Additive manufacturing has been described as technology that will revolutionize manufacturing. It will also have a significant impact on business models.
Progress with additive manufacturing is giving rise to entirely new opportunities for meeting customer needs, generating new revenue streams for them and advancing their positions in the market.
“There was a lot of hype about this in the early years, with exaggerated expectations. But there has been much progress with additive manufacturing since then and it has matured. New applications for it are being identified all the time,” says Seyed Hosseini, Head of the AM-center at RISE.
The principle of adding materials, layer by layer, based on coordinates that are dictated by a digital file (rather than trimming and shaping) undeniably offers many advantages.
- It is possible to manufacture individual models without needing new tools (for testing purposes or custom items to meet individual needs).
- The cost is the same regardless of whether you are manufacturing 20 different variants of a product or 20 that are the same.
- In the past, you may have needed a dozen, or even a hundred components to put together a product or part of a product. Now, however, it can all be done immediately, with an end result that is much more durable as well.
- There is no material waste from the manufacturing process.
- Designs can be much more resource efficient, with end products that are lighter in weight by using advanced geometry for increased strength.
- In the past, this was either impossible or excessively expensive. Now though, advanced geometry can be used for design purposes, without it costing more.
Ideas for business models
Companies that want to be at the forefront rather than lagging behind should ask themselves this question: How might this technology lead to new business models in our industry and for us?
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Here are some ideas for business models that could become more common in the future as additive technology continues to gain ground.
“The opportunities that exist vary quite a lot depending on the industry, since the technology has made more progress with some types of materials and manufacturing scenarios than others. Additive manufacturing in plastic or metal has made the most progress. But it is also possible to manufacture items in other materials, such as concrete and ceramics.
1. New products without major investments
New products can be created without the conventionally excessive start-up costs. Specially designed machines and tools, with the major investment costs required for that, are not needed with additive technology. As soon as a product design is ready, the computer files can be sent to a service provider specializing in 3D technology. Products or components can be printed in just a few hours. So, you no longer need access to a factory, machinery and equipment to develop a new component or start up small-scale manufacturing. It means that opportunities for manufacturing components have become more accessible to everyone.
It is a paradigm shift similar to what happened in the music industry. In the 1900s, artists were more or less dependent on record companies to record their songs, make LPs or CDs and then market it all. Today’s artists, however, can take on the entire production process themselves and reach a worldwide audience right from the kitchen table!
Things to think about: Additive manufacturing lowers the threshold for manufacturing new products. What impact might that have on our industry? What will happen if customers suddenly take over the manufacturing themselves for products you have had sole responsibility for all these years?
2. Products becoming services
For many generations already, our economic success has been based on a linear model whereby we manufacture things that we use and then discard (often referred to as the “throw-away society”). The transition to a circular economy involves a much lower consumption of natural resources in that materials circulate in one of four ways: reuse, restore, upgrade or recycle. The value of products can thus be significantly prolonged and companies can generate profitability by allowing customers to subscribe for a product’s function, rather than buying the product itself as a new item.
It opens up opportunities for business models with a lower need for manufactured products but higher requirements on strength, durability and an optimal design with minimal material consumption. Additive manufacturing facilitates component manufacturing with the lowest possible materials consumption at the same or even higher level of sustainability.
Companies will identify new business models in the circular economy and additive manufacturing will play an important role in helping us make that shift.
Things to think about: What will the product-to-service transition look like for you?
3. Simplify your supply chain and make it more resilient
Many of today’s products are a composition of smaller components that have been assembled or connected in some way. And those components were manufactured by different machines, using different methods, at different locations and by different suppliers who are part of a global network. For the final assembly, screws, welding or some other method were then used to put it all together as the end product. Suppliers have become more or less specialized, manufacturing high volumes of individual components using specialized equipment in a global market. Additive manufacturing facilitates new ways of thinking, which opens up new opportunities. The geometric freedom that it offers means that several composite components can be manufactured together in a single composite product. Accordingly, the number of suppliers can be radically reduced, which leads to higher delivery precision and fewer assembly stations. It also reduces the number of freight receipts, quality controls and inventory needs, as well as simplifying the purchasing process with a unique opportunity for local distributed manufacturing. All of it results in a distributed, resilient manufacturing process.
Things to think about: What does the company’s entire purchasing process actually cost? What if there were fewer suppliers and you had more control over the design? How might that impact development opportunities for the product? How do you value security of supply?
4. New opportunities for taking product customization to entirely new levels
Many customized products, such as hearing implants, are already being manufactured using additive manufacturing. But what if customers could customize other things, like the instrument panel on their cars? Or, what if you could design a car that weighed half as much? Additive manufacturing opens up a new world of freedom in terms of how products can be designed.
Things to think about: With the higher level of design freedom that additive manufacturing offers, what will you be able to create for your target group and product segment? What are the customer groups and needs you are currently unable to meet with today’s manufacturing?
5. Rethinking everything about spare parts
No longer will it be necessary to keep spare parts in inventory, which takes up room and ties up capital. They can be manufactured on demand instead. With additive manufacturing, it will even be possible to manufacture spare parts for products sold 10-30 years ago, provided that the drawings are available in a digital format.
Things to think about: How can you lower costs and create new business by offering to print spare parts and accessories?