In a Brief on 3D printing a couple of months ago we discussed the technology in general and its implications for the spare parts business, which for most OEMs accounts for the bulk of service profits.
We concluded then as follows:
3D printing and consequently on-demand, on-site manufacturing and fabrication is becoming mainstream. Given increasing R&D investment, both by users and 3D printing OEMs (including market entry announcements from major companies, such as Hewlett Packard or Epson, which may restructure the industry as well as accelerate innovation, capabilities and applications) and given current cost and capability trajectories, a significant number of products, components and parts will be manufactured using 3D printing over the next 5-10 years -initially in industries that make use of expensive materials and small production runs, later in others -even key component industries such as bearings. This creates the need to develop business models and strategies both for the new product market as well as for the after-market, in particular spare parts, which account for a very significant part of OEMs service profits. What these business models will be like is still unknown, as is what role third party suppliers / designers or “platform providers” may eventually come to play with parallels to what happened in the book publishing or music industry (or what is happening in 3D consumer markets today), which were characterized by significant price pressures (on OEM equivalents) and therefore substantial reduction in margins.
Today we want to highlight a couple of new developments:
A few weeks ago Carbon3D, a California based company, demonstrated a new 3D printing technology that speeds up the “making” process up to 100-fold. Continuous Liquid Interface Production, or CLIP, works by shooting beams of light and streams of oxygen through a bed of light-curable resin. The light hardens certain areas of the resin, while the oxygen prevents other areas from curing. By carefully controlling the oxygen that is allowed into the resin pool, the Carbon3D printer can grow objects anywhere between 25 to 100 times faster than traditional layer by layer 3D printing. The product applications are very broad. Apart from making the process fast enough for mainstream manufacturing, CLIP reduces or eliminates various 3D printing defects and shortcomings and allows the process to use materials that are self curing or flexible and can achieve significant ranges of stiffness, strength, and volume.
In another development Sheffield University (UK) engineers reported that they are building a US $ 1.5 million 3D printer capable of printing plastic parts as fast as a production line. The technology, called High-Speed Sintering (HSS) utilises infa-red light and ink to achieve the result, printing the infa-red-absorbent ink onto powder, and then using the light to heat only the printed areas. Parts are printed in seconds rather than hours, the biggest part would be as large as a washing machine. The university’s aim is to license the new technology to industrial 3D printer makers. Voxeljet, a German maker of 3D printers, is among those taking it up and hopes to have an HSS machine for sale by 2017 or 2018.
The cost sides of both technologies are not yet fully clear, however the learning curves appear to be steep and costs are expected to come down fast, as other companies put resources into improving the technologies. For example GE has steadily expanded the number of 3D printed parts in jet engines and recently demonstrated a 3D printed functional model jet engine using Direct Metal Laser Melting (DMLM) technology.
These and other developments strengthen our conviction that the spare parts market is already starting to be disrupted, for now in terms of designing and producing parts that actually improve performance of machines in a cost efficient way and later the whole parts logistics value chain. It is not at all certain that OEMs will have a strategic advantage in the new model, in fact it may offer significant opportunities for new specialists. We will get back to this topic in future posts.