Business models for 3D Printing 3D Design & Engineering conference

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1 Business models for 3D Printing 3D Design & Engineering conference Gijs Duivenvoorde Eindhoven, May 19th 2015

2 Agenda Developments Real life examples Business & Earnings Questions 2

3 Flow to be processed 3D printing is innovating New, complex structure improving Unstable Stable structure improving change Chaos New Regression Old Time

4 3D printing is a means, not an end Social innovation Product innovation Service innovation Process innovation Organisational innovation 4

5 Gartner Hype cycle 2014 (Q1) 5

6 Gartner Hype cycle 3D printen (Q3, 2014) 6

7 Investments are huge President Obama "Two public-private manufacturing institutes ($ 320 Million Chicago, Detroit), to put America at the forefront of 21st century manufacturing" February 25, 2014 GE s Oil&Gas CTO, Eric Gebhardt "We move into full production in 2015", we invest $100 million into technology development over the next two years, with a significant portion in 3D printing. "China is absolutely fastest growing region" (Jaglom of Stratasys. Wednesday, February 26) Whitman The bigger market is going to be in the enterprise space, manufacturing parts and prototypes in ways not possible before" China sees development of 3D printing industry as a national strategy to transform business model in a more innovation-driven way. McKinsey (2013): "3D printed economic worth by 2025 USD$ billion per year" 7

8 Additive Manufacturing: Benefits and Obstacles Costs: engineering, man-hours and material costs Quicker and more accurate machines larger build space Quality and safety: especially lack of industry standards Communication protocols, legal clarity on IP Education: trained operators, designers, business developers 8

9 Direct Spare Goal Determine the technical and economical feasibility to produce spare parts via 3D Printing 3D printing should lead to: Cheaper parts (less transportation, stocks, labour costs, Capital commited) and / or Environmental benefits (less pollution, energy or fuel consumption, waste) and / or Better quality parts (lifetime, durability, functionality, ease of use, etc.) 9

10 New Business models Traditional spare part supply chain Design Production Transport Storage (Bulk/ Regional) Transport final transport Receipt (local service) WASTE (30-80%) 20-70% Repair/ assembly Direct Spare supply chain Design superior leadtimes lower costs no inventory of spare parts Final Transport AM (local shop) No waste (0%) 100% Repair/ assembly 10

11 Possible business models Business model 1 Balancing end of stock Enough volume to cover costs Customer flexibility 0-3% cost advantage NB Start out with a design for both 3D printing and traditional Business model 2 Continuously improved parts Essential adjustments Co create with the customer 5-20% extra earnings Business model 3 Parts on demand Value proposition Niche markets ++ extra earnings 11

12 Integrated proposition: 'Hybrid Wholesale' Technical Wholesale under constant pressure. Added value is questioned 3D Service providers have a hard time convincing industrial partners of their quality output Hybrid Wholesale Certified parts on stock + The possibility to 3D print certified designs and special parts locally + Added Value logistics: Managing stocks and spares, pick-up location for products ordered online Technically educated staff Vision on the future of industrial services 12

13 Impact on logistics: three views 1. Rationalisation Decreasing the number of non moving parts on stock Less M2, less inventory control and management, and capital costs involved Company internal, cost driven approach, with minimal customer involvement 2. Gross margin All parts that can be printed, or design-wise improved Just in time, orders small, batch sizes large, design changes higher margins Cost and profits focus, customer involvement (flexibility re materials, specs) 3. Business development Parts with a very long delivery time and major impact on operations Production machines stand still creating opportunity costs/ revenue losses Value proposition net worth of solution higher than design/mftr cost of 3D part 13

14 Makers market. Example: 3D Hubs Distributed Manufacturing network, steadiliy becoming more professional (metal printers, high end plastics, ) WE'RE CONNECTING YOU TO LOCAL 3D PRINTERS Started May ,4 million investment secured September

15 Online platforms, examples Online marketplaces, two options: Upload your own design Print it in various materials Get advice on design optimization Instant quotation, based on volume and weight Download someone else s design Adjustment - redesign Resell / marketplace model Matchmaking market places Connect those with a design with those with a printer Ease of use, simple interface, library and reviews Very straightforward terms and conditions 15

16 Industry Specific Generic The Berenschot Business Model Cube B2B B2C Information & knowledge sharing Enabling services & development Production of parts & tooling 16

17 Industry Specific Generic Factors for success in the B2C market User friendliness and ease of operation Experience and engagement Secure and fast HEMA B2B B2C Information & knowledge sharing Enabling services & development Production of parts & tooling 17

18 Industry Specific Generic Industry determines factors for success Generic (functional) Customer relationships Quality assurance and control Product development and features Industry Specific (value add) Aerospace: Light weight Medical In-body certified Jewellery Designer trends Jewellery this B2B B2C Information & knowledge sharing Enabling services & development Production of parts & tooling 18

19 Service and production often combined? Production success factors Partnerships Speed of delivery Product reliability Enabling services success factors Customisation Standardisation Creative solutions & Example ASML component 19

20 Industry Specific Generic Focus for success Specific factors for success B2B B2C Specific factors for success Information & knowledge sharing Enabling services & development Production of parts & tooling 20

21 For companies Berenschot Propositions 3D Printing Strategy Market research Competitor 3D action analysis Business model canvas Road mapping / scenarios Business modelling & development Customer driven supply chain Strategy implementation 3D- BPOI Business process redesign Supply chain rationalisation 3D Impact analysis Portfolio analysis Pruning Sustainability/circular economy Innovation projects Market analysis (technology, companies, applications, markets) Road mapping for regions/ clusters Program development Funding Program and project management Business development support Campus and eco system support Organise cooperation Develop business model (knowledge, experience, revenues) Growth programs / accelerators For regions or clusters Financing 3D printing activities Investment analysis / business case Subsidies Cost of ownership Master classes Business impact 3DP 21

22 Quality Investments for Additive Manufacturing Mr. Chris Krampitz Strategy Digital Manufacturing Technologies Mr. Onno Ponfoort Senior Managing Consultant 22

23 Questions for the Is 3D printing just another production method, or will it fundamentally change your supply chain? Will 3D printing open the door to new business models in maintenance and repair? Is 3D printing a topic to discuss with your suppliers and customers? 23

24 Successful Business Models for 3D Printing Seizing opportunities with a game changing technology For more information: Gijs Duivenvoorde G.Duivenvoorde@berenschot.com 24