What it is and the value it drives
Perfectly fitted prostheses, replacement parts for antique cars, fully personalized earbuds, instantly delivered. In an era of mass production, customization is a luxury that comes with a premium of price and time. Additive manufacturing is poised to upend this perception and revolutionize the way goods are designed, tested, and produced, well beyond consumer products.
Additive manufacturing, also known as 3D printing, is the construction of a 3-dimensional object from a digital model. Such models are at the center of the expanding ecosystem of digital production, which comprises technologies to create models from real-world objects (3D scanning), manipulate them (Computer-Aided Design or CAD), and turn them into reality. 3D printing is an example of this last step, and has been gaining popularity for its promise of speed, efficiency, and flexibility.
Several technologies fall under the umbrella of additive manufacturing, differing by the materials used and the techniques used to shape and consolidate raw materials into finished objects. The point that all 3D-printing technologies have in common is the idea of starting from an empty stage, to which exactly the amount of material of the finished product is added layer by layer, hence the name “additive manufacturing”. This stands in contrast to subtractive manufacturing techniques, where a block of raw material is progressively reduced to its final shape, as is the case with laser cutting or sculpting.
The leading use cases for additive manufacturing are prototyping and proofs of concept, followed by tooling. Non-mass production has also been growing, e.g., for jewelry or specialized high-value/low-volume components, while mass production, on the other hand, has only begun in recent years and is still a relatively niche application.
Polymers, as well as metals and alloys, are the most common materials used in 3D printing. The former are most commonly used for prototypes and end products with lower performance requirements; the latter are being increasingly used in the final production of industrial components. Besides metals and polymers, other materials are currently filling smaller and more specialized areas, such as ceramics, laywood, paper, wax, food, and biocells.
The benefits of 3D printing can be summarized along four dimensions: product performance, customization, time to market, and prevention of obsolescence.
Product performance. Product enhancements are achieved by the possibility of creating higher-performing products with less weight, fewer components, and new features.
Customization. The efficiency of 3D printing in manufacturing custom-made products enables cost-effective customization. In turn, this capability allows for better-fitting industrial solutions, and increased customer satisfaction in the consumer sector.
Time to market. In manufacturing, fast prototypes and design adjustments enable a faster time to market, as well as a more flexible and efficient manufacturing process and a greatly simplified supply chain.
Prevention of obsolescence. Long-lasting assets, such as oil rigs, airplanes, or military equipment, often face the issue of spare parts no longer being available, due to products being discontinued or suppliers going out of business over time. Consequently, equipment of considerable value needs to be fully replaced every year. Custom-printed components would eliminate this issue and realize significant cost savings over time.
Where it is today
The first instance of additive manufacturing was patented in the 1970s, and 3D Systems, the first company to use 3D printing commercially, was established in 1986. In 2019, there were over 1,300 companies worldwide deploying additive manufacturing, creating a market estimated to be worth $16 billion in 2020.
Different business models capture different segments along the 3D-printing value chain. A flow from source to product involves materials suppliers, equipment providers, system manufacturers, service providers (both as design support or full service), and integrated players. Finally, recycling providers close the loop by specializing in the reuse of excess material.
Although less "visible" than machines themselves, software is a key component of 3D printing across the value chain and has been a key driver for widespread adoption and continuous quality improvement.
Looking at the competitive landscape, 20% of global companies are established players in additive manufacturing, 42% are traditional industrial firms, and 38% are relatively new to the market.
The US and Germany are the leading countries by number of 3D printing companies, with Europe hosting 55% of global players. Asia, with only 13% of global companies, is a much less saturated market. Japanese players, such as DMG Mori, Yamazaki Mazak, and Matsuura, have been developing exciting additive and milling hybrid machines, focused on metal manufacturing.
The Japanese market for 3D printers was ¥15.2 billion in 2017, accounting for just 4.3% of the global market, with an expected yearly growth of 9% through to 2021. Japan’s relatively slow growth to date is likely due to low general public awareness of 3D printing, as well as limited exposure to information around industrial use cases. In manufacturing, and especially in molding, a sector which comprises many small and medium enterprises, industrial applications of 3D printing have been hampered by the high cost of machines and the time and knowledge required for customization.
As mentioned earlier, the most common application of additive manufacturing is building prototypes. Beyond R&D, 3D printing has found several use cases across a variety of industries.
Aerospace. 3D printing has unlocked cost reductions through lighter components and the elimination of material waste and has enabled faster maintenance. In 2017, GE Aviation completed prototype testing of the Future Affordable Turbine Engine (FATE) engine, designed and produced with additive manufacturing; compared to current engines in the field, it reduces fuel consumption by 35% while cutting production and maintenance expenses by 45%. In 2020, Airbus announced it had standardized production of cabin parts with ULTEM Resin, leveraging an additive manufacturing solution provided by Stratasys.
Automotive. Auto players can leverage additive manufacturing to customize the appearance of vehicles and reduce the sourcing time for special parts. Volvo Construction Equipment slashed tooling costs by 3D printing functional prototypes for its A25G/A30G haulers, which yielded a 90% time saving from shorter lead time and 92% cost saving on tooling investments.
Healthcare. In healthcare, dental prosthetic creation and restoration are some of the most common applications of additive manufacturing. The production cost of dentures is reduced by 50%, and time cut from 2-3 weeks to 2-3 days. Moreover, the technology permits simulation of complex tooth geometry with good patient fit at no additional cost. Other use cases involve custom-made dental braces, hearing aids, and even prosthetic knees.
Oil and gas. 3D printing can be used to produce spare parts and achieve simpler designs. In the design phase of its deepest water installations, Shell Global used 3D-printed buoy prototypes, which resulted in faster iterations in building functional proofs of concept to receive regulatory approval.
Industrial use cases such as these have been fundamental to demonstrate the value of additive manufacturing and encourage the deployment of the significant technology and capital required. Especially in the aerospace and healthcare sectors, the US has found "champions" of 3D printing in companies such as Boeing and GE, with enough influence on the supply chain to foster technology development and adoption. Similar impetus from leading manufacturers is needed to catalyze wider adoption in Japan.
How the technology will continue to evolve
Even though there is no one clear winning technology at present, 3D printing is set to improve steadily in speed, precision, and cost efficiency. Technical innovation is being driven by companies such as Carbon, Desktop Metal, and HP. Moreover, the range of materials available will increase across polymers, metals, and rarer materials.
From a software and process perspective, the lack of established software platforms presents a barrier to large-scale adoption. But more end-to-end platforms are likely to emerge, in line with the growth of integrated additive manufacturer players.
The key future applications
Industrial 3D printing applications are expected to concentrate in the aerospace, healthcare, consumer, and automotive sectors. Players in aerospace and healthcare have already started integrating additive manufacturing into their supply chain, and other industries are likely to follow depending on their investment capabilities.
Building on technology improvements, there are four main drivers of adoption growth.
First, the improving economics of additive manufacturing will encourage adoption, with the price of polymers and metal ingredients expected to decline between 50% and 60% respectively by 2025.
Second, 3D printing can in many cases address industry's need for further manufacturing efficiency: rapid prototyping and on-site production can create shorter lead times for customers, while reducing waste.
Third, the potential for enhanced functionality will motivate more businesses to explore 3D printing as a solution. Even with current technology, more complex or lightweight structures can be produced with reduced design and assembly time.
Fourth, the demand for mass customization will support the adoption of this technology. Research shows that customers are willing to wait longer and pay a price premium for build-to-order products such as clothing and accessories, and report a high NPS (Net Promoter Score).
The absence of an established, fully end-to-end technology platform constitutes a barrier to broad adoption in industrial manufacturing. The key opportunity for companies lies not in making further technological advances but in establishing process management practices that allow for industrial-level repeatable quality.
Only a few players globally have been able to achieve additive manufacturing at scale: for example, Stryker in medical products, Adidas in retail, Boeing in aerospace, and GE Additive and Siemens across industries. The common recipe for success has been to create a business case focused on select products, and then design a dedicated factory to support production.
Given the amount of customization required, there is a large opportunity for players to create blueprints for future factories, and synergies between players specializing in 3D printing and experienced manufacturers could be the key.
With its globally significant manufacturing industry, Japan has scope to increase its presence in additive manufacturing. One strategy for domestic manufacturers to unlock the value-add of 3D printing would be to partner with international service providers, leveraging world-class printing technology in combination with their own industrial-standard manufacturing processes.