“Industry disruptors” is the 2nd presentation of a series of 3 regarding the 3D printing. Questions that arise when considering this new technology are such as what is the impact of 3D printing in the manufacturing industry as well as what would be the economic implications.

1. Disruptive Innovation &
3D Printing
Part II

2. Agenda
1. What is a disruptive innovation?
2. 3D Printing Disruption
3. Traditional Manufacturing vs. 3D Printing
4. Consumer manufacturers?
5. Implications
6. Specific disruptions
7. Downsides
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3. What is a Disruptor?
Disruptors are innovators…
…but not all innovators are disruptors
According to Clayton Christensen (HBS):
• “Disruption displaces an existing market, business
model, industry, or technology and produces something
new and more efficient and worthwhile. It is at once
destructive and creative.”
– Internet, smartphones, UBER
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4. 3DP Disruption- Why Now?
• Advances include improvement in:
– the performance of additive manufacturing machinery,
• Speed, quality
– an expanding range of possible materials,
• Increased range of materials = more sophisticated end products.
• Incorporating sensors, microprocessors, electrical circuits
– and falling prices for both printers and materials.
• The average industrial printer now sells for about $75,000, and some
machines cost more than $1 million.
• These costs are widely expected to decline rapidly in coming years as
production volumes grow.
• Major initial patents have expired or will expire soon
– open source projects spread free software and encourage rapid
innovation for 3D printing
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5. Direction of 3DP Technology
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Gartner predicts that 3D
printers with the
capabilities and
performance that is
required by organizations
will be available for less
than $1,000 by 2016.
Source: PriceWaterhouseCoopers. (2014). 3D printing and the new shape of industrial
manufacturing.

6. How are SMEs and large companies adopting 3DP?
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Source: PriceWaterhouseCoopers. (2014). 3D printing and the new shape of industrial
manufacturing.

7. Traditional Manufacturing vs. 3D Printing
• For large production runs, traditional manufacturing processes cost less per unit than 3DP.
• High up-front tooling costs make traditional manufacturing more expensive for small production
runs.
• Time to produce a 3-D printed product is much shorter than the time to make tooling,
though actual production time for each unit is longer than in traditional manufacturing.
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8. Goodbye to Economies of Scale?
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As economies of scale come into play, traditional
manufacturing can be more beneficial for
producing larger quantities of products.
3DP can provide an efficient alternative for low-to-
medium-sized production runs.
3DP marginal costs do not change with volume
Expected reductions in material costs +
improvements in 3DP tech will increase the
production quantities at which 3DP might
compete with traditional manufacturing methods.

9. Bottom Line (for now…)
• Although traditional manufacturing will likely still hold place in the competitive landscape in
the years to come, the next 10 to 20 years will see a rapid increase in the innovations made
possible by 3D printing
• Companies based on economies of scale will continue to support commodity and high
volume production.
• 3DP is a viable, competitive option when:
– end-user customization is highly desirable,
– where production is very small volume,
– where the end product requires features that are not easily manufactured by traditional means
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10. Where will the disruption start?
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Source: PriceWaterhouseCoopers. (2014). 3D printing and the new shape of industrial manufacturing.

11. Consumer manufacturers?
• Unit sales of consumer 3D printers remain small, with about
23,000 printers sold in 2011, but these sales are growing
rapidly, with more than 300 % in average annual growth
between 2007 and 2011.
• The ability to easily design and self-manufacture products
could create significant consumer surplus and even
influence consumer culture
• Right now, it is unlikely that consumers will be willing to
invest the time and effort required to make objects, as
opposed to buying them.
• A gradually rising share of sales in categories such as toys
and personal accessories could shift to either home
production or 3D printing centers.
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12. Implications
• The 3D production ecosystem will have major effects
in each of the three major stages of the design-build-
deliver model.
– Design and production will be tightly coupled through
experimentation.
• It will change the nature of design and production:
– GE printing a fuel nozzle in 1 piece as opposed to
assembling 20 different parts (annual cost savings of up
to 75%)
– Boeing printing cool air nozzles with complicated designs
at a 30% cost savings, large reductions in labour costs
• Planning will go from long term to real time.
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13. Implications
• Proximity between supplier, manufacturer, and customer will matter, and localized production
will be not only more feasible but more desirable.
• Goods will be infinitely more customized, because altering them won't require retooling, only
tweaking the instructions in the software.
• Companies will benefit from savings in materials, labour and transportation costs
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14. Supply Chain Disruption
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Reducing the supply chain to one
link by eliminating the connections
between development,
prototyping, production, delivery
and warehousing of products.

15. Disrupted Industrial Workers
Will the manufacturing industry lose jobs to this labour-
saving technology?
• According to PwC, it is too early to discern how 3DP will impact
this industry
– It may cut into unskilled factory floor jobs, but will create
opportunities for workers with technical know-how
• Opportunities for re-shoring and retraining workers new programs
• 45% of manufactures attributed their “lack of current expertise
within their company” as one of the top barriers to implementing
3DP in their business.
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16. Some industries are poised to be positively impacted by this disruption:
CLIENT
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Especially manufacturers of:
• Low volume and/or new designs not economically attractive through subtractive
methods
– Aerospace
• More customized products
– Medical devices, helmets, footwear
• Complex, older generation products with many parts and obsolete parts that are still
in demand
– heavy manufacturing, energy, agriculture

17. Some industries are poised to be negatively impacted by this disruption:
Especially…
• Transportation and logistics industries
– More goods being produced locally, freight volumes may be impacted
– Warehousing
• Patent reliant industries with weak IP protection
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18. The Downside of 3DP Disruptions
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• Regulatory and policy issues, most notably intellectual
property rights
• 3D scanners and easily shared CAD files make IP
infringements possible and very easy
– Similar to sharing music online
• Gartner forecasts $100bn annual global losses by 2018 due
to 3DP IP infringements
Important: Policy makers face the challenge of evaluating
and addressing these risks without stifling innovation or
limiting the value that this technology can provide