3D Printing & Middle Market Manufacturing

Richard D’Aveni is a bestselling author and a leading global expert on additive manufacturing and 3D printing. The prestigious group Thinkers50 has named D’Aveni a top global strategist and management thinker for every single year since 2007, an impressive span of a dozen years. D’Aveni is also the Bakala Professor of Strategy at the Tuck School of Business at Dartmouth College. The NCMM caught up with him recently to discuss his new book, The Pan-Industrial Revolution, which explores how 3D printing is transforming manufacturing.

How are middle market manufacturers using additive manufacturing/3D printing today?
D’Aveni: The vast majority of users of 3D printers right now are middle market companies. The reason is that big companies have these giant installed bases of conventional manufacturing, leveraging economies of scale and large-volume production. And while 3D printers are not quite ready for the mass production market, they’ve been successfully used by middle market companies for customized goods like eyeglasses and lenses. Until 3D printers gain the ability to make half a million to a million items economically, it's going to be largely in the middle market, doing low-to-medium volume printing of specialty items.

How are the larger companies using 3D printing outside of the highly customized product market where many middle market manufacturers are?
D’Aveni: Larger enterprises are using 3D printing to make simple parts, very cheaply and very quickly to feed an existing assembly line. They aren’t ready to blow up everything and eliminate the assembly line. We’re also seeing middle market companies acting as unique suppliers to very large companies who are using their existing assembly line model. Some of these middle market suppliers end up getting acquired by the larger client companies, such as GE. There’s a lot of use of 3D printers in industries like aerospace and military equipment with high end applications of high temperature metals for extreme environmental conditions.

What’s happened over the last few years that has made 3D printing more commercially viable?
D’Aveni: The big challenge with 3D printing three years ago was low-quality, inconsistency, and very high costs to make things compared to traditional manufacturing. Many of those challenges have been solved over the last couple of years by numerous companies, like Hewlett-Packard, bringing in technology from conventional manufacturing to make 3D printers more efficient.

The speed has gone way up, the accuracy has gone way up. HP has taken its technologies from laser printers and computer accessories and started to bundle them into 3D printing. HP also set out from the beginning to create a system where the vast majority of the materials are open market, not proprietary. They’ve partnered with lots of companies to make available all kinds of new materials, driving costs down.

What is big area additive manufacturing or BAAM?
D’Aveni: BAAM enables you to make much, much larger objects, like a car, helicopter or plane. Lockheed Martin is experimenting with manufacturing the F-35 using essentially a BAAM system. What BAAM does is set up scaffolding, like construction scaffolding, and it runs wires all across it and they have 3D printers moving along the wires. You might have twenty printers working at the same time on different parts, maybe making a first layer on the fuselage of an airplane.

BAAM allows you to essentially build a layer and then another layer and another layer. The big potential here for BAAM is that it enables a complete build up from top to bottom. No other approach can do that yet for electrical, mechanical devices. We're now marching towards that capability.

What do you see as the impact of 3D printing on manufacturing employment?
D’Aveni: Many people are pessimistic and think 3D printing is going to eliminate a lot of jobs. I'm not so sure that's the case. Certainly blue collar jobs in traditional factories will be lost. But entire new industries are going to pop up. The ripple effects of 3D printing on a couple of major industries could create far more jobs

Let me give you an example, which may sound crazy but isn’t.  Jacques Cousteau's grandson is now running experiments with 3D printing to repair and expand coral reefs in the Caribbean. He wants to make artificial coral reefs to replace what's been damaged in the Great Barrier Reef. So there could be all kinds of new jobs for fishermen. We could have much cheaper fish for food consumption. There are so many potential impacts that could create new jobs.

What should middle market companies be doing now to seize the opportunities presented by 3D printing?
D’Aveni: First, they have to decide on their business model, how they intend to use this technology. Will you be mass producing standardized products/parts or customizing? Second, you should begin experimenting, perhaps with working prototypes. Then you'd expand after that, usually working with a strategic partner. Procter & Gamble, for instance, has all kinds of products that could be made by 3D printing. They've strategically partnered with companies, like HP and Jabil, to build and test machines. Provide your partners with the product specifications you want improved, then work through getting a particular product or part done.

The third step is to figure out how to spread these new capacities throughout your middle market organization. You might take a specific product and just swap out each piece to 3D printing. Convert more of the production to 3D printing until you can rely on 3D printing to make the whole item. More and more parts will be 3D printed as new machines get developed and capabilities grow. So gradually keep pushing in that direction. You might also spread 3D printed parts over many different products, so you end up with a plant that's making parts for washing machines, refrigerators, driers and so forth.

Can you offer us an example to illustrate an effective implementation of 3D printing?
D’Aveni: I spoke recently with a UK design firm that partnered with a European gift store chain that has a thousand stores in the UK. The designer set up the following processes: On Mondays, they did the design of the gifts. They would do maybe a hundred of these designs every week. On Tuesday they printed them out. On Wednesday, they distributed the gift products to the stores directly and on Thursday the stores put them on the shelves. On Friday and Saturday, the gift store chain would sell the products and collect automatic information back on what sold and what didn't. So the gift store lets the market decide what they’ll sell based on feedback. If they sell more gift products, they make more and vice versa.

What other suggestions would you offer middle market company leaders wanting to get 3D printing right?
D’Aveni: You should consider building your industrial platform, your software, at the same time you're adding and experimenting with your additive manufacturing/3D  hardware. The two act together to deliver value. I’d also suggest that 3D printing is going to require a rethinking of their entire organization, with non-functional departments and blurred boundaries created. One of the advantages of middle market companies is they’re not bureaucratized and they’re more organic and flexible -- so they can make these necessary changes more effectively than huge companies.