to new vulnerabilities. Additive manufacturers and their partners will also have to play this game of cat and mouse as new exploits are discovered and patched.
While the future of additive manufacturing and to whether it is the future of supply chain and manufacturing some think it might be, it’s already in use and yielding benefits to companies today. As the technology develops and more businesses explore integrating it into their own supply chains, most companies will likely be affected by the rise of additive manufacturing, whether they are using it or not.
by Anthony Aguon, Corrine Bona, Howard Hsu, Jordan Raabe
University of San Francisco MBA Program