The 3-D Printing Revolution

FROM THE MAY 2015 ISSUE of HBR

Industrial 3-D printing is at a tipping point, about to go mainstream in a big way. Most executives and many engineers don’t realize it, but this technology has moved well beyond prototyping, rapid tooling, trinkets, and toys. “Additive manufacturing” is creating durable and safe products for sale to real customers in moderate to large quantities.

The beginnings of the revolution show up in a 2014 PwC survey of more than 100 manufacturing companies. At the time of the survey, 11% had already switched to volume production of 3-D-printed parts or products. According to Gartner analysts, a technology is “mainstream” when it reaches an adoption level of 20%.

Among the numerous companies using 3-D printing to ramp up production are GE (jet engines, medical devices, and home appliance parts), Lockheed Martin and Boeing (aerospace and defense), Aurora Flight Sciences (unmanned aerial vehicles), Invisalign (dental devices), Google (consumer electronics), and the Dutch company LUXeXcel (lenses for light-emitting diodes, or LEDs). Watching these developments, McKinsey recently reported that 3-D printing is “ready to emerge from its niche status and become a viable alternative to conventional manufacturing processes in an increasing number of applications.” In 2014 sales of industrial-grade 3-D printers in the United States were already one-third the volume of industrial automation and robotic sales. Some projections have that figure rising to 42% by 2020.More companies will follow as the range of printable materials continues to expand. In addition to basic plastics and photosensitive resins, these already include ceramics, cement, glass, numerous metals and metal alloys, and new thermoplastic composites infused with carbon nanotubes and fibers. Superior economics will eventually convince the laggards. Although the direct costs of producing goods with these new methods and materials are often higher, the greater flexibility afforded by additive manufacturing means that total costs can be substantially lower.

With this revolutionary shift already under way, managers should now be engaging with strategic questions on three levels:

First, sellers of tangible products should ask how their offerings could be improved, whether by themselves or by competitors. Fabricating an object layer by layer, according to a digital “blueprint” downloaded to a printer, allows not only for limitless customization but also for designs of greater intricacy.

Second, industrial enterprises must revisit their operations. As additive manufacturing creates myriad new options for how, when, and where products and parts are fabricated, what network of supply chain assets and what mix of old and new processes will be optimal?

Third, leaders must consider the strategic implications as whole commercial ecosystems begin to form around the new realities of 3-D printing. Much has been made of the potential for large swaths of the manufacturing sector to atomize into an untold number of small “makers.” But that vision tends to obscure a surer and more important development: To permit the integration of activities across designers, makers, and movers of goods, digital platforms will have to be established. At first these platforms will enable design-to-print activities and design sharing and fast downloading. Soon they will orchestrate printer operations, quality control, real-time optimization of printer networks, and capacity exchanges, among other needed functions. The most successful platform providers will prosper mightily by establishing standards and providing the settings in which a complex ecosystem can coordinate responses to market demands. But every company will be affected by the rise of these platforms. There will be much jockeying among incumbents and upstarts to capture shares of the enormous value this new technology will create.

These questions add up to a substantial amount of strategic thinking, and still another remains: How fast will all this happen? For a given business, here’s how fast it can happen: The U.S. hearing aid industry converted to 100% additive manufacturing in less than 500 days, according to one industry CEO, and not one company that stuck to traditional manufacturing methods survived. Managers will need to determine whether it’s wise to wait for this fast-evolving technology to mature before making certain investments or whether the risk of waiting is too great. Their answers will differ, but for all of them it seems safe to say that the time for strategic thinking is now.

Additive’s Advantages

It may be hard to imagine that this technology will displace today’s standard ways of making things in large quantities. Traditional injection-molding presses, for example, can spit out thousands of widgets an hour. By contrast, people who have watched 3-D printers in action in the hobbyist market often find the layer-by-layer accretion of objects comically slow. But recent advances in the technology are changing that dramatically in industrial settings.

Some may forget why standard manufacturing occurs with such impressive speed. Those widgets pour out quickly because heavy investments have been made up front to establish the complex array of machine tools and equipment required to produce them. The first unit is extremely expensive to make, but as identical units follow, their marginal cost plummets.

Additive manufacturing doesn’t offer anything like that economy of scale. However, it avoids the downside of standard manufacturing—a lack of flexibility. Because each unit is built independently, it can easily be modified to suit unique needs or, more broadly, to accommodate improvements or changing fashion. And setting up the production system in the first place is much simpler, because it involves far fewer stages. That’s why 3-D printing has been so valuable for producing one-offs such as prototypes and rare replacement parts. But additive manufacturing increasingly makes sense even at higher scale. Buyers can choose from endless combinations of shapes, sizes, and colors, and this customization adds little to a manufacturer’s cost even as orders reach mass-production levels.

A big part of the additive advantage is that pieces that used to be molded separately and then assembled can now be produced as one piece in a single run. A simple example is sunglasses: The 3-D process allows the porosity and mixture of plastics to vary in different areas of the frame. The earpieces come out soft and flexible, while the rims holding the lenses are hard. No assembly required.

Printing parts and products also allows them to be designed with more-complex architectures, such as honeycombing within steel panels or geometries previously too fine to mill. Complex mechanical parts—an encased set of gears, for example—can be made without assembly. Additive methods can be used to combine parts and generate far more interior detailing. That’s why GE Aviation has switched to printing the fuel nozzles of certain jet engines. It expects to churn out more than 45,000 of the same design a year, so one might assume that conventional manufacturing methods would be more suitable. But printing technology allows a nozzle that used to be assembled from 20 separately cast parts to be fabricated in one piece. GE says this will cut the cost of manufacturing by 75%.

U.S. hearing aid companies converted to 100% 3-D printing in less than 500 days.

Additive manufacturing can also use multiple printer jets to lay down different materials simultaneously. Thus Optomec and other companies are developing conductive materials and methods of printing microbatteries and electronic circuits directly into or onto the surfaces of consumer electronic devices. Additional applications include medical equipment, transportation assets, aerospace components, measurement devices, telecom infrastructure, and many other “smart” things.

The enormous appeal of limiting assembly work is pushing additive manufacturing equipment to grow ever larger. At the current extreme, the U.S. Department of Defense, Lockheed Martin, Cincinnati Tool Steel, and Oak Ridge National Laboratory are partnering to develop a capability for printing most of the endo- and exoskeletons of jet fighters, including the body, wings, internal structural panels, embedded wiring and antennas, and soon the central load-bearing structure. So-called big area additive manufacturing makes such large-object fabrication possible by using a huge gantry with computerized controls to move the printers into position. When this process has been certified for use, the only assembly required will be the installation of plug-and-play electronics modules for navigation, communications, weaponry, and electronic countermeasure systems in bays created during the printing process. In Iraq and Afghanistan the U.S. military has been using drones from Aurora Flight Sciences, which prints the entire body of these unmanned aerial vehicles—some with wingspans of 132 feet—in one build.

Three-Dimensional Strategy

This brief discussion of additive manufacturing’s advantages suggests how readily companies will embrace the technology—and additional savings in inventory, shipping, and facility costs will make the case even stronger. The clear implication is that managers in companies of all kinds should be working to anticipate how their businesses will adapt on the three strategic levels mentioned above.

Offerings, redesigned.

Product strategy is the answer to that most basic question in business, What will we sell? Companies will need to imagine how their customers could be better served in an era of additive manufacturing. What designs and features will now be possible that were not before? What aspects can be improved because restrictions or delivery delays have been eliminated?

For example, in the aerospace and automotive industries, 3-D printing will most often be used in the pursuit of performance gains. Previously, the fuel efficiency of jet fighters and vehicles could be enhanced by reducing their weight, but this frequently made them less structurally sound. The new technology allows manufacturers to hollow out a part to make it lighter and more fuel-efficient and incorporate internal structures that provide greater tensile strength, durability, and resistance to impact. And new materials that have greater heat and chemical resistance can be used in various spots in a product, as needed.

Operations, reoptimized.

Operations strategy encompasses all the questions of how a company will buy, make, move, and sell goods. The answers will be very different with additive manufacturing. Greater operational efficiency is always a goal, but it can be achieved in many ways. Today most companies contemplating the use of the technology do piecemeal financial analysis of targeted opportunities to swap in 3-D equipment and designs where those can reduce direct costs. Much bigger gains will come when they broaden their analyses to consider the total cost of manufacturing and overhead.

How much could be saved by cutting out assembly steps? Or by slashing inventories through production only in response to actual demand? Or by selling in different ways—for example, direct to consumers via interfaces that allow them to specify any configuration? In a hybrid world of old and new manufacturing methods, producers will have many more options; they will have to decide which components or products to transition over to additive manufacturing, and in what order.

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