Additive Manufacturing’s Holy Grail

The holy grail of Additive Manufacturing (AM) is high volume manufacturing.  And the reason is profit. Here’s the governing equation:

(Price – Cost) x Volume = Profit

The idea is to sell products for more than the cost to make them and sell a lot of them.  It’s an intoxicatingly simple proposition. And as long as you look only at the volume – the number of products sold per year – life is good. Just sell more and profits increase.  But for a couple reasons, it’s not that simple. First, volume is a result. Customers buy products only when those products deliver goodness at a reasonable price.  And second, volume delivers profit only when the cost is less than the price.  And there’s the rub with AM.

Here’s a rule – as volume increases, the cost of AM is increasingly higher than traditional manufacturing. This is doubly bad news for AM. Not only is AM more expensive, its profit disadvantage is particularly troubling at high volumes. Here’s another rule – if you’re looking to AM to reduce the cost of a part, look elsewhere. AM is not a bottom-feeder technology.

If you want to create profits with AM, use it to increase price. Use it to develop products that do more and sell for more.  The magic of AM is that it can create novel shapes that cannot be made with traditional technologies. And these novel shapes can create products with increased function that demand a higher price. For example, AM can create parts with internal features like serpentine cooling channels with fine-scale turbulators to remove more heat and enable smaller products or products that weigh less.  Lighter automobiles get better fuel mileage and customers will pay more. And parts that reduce automobile weight are more valuable.  And real estate under the hood is at a premium, and a smaller part creates room for other parts (more function) or frees up design space for new styling, both of which demand a higher price.

Now, back to cost.  There’s one exception to cost rule.  AM can reduce total product cost if it is used to eliminate high cost parts or consolidate multiple parts into a single AM part.  This is difficult to do, but it can be done.  But it takes some non-trivial cost analysis to make the case.  And, because the technology is relatively new, there’s some aversion to adopting AM.  An AM conversion can require a lot of testing and a significant cost reduction to take the risk and make the change.

To win with AM, think more function AND consolidation.  More (or new) function to support a higher price (and increase volume) and reduced cost to increase profit per part. Don’t do one or the other. Do both. That’s what GE did with its AM fuel nozzle in their new aircraft engines. They combined 20 parts into a single unit which weighed 25 percent less than a traditional nozzle and was more than five times as durable. And it reduced fuel consumption (more function, higher price).

AM is well-established in prototyping and becoming more established in low-volume manufacturing.  The holy grail for AM – high volume manufacturing – will become a broad reality as engineers learn how to design products to take advantage of AM’s unique ability to make previously un-makeable shapes and learn to design for radical part consolidation.

More function AND radical part consolidation.  Do both.

Image credit – Les Haines

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Mike Shipulski Mike Shipulski
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