What is the influence of 3D printing on Business Models?

3D printing history and industry adoption.

3D printing, or additive manufacturing, is a process where a three-dimensional object is manufactured by adding layers of a material under computer control. Objects are produced using digital model data from a 3D or CAD model or another electronic data source file. The computer controls an inject printer, which deposits a binder material into a powder bed, layer by layer. In the following video, you can watch a 3D printer creating a small Eiffel Tower.

3D printing technology is not something new. In fact, it has been around since the 80´s, when the first additive manufacturing technique was designed in Japan by Hideo Kodama. It is interesting to note that one of the first patents for 3D printing, issued in France, was abandoned “for lack of business perspective”. However, this is no longer an issue: the technology has significantly matured since the 80´s, and now we can print plastic, metal, food and even human tissue. Some big companies are already using 3D printing within their manufacturing processes with great outcomes:

  1. General Electric is expanding its 3D capabilities to produce fuel nozzles for the new Leap jet engines. These nozzles are made from one metal piece, lighter and stronger than those made in the traditional manufacturing method. The company is actively researching and hiring people to improve current 3D printers to make the process faster and more reliable.

  2. Boeing is another big company using additive manufacturing to build their planes. Up to 30 parts of the 787 Dreamliner airplane are made with 3D printers and, for research purposes, the company even printed a whole cabin. Boeing is also actively supporting research projects in 3D printing in the UK in collaboration with several universities. These projects lead to some remarkable outcomes, such as a hybrid 3D printing process that allows electrical, optical, and structural elements to be introduced throughout an additively manufactured component during the building process.

  3. Nike is also applying 3D printing to their sport shoes’ production processes: The Nike Vapor Laser Talon has a printed plate to enhance football player´s performance in the field. Nike uses Selective Laser Sintering Technology for this purpose, and as mentioned by Shane Kohatsu, Director of Nike Footwear Innovation: “SLS technology has revolutionized the way we design cleat plates – even beyond football – and it gives Nike the ability to create solutions that were not possible within the constraints of traditional manufacturing processes.” The company is planning to expand the use of 3D printing in other products.

  4. Ford is also applying 3D printing to make engine covers for the 2015 Ford Mustang. The technology that they use helps to save huge amounts of waste, time and money to create these particular pieces. The company, given their positive results in this particular project, will test 3D printing for other, larger car parts for cost effective customization.  This same approach has been applied by other car manufacturers like McLaren. The following video shows the 3D printing of car pieces.

Each of the above companies are reaping the benefits of 3D printing in one way or another. The technology allows for saving time and money and makes customization and prototyping much easier compared to traditional industrial processes.

However, additive manufacturing is not ready to completely replace assembly lines yet. It is convenient for producing complex parts, but all companies using it still rely on traditional methods to build products at a large scale. Nevertheless, the technology is moving forward fast, and companies are investing heavily in its development, that we might see fully 3D printed products in the near future in every shop. The next two videos show how some companies are already able to print furniture and even full houses!

Some case examples of Business Models applied to 3D printing

Therefore, this great technology has a bright future ahead itself. But how does it affect business models? How can we change traditional manufacturing business models with 3D printing? Several startups are already working on this, trying to show that the “lack of business perspectives” for 3D printing, as stated by French company Alcatel and The Laser Consortium in the early 80´s, no longer applies. Let´s take a look at some examples:

  • Organovo is an startup working in the promising field of 3D printing for biological tissues. They create bio printed materials, used for medical and surgery purposes, as long as they imitate human tissue and have a better performance than synthetic prostheses. They are also researching the printing of liver tissue for transplantations. In the following video, the researcher and entrepreneur in this field, Dr. Sam Wadsworth, explains the huge potential of this technology for medical uses.

  •  Shapeways is an online marketplace for making, buying and selling 3D-printed creations. Anyone can build a printable virtual model of their product and Shapeways will print it on demand. It is a great platform for designers who want to sell their products without spending much money on manufacturing. The variety of products available is outstanding and a real eye-opener for the possibilities of on-demand 3D printing.
  • The same 3D bioprinting technology has been successfully adapted to food printing. Startups like Foodini or Food Ink are selling food-printing machines, both for homes and restaurants. Both companies promise fresh, natural food production to help people and restaurants save food, time and money.

  • Furthermore, there is a bunch of companies creating and selling customizable retail products. Banneya is a London based firm selling customizable jewelry for both women and men. Clients can design their own products and the company will print and deliver it on demand. The Irish firm Love & Robots is also selling printable jewels, using how clothes move in the wind as models. Clients can choose the weather conditions of a particular location and date on their website, and a simulator will create the printable model of a ribbon that is manipulated by these weather conditions.

  • Finally, another company called Sols is selling printable shoes for men and women. They capture measurements through a mobile app and put them into a parameterized 3D model that creates a printable file for each pair of shoes. This on-demand and 100% customized service has a bold slogan: “Mass manufacturing is so last year”. Undoubtedly, a clear statement for what 3D printing is already able to achieve at this point in time.

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All examples shown above point to the potentially transformative effects of 3D printing for business models. We can summarize them in the following points:

  1. First of all, 3D printing technologies lead to product and service innovation, enabling mass-customization. As the result of a co-creating process between customers and companies, the value of the resulting product will be higher than mass-produced products. Thus, customers become more important than ever, enabling more value creation and higher value capturing.

  2. A second element, which also relates to co-creating, is crowdsourcing: crowdsourcing has already led to significant business model innovations, even creating completely new business models. Crowdsourcing also helps to create positive feedback loops between companies and customers.

  3. 3D printing also allows to target new market segments, regardless of how small they are. On-demand production enables to the production of few products without having to consider the high costs of mass-production. In a way, it allows to monetize the “long tail”.

  4. 3D printing technology allows for distributed manufacturing, with parts to be produced locally. With a suitable 3D printer and a 3D file everybody can build whatever they need and play a part in the manufacturing of a final product. This fact dramatically changes logistics and supply chain management since the need to ship items from factories to customers reduces. This can significantly decrease transportation and storage costs.

But what about the obstacles? There are many, but probably the most challenging component for 3D printing will be capturing value, since prices can be sometimes higher than expected by customers. New revenue models need to be created in order to overcome this obstacle.  In contrast, access to 3D printing technologies enables the experimentation of various new business models at a much lower cost. Prototyping and testing are far cheaper and, thus, companies can easily build and test product prototypes, even functional ones, at a low cost.

We can summarize the 3D printing potential in one phrase: it enables the digitisation of objects and their production. As long as we can create a 3D model of something, we can easily replicate it whenever we want, just with an Internet connection, a computer and a printer. Will we see a world of decentralized and distributed manufacturing in the near future? Nobody can foresee that, but the technology is here to stay, and all companies involved should consider to adapt and change their business models before it is too late.

Further reading:

SAP´s Business Thought Leadership reports about 3D printing: https://www.sap.com/search/search-results.html?Query=3D+printing

Paper about 3D printing and business model innovation:
http://www.sciencedirect.com/science/article/pii/S0040162515002425