Executive summary
Although 3D printing has captured imaginations everywhere and is moving toward the mainstream in making plastic components, it has yet to take off in mass production of metal parts. However, we believe this is changing rapidly. We expect metals 3D printing to disrupt many existing manufacturing processes and to become a fundamental part of how metal products are made in the digital age.
The technology — also known as additive manufacturing (AM) — has formidable potential across the manufacturing landscape. It enables products to be made on demand, at point-of-use, and with very efficient material usage. The metals share of the market is very small now, but it is expected to grow at 20 percent compounded annually, almost twice as fast as more mature plastics AM, and faster than traditional manufacturing.
While AM’s primary use to date is in rapid prototyping, tooling, and production of replacement parts, leading practitioners are shifting their ideas about the technique. Increasingly, they see it not only as a substitute for traditional production techniques but also as a way of rethinking the supply chain to unlock substantial value. They also see that AM can scale cost-efficiently to serve high-volume needs.
Today there are three primary metals AM technologies: powder bed; deposition; and binder jet, all at different stages of maturity and capability. PwC sees a distinct metals AM supply chain taking shape: material suppliers developing unique powder alloys; machine manufacturers; software suppliers; services businesses to help industry learn how to gain value from AM; and AM machine operators.
Acknowledging AM’s well-known benefits to the supply chain, PwC emphasizes its potential to optimize functional design and leverage materials properties. For example, AM can sharply reduce component weight and cut parts counts — improving the performance of the systems into which AM-made parts are assembled.
To date, these types of value propositions in metals have involved complex, low-volume parts, but PwC’s analysis suggests that the same economic arguments can apply to simple metal parts that have relatively low design costs and higher volumes. The economics of AM start to look far more favorable when the technique is viewed as more than an isolated production stage. To help manufacturing business leaders identify where metals AM offers them the greatest economic value, PwC pinpoints five value propositions, from the high impact of system value and performance (entailing the redesign of an entire production system) to the downstream impacts on the service and aftermarket supply chains.
Recognizing that metals AM is still relatively expensive, PwC breaks down AM costs compared with those of traditional manufacturing for two types of aerospace parts, and flags some of the strategic questions that business leaders must ask themselves if they are to understand how to integrate AM into their supply chains.
Toward a new economic model for metals manufacturing
Most manufacturers are still at the experimentation stage with AM. It’s not yet clear how they should, or can, integrate the technique into their established production setups. The transition is not simple. It begs a strategic company-wide decision that calls for alignment of the entire enterprise. That extends to the company’s investment choices, the extent to which it has (or can rapidly develop) an innovation mindset, and its ability to plan for risk contingencies.
Some of the most pressing questions that manufacturing business leaders must consider include:
- What types of parts can be additively manufactured? What are the economic benefits?
- What is AM’s impact on our business strategy and operating model?
- Should the AM strategy be centralized or distributed across our business?
- Who should produce the components/systems (OEMs, Tier 1s, service bureaus)?
- What is the impact of AM on the structure of our supply chain?
- What are the regulatory considerations and barriers to overcome?
- What is the best way to get started?
Before moving to AM, companies must first understand where they can expect the greatest economic advantage. They need a kind of “additive in a box” economic model — an easy-to-use diagnostic tool that quickly enables manufacturing executives to shortlist the types of components that might best lend themselves to AM. At the same time, manufacturers need to pull back to think strategically about how to design the optimal AM operating model. Part of that exercise calls for identifying the business capabilities needed to infuse a new technology into traditional business models.
As metals AM continues to evolve, manufacturing industries will embrace the technology as a fundamental and critical part of the value chain. That point is getting closer by the day — unlocking more and more value as it does so, en route to fundamentally changing the way we manufacture.
