Digital Transformation Monitor

The disruptive natureof 3D printing

January 2017

Internal Market,Industry,Entrepreneurshipand SMEs

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© Alexander Tolstykh/Shutterstock.com

The disruptive natureof 3D printing:offering new opportunitiesfor verticals

Significant advances in additive manufacturing (AM) technologies, commonly known as 3D printing, over the pastdecade have transformed the ways in which products are designed, developed, manufactured, and distributed. 3Dprinting’s ability and advantages over traditional manufacturing open plenty of opportunities for verticals, spanningfrom product design and development, customization service, to restructuring of supply chain for higher efficiency.

Workflow optimisation

Workflow and process are expected to bestreamlined, as a result of all theaforementioned advantages. AdditiveManufacture processes are viewed asgenerating less scrap and using fewertools than traditional manufacturing.Meanwhile, it is capable of reducingiterative process, assembly and possiblyinventory. Consequently substantialoperational cost benefits can beanticipated.

Revolution in object creation

3D printing (3DP), included in thebroader term of ‘Additive Manufacture’(AM), refers to the various processesused in the manufacture of products, bydepositing or fusing materials layer bylayer. The 3D-printing process can,though, date back to the 1980s, whenadditive manufacturing (AM) waspractised for rapid prototyping inindustrial applications.

Disruptive nature

3D printing holds huge potential todisrupt the way in which a product couldbe designed, developed andmanufactured.

Intricate product design

3D printed parts allows them to bedesigned with more complexarchitectures whereas with littleadditional costs, for example, thestructure with hollowing, holes, atypicalshapes or rich interior details. Inaddition, some pieces that used to bemolded separately and then assembledcan now be produced as one piece in asingle run, even for some precisioncomponents.

Flexibility and customisation

3D printing allows much more flexibilitythan standard manufacturing, becauseeach unit is built independently,

Democratisation of3D printing isunderway

1Cost-effective low volume production

3D printing also reduces the reliance oneconomies of scale, since it makesproducing thousands items as cheap asproducing single. 3D printing is thusviable for low to medium-volumeproduction without higher initialinvestments for tooling and setup. Notbeing a replacement solution for thetime being, 3D printing does provide anadditional, financially responsible optionfor manufacturing.

3D printing applications

3D printing’s ability and advantagesover traditional manufacturing make it anatural fit for many verticals for variouspurposes, with aerospace, automotive,medical and many other industrialproducts leading the adoption.

Rapid prototyping still dominates

A PwC survey1 of industrialmanufacturers reveals that more thantwo-thirds were already using 3Dprinting. Most were using it for rapidprototyping or experimenting. Otherapplications include customisedproduction in low volume, and productinnovation that cannot be achieved using

Source: GE

Figure 1: 3D printed fuel nozzle byGE

Source: PwC analysis of ZPryme Research survey data, 2015

Figure 2: The adoption of 3D printing regarding different applications

therefore modification or improvementcan be made much easier and involvingfar fewer stages. For this reason 3Dprinting has been vastly used for fastprototyping and product customization.

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The disruptive nature of 3D printing: offering new opportunities for verticals

A strong uptrend in market growth

3D printing industry is growing rapidly.The previous three years saw a CAGRgrowth of 33.8%, according to WohlersReport3. The total AM products andservices worldwide grew at a CompoundAnnual Growth Rate (CAGR) of 25.9% toapproximately 4.8 billion EUR in 2015.This was the second consecutive yearthat 3D printing industry grew by nearlyone billion EUR.

Nearly half of market value4 iscontributed by 3DP systems, and thistrend seems to continue in the following10 years (estimated 48.1% in 2023). Thethree system manufacturers - Stratasys,3D Systems and EOS, account for nearly70% of the total 3DP systems market.

3D printing in healthcare industry

Rapid production of implants andprosthetics

3DP has been used successfully to makeboth standard and customised hearingaid shell, dental implants and prosthetic

limbs, sometimes within 24 hours.Previously, implants had to be validatedbefore being used clinically, which isvery time-consuming. Today, 99% ofhearing aids are manufactured with 3DP.

Surgical planning and tools

3DP has created applications thatprevious technologies are incapable toachieve - surgical planning andassistance. 3D printed anatomicalmodels allow surgeons to properlyunderstand organs’ internal structure.

In addition, surgical guides with a bettervisualisation assist surgeons to plandetailed surgical procedures. As a result,it increases the clinical efficacy, lowersthe surgical risk from errors, andproduces better outcomes for patients.More than 70,000 surgical guide unitswere produced in 2013 with AM.

3D bio-printing

Looking further, some 3D biomedicalsystems are already capable of printingcells, proteins and organs. Currentresearch interest mainly resides in bio-printing of skins and organs, includingthe production of bone and cartilagescaffolds, ligament and tendon scaffolds.

Although still in its infancy, 3D bio-printing offers additional advantagesover the traditional regenerativemethod, particularly in bone and scaffoldregeneration, such as highly precise cellplacement and high digital control ofspeed, resolution, cell concentration anddrop volume. Various materials areavailable to build the scaffolds,depending on the desired strength,porosity and type of tissue.

Radicaltransformationof verticals

traditional methods. Using 3DP for finalparts production was seen a significantincrease, however, remains marginal,mainly due to relatively low throughputrate and printing quality.

Demand for diversified usages

Outside the industries, a survey ofSculpteo2 shows the full extent of theintegration of 3DP in professionalsettings. Fast prototype (55%) remainsthe primary application while proof-of-concept (29%) follows its lead.Diversified applications also includehobbies, production, education andmore. Production (24%) is among mainpurposes for 3D printing, confirming thatdemand is present but requires priorexperience to leverage its full potential.

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Source: 3DPrint.com

Figure 4: 3D printed heart model forheart repair surgery

EUR 9.64 billion 3

By 2021, 3D printingmarket is estimatedto reach

3D printing in automotive industry

Automakers have been using AM for overtwo decades, and today are progressingto a variety of applications, ranging fromdesign, development, tooling and rapidmanufacturing.

Accelerated prototyping

Automakers began the use of AM fromrapid prototyping,. It has been widelyintegrated into the product developmentcycle to speed up this process. It alsoallows the test-of-concept far less costlyby creating multiple product iterationsvery quickly.

Rapid manufacturing of functional parts

Some functional parts of vehicles can beprinted directly, without moulding andassembling procedures. The service istypically applied for high-end cars, forexample, sport cars components. In thelong run, a replacement parts may be“printed” upon request, either by theautomaker or a tier with 3DP services.

BMW 3D-printed water pump wheel forits German Touring Car Masters racecarsin 2015. BMW states, with 3DP, this high-precision part is available within only afew days, and the demand-orientedproduction becomes more cost-effective.

Valued-added service: car customisation

3DP is also being used to produce thepersonalized car components, such ascar body with different materials andforms options, or car accessories.

Customers will benefit from decreasedlead times. A Japanese automaker,Daihats allows buyer to order 3D-printed"skins" to customize the external carbody. Daihats indicates, a customised carthat might have taken two months underold production methods will be deliveredin two weeks with the 3D-printed parts.

However, key spare parts with structuralor safety properties have not been on thestage of customisations yet.

Source: BMW

Figure 3: BMW 3D-printed waterpump wheel

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3D printing in retail and consumerproducts

Product and service innovation

3D printing is being explored to design,develop and manufacture a variety ofconsumer products, spanning fromclothes, jewellery and other fashionproducts, digital accessories, to homegadgets and decoration.

To begin with, 3DP is capable of creatingintricate design or geometric freestructure. In addition, 3D printing opensa door to offer mass customization atlower cost. On this basis, collective-design will become a reality since theexchange and coordination betweendesigners and buyers cost much lessthan before.

Decentralised manufacturing of products

Additive manufacturing enablesdecentralized manufacturing ofconsumer goods. Multiple assemblyprocesses and long-distancetransportation will be eliminated. Anumber of benefits can be expected:costs and time saving, improvedresponsiveness and flexibility,management of demand uncertainty andreduction in required inventory.

As a result, the logistics costs will besignificantly reduces for manufacturers.Meanwhile, logistics companies arelooking for new value-added services fortheir manufacturer clients. UPS isreshaping its logistics business - turningits airport hub warehouses into mini-factories by using 3D printingtechnology. This is a forerunner to a timewhen distribution companies themselvesbecome factories.

3D printing in manufacturing

Disrupting the value chain

Apart from the specific impact toparticular verticals, 3DP also hasinfluence across the value chain ofmanufacturing. New business isemerging along with service platforms.

• Marketplace of 3D print files

The marketplace came into being, sincethe file creation is a process where astrong design expertise is needed. Insuch marketplaces, designers uploadfiles of required formats while users candownload the files for free or pay somefees for later printing.

• On-demand 3D printing serviceplatform or hub

It can be brick-and-mortar locations oronline services, where both individualand industrial customers can“outsource” the 3D printing service todesired manufacturers, and have thegoods delivered at their desired location.

Both platforms are fueling decentralizedmanufacturing, and impact the valuechain on many aspects. For one thing,competitiveness will increase with thecosts going down. For another,production bases are no more necessarysince it can be outsourced to scatteredlocal 3DP hubs, and only crucial value-added processes should be insourced.Flexible tariff for on-demand serviceswill be another benefit, compared tostandard manufacturing.

This area becomes crowed whileretailers, 3DP system providers as wellas internet providers are stepping in.Shapeways, Thingiverse, Staples, 3DHub, Sculpteo, UPS and Amazon areamong the active players.

The disruptive nature of 3D printing: offering new opportunities for verticals

Source: IDATE DigiWorld, 3D Printing, 2015

Figure 6: Value chain of manufacturing enabled by 3D printing

43% of companies expect3D printing to have astrong impact on thelocation of plants.5

Reshaping of regional manufacturingcompetitiveness

In the future, 3D printing may impact thelocations of plants. Given the ability tocreate highly customized products withfewer overheads and production steps,many companies perceive 3D printing asan opportunity to re-shoremanufacturing back to Westerncountries.

Different regions are highly expectingthe shift of plants location as well.According to a survey conducted by EYResearch5, UK leads the expectation with66% anticipating this change, followedby China and South Korea (46%), as wellas Germany (43%). For the US (37%)and the rest of Western Europe (35%).

Price drop as a booster for adoption of3D printing

A huge drop in price has been playingout since 2014, particularly for desktop-sized 3D printers, due to the expirationof key patents that year. A previouspatent expiration in 2009 led to asignificant drop of printer prices fromEUR 13,000 to approximately EUR 275-375 during the past 5 years. The trend isexpected to continue, allowing consumerto choose between higher speeds andmore materials options (metal, ceramic).

Meanwhile, the proliferation of start-upsresulted from the patent expiration maybring more innovation to sweep outtechnical hurdles for adoption. TheMakerBot Replicator 2X, for example,controlled by simplified 3D software, ispriced at EUR 2,300 but is as reliable andas good as the Stratasys uPrint whichsells for EUR 15,000.

Taking stepsforward

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© Alexander Kirch/Shutterstock.com

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Standardisation in additivemanufacturing

The lack of European and internationalstandards related to AM will be animpediment to the implementation on alarge scale. Facing this challenge, EUproject for Support Action forStandardisation in AdditiveManufacturing (SASAM) delivered aroadmap for standardisation activitiesfor AM in 2013.

A number of standards categories weredistinguished including design, specificindustrial needs, quality of manufacturedparts, materials, data processing, safety(regulations) and education. Thisdedicated standardisation roadmap isexpected to release an economical pushtowards the reliability of the processes,printers and their products.

DRM to protect intellectual properties

The rising of marketplaces of designfiles, where people can downloadprinting contents for free, imposes anincreasing threat to intellectualproperties (IP). Garner6 reported that by2018, 3D printing will result in the lossof at least 100 billion USD per year inintellectual property rights globally.

Following the same developmenttrajectory as other digital content likemusic and films, the companies thatprovide DRM systems to secure and rulethe digital files access, delivery andprinting process are emerging in aniTunes-like mode. Authentise andSendShapes are at the forefront inproviding DRM solutions to designmodel owners and marketplaces.

Roadblocks to move away

Quality of the printed products

Surface finish and mechanical propertiesare of great concern, particularly for theusage in final or functional partsmanufacturing. For instance, thosetechnologies working with metalpowder, are often associated withproperty problems, such as strength,stress and voids resulting from heatingand layer binding.

Source: SASAM

Further, the repeatability of productionis an uncertain element. Many printedparts also need traditional finishing is afactor which limits any gains inproduction flexibility and lead time.

Trade-off between printing speed andquality

Speed, often a result of printingresolution and magnitude, is a factor thatsignificantly impact the 3DP adoption.The usage of 3DP for direct manufactureis moving slowly; because the low speed(hours’ printing for several inches) doesnot have any advantage over traditionalmass manufacturing. We do see someprinter speeds are increasing, but mainlyappeared in high-end industrial orenterprise systems.

Legal barriers

For decades that 3D printing has existed,however, jurisprudence remains unclearconcerning many legal regimes includingpatents, copyrights and trademark. Apartfrom this, public security are challengedgiven the fact that advancement of 3DPmay facilitate the manufacturing ofillegal objects, such as firearms.

Lack of expertise

User and consumer unfamiliarity with3DP is eroding somewhat their interestin acquiring both 3DP systems andprinting services. A survey by EY6

implies that, even product engineeradmits that they do not have enough in-house expertise to establish theprocesses driven by 3D printing. In thissense, education and learning to cover aprocesses driven by 3D printing. In thissense, education and learning to cover awider range of the population is morethan necessary to drive up the adoption.

The disruptive nature of 3D printing: offering new opportunities for verticals

Source: EY Research, 2016

Figure 8 : Reasons for no 3DP experience

Figure 7 : Roadmap for standardisation of Additive Standardisation

1 PwC analysis of ZPryme Research survey data,2015, 2015 Disruptive Manufacturing Innovations,Available at:https://3dprintingindustry.com/news/new-pwc-study-showcases-manufacturing-trends-3d-printing-technology-76826/

² Sculpteo, 2016, State of 3D Printing, Available at:https://www.sculpteo.com/static/0.30.0-116/download/report/Sculpteo_State_of_3D_Printing_2016.pdf

³ Wohlers, 2016, Wohlers Report 2016, Available at:http://wohlersassociates.com/2016report.htm4 SmarTech, 2014, 3D Printing 2014: A Survey ofSmarTech’s Annual Market, Available at:http://smartechpublishing.com/reports/3d-printing-2014-a-survey-of-smartechs-annual-market-findings5 EY Research, 2016, Global 3D printing Report: 3DPIndustry, Available at:http://www.ey.com/de/de/services/advisory/performance-improvement/supply-chain/ey-global-3d-printing-report-2016-3dp-industry6 Gartner, 2014, Gartner Says Uses of 3D PrintingWill Ignite Major Debate on Ethics and Regulation,Available at:http://www.gartner.com/newsroom/id/2658315

References

About the Digital Transformation MonitorThe Digital Transformation Monitor aims to foster the knowledge base on the state of play and evolution of digital transformation inEurope. The site provides a monitoring mechanism to examine key trends in digital transformation. It offers a unique insight intostatistics and initiatives to support digital transformation, as well as reports on key industrial and technological opportunities,challenges and policy initiatives related to digital transformation.

Web page: https://ec.europa.eu/growth/tools-databases/dem/

This report was prepared for the European Commission, Directorate-General Internal Market, Industry, Entrepreneurship and SMEs;Directorate F: Innovation and Advanced Manufacturing; Unit F/3 KETs, Digital Manufacturing and Interoperability by the consortiumcomposed of PwC, CARSA, IDATE and ESN, under the contract Digital Entrepreneurship Monitor (EASME/COSME/2014/004)

Authors: Vincent Bonneau & Hao Yi, IDATE; Laurent Probst, Bertrand Pedersen & Olivia-Kelly Lonkeu, PwC

DISCLAIMER – The information and views set out in this publication are those of the author(s) and should not be considered as theofficial opinions or statements of the European Commission. The Commission does not guarantee the accuracy of the data included inthis publication. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use whichmight be made of the information contained in this publication. © 2017 – European Union. All rights reserved.