Building an additive manufacturing business case

There is a disconnect between the technical and commercial understanding of additive manufacturing (AM). At least, that’s the assessment from Innovate UK and The British Standards Institution, and the motivation behind a new document that looks at the key factors in determining a business case for AM.

“Engineers are talking about how wonderful additive manufacturing is and not realising that what the commercial people want to hear about is the return on the investment, the risk, and so on,” AM industry consultant Dr Phil Reeves, technical author on a new PAS (Publicly Available Specification), said in a recent conversation with TCT. “But equally, the people in a commercial position don’t understand the technical nuances of additive manufacturing and the risk associated with it. The idea was to develop a common framework that an engineer could write a business case for investment and know that what they were putting in was what the finance director was going to want to read. Equally, the finance director could have a proposal land on their desk and use PAS 6001 as a frame of reference.”

In the last issue of TCT, Reeves shared how, in the near two decades he has been delivering AM strategy consultancy, he has seen his fair share of “investment train wrecks”; those companies which had adopted AM based on uneducated technology purchases and lofty promises, and on the opposite end, engineers whose technology and application due diligence had been undermined in favour of “more cost effective” alternatives.

Together with Robin Wilson, Lead Technologist at Innovate UK, Reeves has concluded, “That lack of a common framework has stopped companies in the UK from actually investing in additive manufacturing.”

To combat that, PAS 6001:2020 was created. It’s a freely available document published through the BSI with backing from Innovate UK, which, depending on feedback, could go on to become a full BSI-recognised British Standard. Together with a steering group consisting of 3D printing service providers, users, universities and finance experts, this PAS is designed to provide guidance to companies of any size as they look to develop a 3D printing business case.

During early conversations, Reeves shared how there were two key routes established around why people use 3D printing: to make money or to save money. To build a business case, companies must first decide which their ambitions fall under. Are they going to focus on making super optimised components which can be sold to customers for a premium or look towards those less flashy applications like manufacturing aids to increase productivity and savings on a production line?

Read moreUnderstanding the investment case for additive manufacturing – by Phil Reeves

An observation Reeves offered was that manufacturers tend to gravitate towards the former and fail to recognise some of that low hanging fruit. Either way, businesses need to ensure they’re employing the right teams, champions and education.

This PAS sets out the key benefits of AM, the kind those well-versed in the technology will be more than familiar with such as geometric freedom, smarter parts, tool-less manufacture, part consolidation, customisation and repair, alongside its limitations around productivity, economics, materials and certification.

The starting point, Reeves says, is to look at the eight waste streams of lean manufacturing, which PAS 6001 neatly outlines alongside how AM could be used to increase profitability and operational efficiency in each. This understanding is so fundamental in fact, Reeves suggests that companies planning on sending their design staff to TCT 3Sixty this September should perhaps think about sending their lean manufacturing experts instead.

“Let them understand how you can apply this technology to the reduction of wastes in lean,” he says, “whether it’s solving those problems on the shop floor or whether it’s getting rid of that inventory excess.”

While the most evident audience for this PAS will be those companies looking to adopt AM for the first time, Reeves said PAS 6001 has received positive feedback from some unexpected groups such as machine resellers who are using the document to help potential customers communicate with budget holders, and also AM vendors who have adopted the framework to educate staff on a strategic level. But it was the involvement of Royal Bank of Scotland that brought up some interesting takeaways in relation to costs associated with AM hardware implementation.

“The perceived residual value of a 3D printer is very low by the financial community because we, as an industry, are constantly talking about innovation, innovation, innovation so when you look at it from the outside in it almost looks like if I was to buy a 3D printer today it will be out of date tomorrow,” Reeves explained. “So, actually, the interest rates are going to be really, really high, the risk profile is really high and it’s completely false because I know people who are running 15-year-old 3D printers and making money with them. There is a bit of a mismatch in the industry; we’re pushing innovation and the next great thing, and actually, we’re doing it at the detriment of people being able to actually get money to buy these things.”

As TCT’s Senior Content Producer Sam Davies reiterated in his Editor’s Letter at the top of this issue, the past year has presented some thought-provoking opportunities for AM whether in overcoming supply chain challenges or the rapid development of new, emergency products during the pandemic. It was a learning curve, for sure, but while Reeves rationalises that AM was in no way a saviour, these kinds of applications have platformed AM’s advantages in terms of its flexibility, production times and costs. Reeves uses the example of a company in the U.S. which onboarded a fleet of 3D printers to produce millions of COVID-19 testing swabs. The question now is, what do companies with a similar story do with that dormant technology?

“It showed them what’s involved in actually making 4 million products that are medical devices,” Reeves said. “There’s loads of learning from that and now they’re thinking ‘Okay, what other medical devices can we now go into manufacturing?’”

For companies looking to start their own journey, Reeves hopes PAS 6001 will provide a solid foundation to steer clear of those hasty “investment train wrecks” and confidently adopt AM into their businesses.

“What I ultimately would love to happen from this document is that it influences the right technology investment decisions,” Reeves concluded. “Not just technology investments, the right ones.”

Download PAS 6001 here:

Want to discuss? Join the conversation on the Additive Manufacturing Global Community Discord.  

Get your FREE print subscription to TCT Magazine.

Source link

Show More

Related Articles

Leave a Reply

Your email address will not be published.