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Which industries could additive manufacturing disrupt?

There’s a lot of debate about if and where additive manufacturing technologies (such as 3D printing) will disrupt current manufacturing industries.  Some argue that it’s a low-quality prototyping technology that is unlikely to cause any major change to mass production industries.  For example, a Deloitte report (http://bit.ly/YELqOH) concluded:

“While the technology has several unique applications and is expected to experience considerable growth in the long run, for the foreseeable future it will likely remain a specialized application that for the most part will complement, not replace, traditional forms of production.”

This analysis misses a crucial point that Clayton Christensen didn’t acknowledge until his later books – it’s not enough to focus on the technology; you have to understand the effect on the business model.  I’m working this summer with some very bright students to understand if and where additive manufacturing (AM) will disrupt traditional industries.

Where will AM disrupt traditional industries?  Where there’s the right balance of QUICKLY characteristics:

  • Quality of production needed – can current additive manufacturing technologies produce adequate quality?  In some cases, the answer is already yes.  Plastic, ceramic, and metal parts that don’t need to be especially strong can be made easily now.
  • Improvement potential – is there an opportunity to make the part/assembly better with AM?  Some assemblies are made from multiple parts because of the limitations of current manufacturing technologies.  Some parts are made in a suboptimal way because of manufacturing limitations.  Given that complexity is free with AM and certain geometries are producible only with AM, there’s potential for better parts with AM.
  • Cost of part/assembly – what is cost for 1/10/100/1000 parts?  Some parts require expensive dies or molds that can wear out over time or be expensive to store.  If small volumes are needed of a part, then the cost per part can be very high if produced using traditional technologies.
  • Knowledge needed in repair process – how much expertise is required to repair the product?
  • Level of demand – how many parts are needed per year?
  • Years of product life – how long will repair or replacement parts be needed?  Some products like clothing dryers or aircraft carriers have expected service lives in the decades, and will need spare parts for a long time.

We’re looking for parts where there’s the right balance of QUICKLY characteristics.  I’m sure there’s some company out there that:

  • Sells their product in a very competitive market for very close to production cost.
  • Has customers that keep their products in use for many years.
  • Has customers that require spare parts to keep the product running, but not in very high volumes.
  • Charges a great deal for spare parts, and makes most of their profit on those spare parts and service sales.
  • Has simple enough products that others can learn how to service the product.
  • Whose replacement parts do not need to be especially strong or finely machined.

For an industry to be disrupted, it’s not necessary that all service and repair parts be producible by AM techniques; only that many of the profitable parts be producible.  Take clothing dryers for example:  if the axle that the clothes drum spins around breaks, you won’t make a replacement using AM technologies.  But if an air duct shatters on a 10-year old dryer, it’s very possible that you can make a replacement cheaper and faster with AM.  If enough parts (with enough profits) are like the air duct, and if the dryer manufacturer’s business model depends on the profits from those replacement parts, then we could see a major change in the industry.

The Internet didn’t have to replace all parts of the newspaper to disrupt the industry; just the classified ads (where most of the profit came from).  Similarly, AM doesn’t have to replace all the parts of a clothing dryer to disrupt the industry – just the ones that earn the manufacturer most of its profits.

Posted by David Robertson
On December 18, 2017
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