3D opportunity: Additive

manufacturing paths to performance,

innovation, and growth
October 1, 2014

Dr. Mark J. Cotteleer

Deloitte Services, LLP

Closing thoughts to keep in mind as you evaluate the business case for AM

AM is not a panacea.
No reason to view it as a universal replacement for traditional manufacturing methods.
We do see it as important within the constellation of manufacturing methods that business can
deploy in pursuit of performance, innovation, and growth.

Consider the blessing and potential curse of flexibility-enabled product innovation

Redesign to reduce material and assembly while improving product performance
What is your position and value add in the supply chain?

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What is Additive Manufacturing?

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Additive Manufacturing Defined

Additive manufacturing can transform the way products are manufactured and brought to market

Additive manufacturing is a process of joining materials to make objects from 3D model

data, usually layer upon layer, as opposed to subtractive manufacturing methodologies

Electronic design file

(e.g., .STL) of object
created using CAD or
scanner

Software slices model

into cross-sectional
layers and sends file to
AM

Following the design, the

AM layers raw material(s)
until the final object
emerges

Final object is
produced
with little/no waste

Additive Manufacturing can be used to.

Improve
Quality
Improve
Quality

Reduce Costs

Increase Flexibility
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Additive Manufacturing Adoption Timeline

Additive Manufacturing has been slowly gaining traction, specifically within design, however, new
technologies have the potential to amplify growth and extend usage within production
Additive Manufacturing Timeline: The Shift in Additive Manufacturing Applications
Product Design
Prototyping and Customization

AM
Milestones

1986
1989
AM
AM Rapid
Invented
Prototype
(SLA) System (FDM)

1986
Impacts on
Rapid
Aerospace
Industry Prototyping

2007
2008
RepRap
User
Movement Generated Art

2004
2007
Component Real-time
Manufacture Spare Parts
Manufacture

Production
Scaling in Volume, Size, and Availability

2009
FDM Patent
Expires Growth
in Consumer 3DPs

2011
SULSA
Prototype

2014
Selective Laser
Sintering Patent Expires

2012
3D System
Acquires Z Corp

2016
Mass Production
LEAP engine part

2030-2050
(Estimated)
Completed Product

GE Acquires
Morris Technology

Main Applications 1986 - 2011:

Product Design
Product Part Production
Rapid Prototyping
Concept Modeling

Design

Catalyst for Mass Production Adoption1: Main Applications 2014 - Future:

GE plans to mass-produce 25,000

LEAP engine nozzles with AM
already have $22B in commitments
Parts will drive production and
operational cost savings
First test to see if AM can
revolutionize production

End Product Production

Mass Production
Democratized Consumer 3D
Printing

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Global Additive Manufacturing (3D Printing) Market Size and Forecast

The global additive manufacturing market, reached sales of $3.0 billion in 2013, on annualized growth of
35 percent over sales of $2.3 billion in 2012. AM industry growth over the last 25 years has been 25.4
percent, and 29 percent in the last three years.
Market Outlook

AM Market Size ($ Bil.)

$ Bil.

Forecast
$12.0

10.8

Forecasts for growth of the AM market by

equity research analysts range from: $7 billion
by 2020, on 18 percent CAGR (Paul Coster of
JP Morgan), to bull market scenarios as high
as $21.3 billion by 2020, on 34 percent CAGR
(Ben Uglow of Morgan Stanley)

$10.0

$8.0

Wohlers Associates predicts the market for AM

products and services will reach $10.8 billion
worldwide by 2020

7.9
$6.0
6.0
$4.0

4.0
2.2
1.1

1.3

1.7

2009

2010

2011

3.0

$2.0

$0.0
2012

2013

2015

2017

2019

2020

Actuals
Note: Actuals based on Wohlers data.
Source: Wohlers Associates, May 2013; Morgan Stanley Research, September 2013; J.P. Morgan, January 2013

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AM is used in varied sectors for multiple applications

AM system sales revenue to various sectors: 2013
Others; 5%
Govt/
military; 5%

Architecture;
4%

AM systems deployments by applications: 2013

Education/
research; 6%

Industrial
products
19%

Tooling
components;
6%

Other; 2%

28% (2012); 19%(2011)

Functional
parts; 29%

Academics;
6%

Presentation
models; 9%
Consumer
products;
18%

Aerospace;
12%

Visual aids;
9%
Medical;
14%

Automotive;
17%

Patterns for
metal
castings;
10%

Patterns for
prototype
tooling; 11%

Fit and
assembly;
20%

Prototyping (38%), tooling (27%) and functional parts (29%) lead

among applications.

AM systems are sold into a wide range of sectors.

Multiple industry verticals contributed to double-digit sales
of AM systems in 2013.

Functional part production is growing faster than rest of

market.

Automotive, Medical, and Aerospace lead (43%) among

targeted sectors.

Companies typically spend 10 times more on production than

prototyping an imperative for AM users and providers is to
look beyond prototyping and focus on end-parts production.
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Source: Wohlers Associates Additive Manufacturing and 3D Printing State of the Industry, 2012, 2013

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Deloitte
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Note: Based on a survey of leading AM systems providers conducted
by Wohlers
Associates

LP

AM is not one thing; it is many technologies

Additive
Manufacturing

Vat photopolymerization

Stereolithography (SLA)
Digital light processing (DLP)

Material jetting

Multi-jet modeling (MJM)

Material extrusion

Fused deposition modeling (FDM)

Powder bed fusion

Binder jetting

Powder bed and inkjet head 3D printing

(PBIH)
Plaster-based 3D printing (PP)

Sheet lamination

Laminated object manufacturing (LOM)

Ultrasonic consolidation (UC)

Directed energy
deposition

Laser metal deposition (LMD)

Electron beam melting (EBM)

Selective laser sintering (SLS)
Selective heat sintering (SHS)
Direct metal laser sintering (DMLS)

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Manufacturing technologies and the application spectrum

Phase
Design /
Engineering

Concepts

Prototype

Low Volume
Production

Mass
Production
Die Casting

Tooling
Tooling &
& Injection
Injection Molding
Molding
Cast Urethanes (silicon mold)
CNC Machining
Direct Metal Laser Sintering
Selective Laser Sintering

Technology

Fused Deposition Modeling

Stereolithography
Multi-Jet Modeling
Binder Jetting

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AM Material Sales Growth and Metals / Advanced Materials Opportunity

$Mil.

Material Sales for AM Systems Worldwide ($Mil.)

$450

AM Materials posted sales of $422.6 million in 2012, an

increase of 29.2 percent from sales of $327.1 million in 2011;

423

$400

Total Materials

$350

327

Metal Materials

$300

Materials comprised 19.2 percent of total AM sales of $2.2

billion in 2012, and have enjoyed a 5 year CAGR of 15.4
percent;

266

238

Credit Suisse estimates 2013 Materials sales of $528 million,

and forecasts Materials sales of $1 billion by 2016;

$250
$200

218

$150
$100
$50

71
12

14

18

25

$0

Better materials at a lower cost are both a hope and hurdle for
the industry. Thermoplastics and photopolymers are $175$250 per kg, while those used in injection-based molding cost
just $2-3 per kg. Likewise, 3D steel is currently 100x costlier
than commercial grade.

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Material Sales, by Type (2012, in $Mil.)

Plastics (polymer, resin, composite, other) account for an

estimated 80+ percent of industry sales, and metals (which
largely became available in 2009), ~6 percent;

19.1%
Aerospace and automotive demand for strong and flexible
advanced and high-value manufactured metal parts, should drive
metals sales growth, and advances in hybrid metals (like
aluminum-titanium alloys) appear promising;
New and improved ceramic and biocompatible materials have
and will continue to drive MedTech AM adoption, while demand
for multi-material and novel material attributes (color, edible, etc.)
should increase across most AM end-market sectors.

5.9%

50.1%

24.8%

Photo-polymer

Laser-sintered polymers

Metals

Other
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Source: Credit Suisse, September 2013; Wohlers Associates, May 2013

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Maturity of Advanced Materials for Additive Manufacturing

Materials capabilities are expanding from plastics and metals used commercially today, to complex
materials being developed for use in future applications
Most Mature

Least Mature

Prototyping, tooling &

piloting

Manufacturing

Early development

Theoretical

Floor console prototype

from GM

Production ready jet engine

components from GE

3D printed honeycomb bricks

from Building Bytes

3D printed modular Lego

Structures from MIT

Polystyrene

Titanium

Concrete

Hierarchical composites

ABS

Cobalt chrome alloys

Living tissue

Graded materials

Steel

Polyurethanes

Carbon fiber-

Localized, multimodal

Aluminum

Nylon

Copper

PEEK & PEKK

Glass

Nickel alloys

Polylactic acid

Food

Bonded plaster

Polycarbonate

Clay

Alumina

Sand (Casting)

Zirconia

Epoxies

reinforced plastics

shaping and processing

Multi-scale design and
optimization

Materials Currently Under Development

Paper

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How will Additive Manufacturing Will Impact Industry?

Our Point of View: Additive Manufacturing is an innovative technology that can significantly impact
products and the ways that they are distributed

High
Impact
on
Product

Additive Manufacturing Impact on Products and

Supply Chains
3 Product evolution
4 Business model

Product Impact

Mass customization
Manufacturing at point of
use
Supply chain
disintermediation
Customer empowerment
and co-creation

Design:
Reduced constraints
Faster product development
Production:
Reduced barriers to entry
Reduced/eliminated tooling
Less material waste
Reduced manufacturing steps
Print on demand
Transportation & Distribution:

1 Stasis

Low Impact
on Product
and Supply
Chain

evolution

Customization to customer
requirements
Increased product
functionality/performance
Zero cost of increased
complexity

Benefits of AM Exist
Across the Value Chain

Design and rapid

prototyping
Production and custom
tooling
Supplementary or
insurance capability

Localized production

Supply chain evolution

Manufacturing closer to point

of use
Responsiveness and flexibility
Management of demand
uncertainty
Reduction in required
inventory

Maintenance Support:
Store/distribute designs electronically

High Impact
on Supply
Chain

Supply Chain Impact

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 and what specifically might that look like?

Supply chain impact for responsiveness

Manufacturing closer to the end
customer
Ability to shift end-part production
closer to end-use customers so as
to streamline the logistics of
distribution and accelerate delivery

Military Mobile Parts

Hospitals
Technology used:
various
The U.S. military is investing in
mobile production facilities that
can manufacture parts in the
combat zone to get rarely
requested, but vital,
replacement parts quickly to
the field.

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 and what specifically might that look like?

Product impact and market expansion

Component simplification
Provides opportunities to use AM in
support of simplified product structures
requiring fewer components, less
assembly, and improved quality

GE Aviation
Technology used:
direct metal laser sintering
GE fuel nozzles formerly
involved assembly of 20 parts.
GE now uses AM to produce
as a single unit reportedly 5x
more durable than before.

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Lockheed Example:
Titanium Propellant Tank
Ti Tanks (5)
Direct Mfg
Material

IRaD funded manufacturing demonstration

16 scale demo manufacturing study
Base
Stock

Baseline tank domes are forged titanium

Each A2100 has 5 or more tanks (10 domes)
Laser scan of DM part bulls-eye on deposition

Example A2100-type
Propulsion System

Advantages
DM Accelerates schedule
Baseline forged dome: 12 Mo lead time
DM Dome Preform was made in 3 hours
DM Dome is ~50% cost of forged dome
Baseline forging limitation 46 diameter
DM Dome does not have same size limitation
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Lockheed Example:
Bleed Air Leak Detect Bracket (BALD) for Joint-Strike Fighter

Bracket used in the hot side of the engine on Lockheed

Martins Joint Strike Fighter

Traditionally, machined from wrought Ti-6Al-4V plate.

Very thin cross section resulting in buy-to-fly ratio of

33:1
33 pounds of raw stock plate is purchased to produce a 1-lb
machined bracket.

Produced using Electron Beam Melting A powder bed

fusion AM process.

EBM technology is a suitable additive manufacturing technology to

produce complex aerospace components, such as the BALD
bracket.
[AM parts] have consistent mechanical properties, meeting the
ASTM specification for wrought Ti-6Al-4V material for yield strength,
ultimate tensile strength, and elongation.
A simple cost analysis shows that EBM technology provides a 50%
cost reduction over the current production method.
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AMs increasing adoption: Challenges and potential solutions

AMs ability to manage small volumes, complex designs, and light-weight but strong structures, make it a natural fit for the A&D industry. In
its current state, the technology faces some challenges associated with size and scalability, high material costs, narrow range of materials,
limited multi-material printing capabilities, and quality consistency issues. Continuing advancements in the AM technology and material
sciences are likely to address these limitations and are expected to drive AMs wider adoption in the A&D industry.

Size limitations

Scalability limitations

Narrow material choice and high material

cost

AM underperforms traditional
manufacturing when it comes to
production of large A&D components.

AM providers are working to improve the

build speed of existing AM systems to
support the industrys bulk-production
needs.

AM predominantly uses polymers, metal

powder to manufacture various A&D parts.
Also, the costs of materials used in AM are
much higher compared to those used in
traditional methods.

AM providers are focusing their R&D

efforts to address the size limitations
of existing AM systems.

AM systems where different parts can be

produced concurrently or production and
unloading can happen simultaneously
will help improve AMs scalability.

Over the next few years, advances in materials

sciences are likely to expand the choice of AM
materials and bring their costs down.

Limited multi-material printing

capability

Quality consistency

AM systems that can print with multiple

materials at a time offer huge design
flexibilities; currently, there are only a few
such printers available.

Quality consistency issues, especially in

producing fully-dense metal parts, result from
excess heat that is generated from heating the
material leading to stress and voids particularly
on layer boundaries.

Advances in multi-material printing

capability will help designers to make a
part using different materials with varied
properties.

Repeatability can be improved by embedding

controls within the machines so that in-situ
dimensional accuracy is ensured and
subsequently conducting automated inspections.
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Source: Deloitte analysis

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A word on the business case for AM

High level factors we are looking at

In a typical comparison with injection molding of plastic parts:

Labor

Machine costs

We find no clear evidence

that labor rates systematically
differ based on IM vs. AM.
Part simplification may
reduce total.

Machine costs can

dominate business case
for AM.
Acquisition, depreciation,
build volume, utilization, and
maintenance are also factors.

Materials

Tooling

There are extreme cost

differentials between AM and
traditional material feedstock.
Material recycle rates should
be carefully evaluated.

The cost of IM tooling can

far outweigh unit costs for
each additional part.
A key attribute of AM is its
ability to reduce or eliminate
tooling costs.
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Direct cost breakdown for a small, non-flammable, plastic electrical component using
IM and AM.

Everything else!

Tooling!
Material
Machine

Everything
else!
Tooling!

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Closing thoughts to keep in mind as you evaluate the business case for AM

AM is not a panacea.
No reason to view it as a universal replacement for traditional manufacturing methods.
We do see it as important within the constellation of manufacturing methods that business can
deploy in pursuit of performance, innovation, and growth.

Consider the blessing and potential curse of flexibility-enabled product innovation

Redesign to reduce material and assembly while improving product performance
What is your position and value add in the supply chain?

Start with focus on relatively small, complex, plastic components but remain open to
applications for larger and metallic components
Especially where using high-cost materials, involving high buy-to-fly ratios, and/or lots of
machining.

Develop a clear picture of the financial implications of new technology investment.

Machine costs dominate for AM. Seek advice on depreciation and tax incentives.
Tooling may shift the calculus toward AM due to expense, flexibility, and impact on time-to-market
Watch materials costs.

Adopt a broad perspective on time.

Before deciding AM is slow, consider the full production cycle involved in traditional methods.
Latency between production steps, time-to-market, delivery lead times are crucial to value proposition.

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Additive manufacturing resources from Deloitte

Massive Online Open Course on Additive
Manufacturing!
3D-Opportunity: The course on additive
manufacturing for business leaders
Free course launches online October 20!!
Deloitte University Press 3D Opportunity series
- 3D Opportunity: Additive manufacturing paths
to performance, innovation, and growth
- The 3D opportunity primer: The basics of
additive manufacturing
- 3D Opportunity in Tooling: Additive
manufacturing shapes the future.
- 3D Opportunity in medical technology:
Additive manufacturing comes to life
- 3D Opportunity in the automotive industry:
Additive manufacturing hits the road
- 3D Opportunity in aerospace & defense:
Additive manufacturing takes flight
- Fast Company infographic
- 3D printing: Complexity is free may be
costly for some
- Video: Additive manufacturing A 3D
Opportunity.
2014 Deloitte Global Services Limited

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3D Opportunity MOOC
(Massive open online course)
Complimentary course on Additive
Manufacturing, aka 3D printing
~3 hours of video broken into 5-7 minute
segments with motion graphics, assessments,
optional assignments
Collaboration with America Makes, 3D Systems,
Oak Ridge National Laboratory

Course participants will walk away with:

A foundation in AM principals and trends
An understanding of how AM will transform
industry
Approaches companies can take to evaluate and
integrate AM into their business
Sector-specific information for target industries

Course launch: October 19

View a preview and register: www.dupress.com/3d-opportunity-course

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Thank you.

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