Making Business Sense of 3D Printing

Making Business Sense of 3D Printing
Technology jump starts opportunities for mass customization,
on-demand production and long-tail support
In recent years, there has been a
sudden spike in both interest and
technology maturation of 3D printing.
While the platform technologies of
3D printing are more than 30 years
old, 2012 was the first year in which
3D printers became inexpensive
enough to be used by hobbyists
and smaller businesses to craft
physical objects. Simultaneously,
two supportive groups evolved:
online 3D printing services, such
as ShapeWays, and open source 3D
communities. These groups make
it possible to easily and affordably
create items in a variety of materials,
ranging from low-quality plastics to
metals and ceramics.
Nonetheless, any company with
a supply chain or a store front
should keep close tabs on this
burgeoning technology. Why? The
business opportunities become more
apparent when companies consider
how 3D printing could facilitate
mass customization, unlock new
revenue streams through on-demand
production, and extend support for
the long tail for products or parts
that consumers buy at low volumes.
At this point, we are intrigued by
the opportunities 3D printing may
introduce, and we are monitoring the
development of the technology to
assess for enterprise readiness.
These possibilities also feed
into our latest thinking on how
At the same time, these
technology is interwoven with
advancements bring inevitable
business, as highlighted in seven
questions about whether or not
key trends covered in the Accenture
3D printers could eventually be
Technology Vision 2013. Specifically,
as ubiquitous as paper printers,
3D printing represents a real-world
and raise concerns about how
example of how technology can
these devices could dismantle the
help companies build relationships
manufacturing industry. Like many
at scale—essentially returning to
other hyped-up or early-phase
technologies, some of the predictions treating consumers as individuals
are far-fetched. For the present and through more direct, customized
interactions and tailored services.
immediate future, 3D printers will
In addition, 3D printing provides a
be more like woodworking tools or
mechanism for helping companies
knitting needles—powerful in the
design for analytics by collecting
hands of dedicated hobbyists, but
feedback from customers to support
potentially frustrating for the nonproduct design improvements or
expert 3D printer user.
fuel product innovation.
The true opportunity of 3D printing is the ability for
companies to produce a wide range of objects on
demand, with little or no inventory costs.
One definition of
3D printing is the
additive process of
slowly building a
physical model out of
a polymer material,
layer by layer.
A primer on
3D printing
What is 3D printing? One description is
the additive process of slowly building a
physical model out of a polymer material,
layer by layer. In simpler terms, think of
it as building with blocks, one level at a
time, to form a finished structure. Unlike
rudimentary blocks, however, 3D printing
uses precise modeling technology, semiautomated printing and a variety of
materials to create a final product.
For those who have any knowledge of
additive manufacturing, 3D printing is
not a new concept. The platform for
3D printing began with the 30-year old
technology called rapid prototyping. In this
process, the goal was to build a draft of a
particular part before investing in creating
an expensive mold for a production line.
Rapid prototyping allowed manufacturers
to attain a physical estimate of what a part
or a complete product could look like, and
how it might behave.
Although there were cost-saving benefits
to rapid prototyping, there were also two
major limitations:
1. The material science supporting rapid
prototyping restricted prototypes to one or
two different materials, and the resulting
object was a very rough draft that required
manual sanding, painting and finishing.
Even after manual modification, the physical
limitations of rapid prototyping materials
would not allow true testing of the part
because prototyping materials were typically
a polymer that would melt, scar or break.
2. In addition to physical material limitations,
the equipment required to produce a rapid
prototype was approximately the size of
a car and fairly expensive. The barriers to
owning a machine were usually too large for
rapid prototyping to become attractive to
low-budget innovators, or small- to midsized companies.
In the mid-1980s and 1990s, some
companies bit the cost bullet anyway and
bought equipment to offer rapid prototyping
services. Although this was a sufficient
solution for some organizations, introducing
a third party increased production time, thus
muting the benefits of rapid prototyping.
Fast forward to 2013. Hardware and
software advancements have modernized
rapid prototyping, allowing 3D printing
companies to enter the market. Today’s
3D printers provide more accuracy and
precision than rapid prototyping because
the design of the object is created
separately in 3D software. High-end 3D
printers actually allow multiple materials to
be fused together in one print. For instance,
companies could create a custom tennis
racket handle—both a rigid, supportive
core on the inside and a soft, textured
grip on the outside—all in one printing
session. Although less powerful, we expect
prosumer versions of 3D printers from
companies such as Makerbot® Industries,
LLC will still help to catalyze the industry,
and impact how businesses perceive and
eventually use 3D printing.
Given these factors, it is clear that 3D
printing could have broad business
implications and drive substantial cost
savings in areas like consumer research,
product development, testing (product,
production, consumer, QA), and packaging
and shipping logistics.
New business
from 3D printing
Based on these developments, 3D printing
looks like an exciting business prospect
for many industries, including automotive,
electronics, industrial products and
consumer goods manufacturers, as well
as retailers and other organizations that
depend on a supply chain. However, the real
innovations materialize when companies
consider how 3D printing can jump start
new business opportunities.
Before delving into these, it makes sense to
briefly review a few current manufacturing
realities and the restrictions they impose,
starting with the general rule that massproduced objects are much cheaper
when made in large quantities. Ordinary
toothbrush handles can be injection molded,
and metal screws can be extruded and
threaded more quickly and cost effectively
than they can be 3D printed. Yet, this
efficiency—delivered through repetition and
uniformity—has a downside. To paraphrase
Henry Ford, customers can get whatever
they want, as long as they want what
the machine makes. For many products,
standardization and industrialization is
an adequate and even preferred trait. But
there are also hundreds of products, ranging
from door knobs to prosthetic limbs, where
customization is beneficial.
The second limitation to mass production is
that conventional methods produce literally
millions of objects—frames, toys, coffee
cups, headphones, lawn chairs and the
like—that need to be stored, which can lead
to high inventory costs. Not surprisingly,
it is simply too expensive to mass produce
many objects, such as spare parts to
legacy products, because the demand
is never large enough to warrant the
production costs—along with the ensuing
inventory maintenance. Even in cases
where customers would be willing to pay a
premium, the start-up tooling costs inhibit
one-off production runs. This creates
customer frustration with older products,
and establishes a culture that thinks in
terms of disposal rather than maintenance.
As you might have guessed, 3D printers
are capable of addressing these problems.
The ability to produce objects with
minimal retooling costs means that the
same platform can produce an infinite
range of objects and customizations. The
only costs would be the raw material and
production time. In other words, a single
3D printer could produce a custom tennis
racket grip and a replacement part for a
household oven. This is the true opportunity
of 3D printing: the ability for companies
to produce a wide range of objects on
demand, with little or no inventory costs.
Below are three scenarios to illustrate the
opportunity:mass customization, ondemand production and the very long tail.
Mass customization
Most of the products consumers buy are
parameterized in some way. Shirt sleeves
are a certain length. A golf club grip is a
specific diameter. A drawer handle has a
standard width and spacing between the
screws that fasten it to the drawer. In most
cases, these parameters are established for
the average person, which means that they
are equally inadequate for most people.
Imagine a world where, for a small
premium, customers could set these
parameters to whatever they need or want.
In this scenario, customers in the middle of
a kitchen remodel could select their favorite
drawer handles, and then tweak the length
to better match the style of the kitchen, or
perhaps widen the grip to accommodate
larger hands. If re-facing the cabinets,
these same customers might simply change
the screw spacing to match the holes in
their current cabinets. After the selections
are made and ordered, a supplier would
then 3D print the custom drawer handles,
in the specified material and finish, for
next-day delivery.
This scenario is well within the realm of
possibility because of 3D printers. In the
case of plastic objects, the printers could
be located today at retail stores or thirdparty parts and fulfillment suppliers, ready
to print items in a matter of hours. For
metal and other materials, the printer could
either be placed in the onsite location or
at a more specialized offsite facility. In
either case, the 3D printing production is
relatively straightforward, and the final
cost to customers could be well within
what they would be willing to pay for a
customized product.
However, like many technology advances,
organizations must carefully consider the
dependencies and new processes that mass
customization necessitates. For starters,
the ability to mass customize requires the
designer to parameterize the product. In
this scenario, it is not enough to design
the object and send the computer-aided
design (CAD) file to the manufacturer.
Instead the designer must decide which
attributes can be parameterized, how those
factors relate to each other, and the limits
for each parameter. While this creates
higher development costs, it also opens
the door to a new revenue stream from
customization, greater differentiation and
perhaps a longer shelf life for the product.
As a bonus, when companies enable
customization, they can reduce the need
to create dozens of variations of the
product, thereby shrinking production and
inventory costs.
On-demand production
Many objects exist that are standard
but obsolete, or that are in extremely
low demand but necessary to maintain a
product. For instance, a refrigerator that
costs thousands of dollars can be rendered
useless if a small plastic door stop breaks.
And a classic car could lose significant
value if the heater lever bends.
Due to this need, some specialty suppliers
maintain an inventory of small parts to
support maintenance or other demands.
When such a part is ordered, the supplier
needs to find, package and ship the item.
For many such parts, the associated costs
outweigh the benefits of keeping them
in storage, leading to shorter lifetimes
for unmaintainable products—and fueling
consumer beliefs that it is cheaper to toss
an item than to fix it.
Instead, imagine that the parts catalog for
an object is entirely virtual, made up of sets
of 3D files that can be printed on demand.
Because the inventory is virtual, it would
cost very little to offer customers an everexpanding catalog of older parts. When
customers needed a part, they would select
the product online or in a store. Suppliers
would then print and send the ordered
parts directly to the customers with no
storage costs or shrinkage due to loss or
inefficient sorting.
This is a win-win situation, as customers
would have access to a much wider
assortment of products and a means to fix
broken objects, while suppliers would save
on both production and storage costs. On
a percentage basis, the production costs
might be dramatically more expensive than
a mass-produced version, but the overall
costs would still be within the bounds of
what customers would expect to pay for an
obsolete part.
Similar to mass customization, the major
shift for companies is in how the content
is managed. For many businesses, the
transition from warehousing to on-demand
production requires changes in how they
think about their products and how they
provide access to the files that describe
those products. On-demand production also
represents at least a partial switch from a
distribution center- to a production centermindset, and also introduces opportunities
to move production closer to the endpoint.
For instance, an industrial equipment
manufacturer could send a 3D printer into
the field to produce objects as needed,
rather than handling logistics and incurring
shipping costs for regularly mailing plastic
or metal replacement parts.
The very long tail
The term ‘long tail’ was coined to represent
the large set of products that consumers
buy at very low volumes. The Internet
is credited with making it possible and
economical to distribute these items., Inc and eBay Inc. are two
of the many conduits to connect buyers
with low-volume products in ways that
stores and paper catalogs cannot. With the
rapid advancement of 3D printing, we are
entering an era in which it is possible and
economical to produce products at a low
volume and with mass customization. In
other words, 3D printing can make the long
tail much longer and reduce distribution
costs in the process.
In doing so, 3D printers have the capacity
to change the definition of obsolescence, as
well as the level of control that customers
have over their products. This is similar to
recent shifts in digital goods. For example,
eBooks have transformed publishing so
that it no longer makes sense for a book
to go out of print; digital music gives
consumers greater control over their music
library and personalized playlists without
having to store CDs. The ability to produce
on demand, and to customize the product
when needed, shows how those same ideas
can now be applied to the world of physical
The concept of the very long tail has two
ramifications on the business side.First,
organizations would need to identify
which products make sense to print and
then define a business process to fulfill
occasional requests. This might require
handing over CAD files or legacy product
catalogs to a third-party supplier for 3D
printing and distribution.Second, on the
product development side, businesses have
an opportunity shift towards sustainable
design practices—moving from designing
for complete part replacement, to designing
for part component replacement. In this
latter option, new lucrative revenue streams
might emerge. For example, a computer or
tablet manufacturer could partner with a
national retail chain to supply 3D printing
and repair services that would not only
extend a product lifetime but also reduce
electronic waste.
Be ready for
3D printing
At the moment, 3D printing is a
specialized and emerging technology,
being experimented with by a few Fortune
500 companies but largely still a hobbyistdriven movement supported by small,
entrepreneurial companies like ShapeWays,
Inc. and communities like Makerbot’s
Thingiverse a Makerbot® Industries, LLC
However, the potential impact of these
converging ideas to the business community
is tangibly developing quicker than
companies may think. In time, 3D printing
could essentially turn manufacturing
paradigms on their head—moving from
mass production and little personalization,
to mass customization and on-demand
production at scale.
In response, manufacturers should be
exploring the business benefits of 3D
printing and its impact on all stages of the
supply chain, as well as how to incorporate
3D printing into the manufacturing model.
Designers should be thinking about how to
put more power in the hands of customers
where appropriate, to not only support
custom needs but also allow customers to
take products in entirely new directions.
And businesses should be thinking about
the very long tail and what obsolescence
means in terms of the environmental
impact of their products.
For the conceivable future, the bulk of the
products consumers buy will continue to
be mass produced. Mass customization
will be reserved for the special cases,
where the customer is looking for more
personalization in a new product or
longevity in an old one. However, it is these
special cases that drive brand loyalty, build
deeper customer relationships and delight
the customer in unexpected ways.
In time, 3D
printing could turn
paradigms on their
head—moving from
mass production and
little personalization,
to mass customization
and on-demand
production at scale.
Lastly, unlike traditional production
processes, 3D printing has a lower entry
cost for new players. A business that does
not support a long tail of products may
eventually be beaten by a long line of
competitors, or perhaps even a community
of hobbyists who are moonlighting as peerto-peer service providers.
About Accenture
Kelly Dempski
[email protected]
Accenture is a global management
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