Making the Business Case for Additive Manufacturing June 1, 2016

Transcription

1 Making the Business Case for Additive Manufacturing June 1, 2016 sme.org/smartmfgseries

2 Making the Business Case for Additive Manufacturing June 1, 2016

3 Our goal for today Learning objectives: Defining AM and how might it apply to my business Understanding financial drivers for AM justification Framing Quality considerations when implementing AM Exploring the AM digital thread 3 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

4 Agenda Workshop Sessions Introduction Understanding and Applying AM Applying AM to my Business: Drivers of Return on Investment (ROI) Applying AM to my Business: Quality Applying AM to my Business: Digital Thread Questions and Conclusion Timeframe 10 minutes 40 minutes 40 minutes 40 minutes 40 minutes 10 minutes 4 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

5 Understanding and Applying Additive Manufacturing

6 We are in a 4 th Industrial Revolution The marriage of advanced manufacturing techniques with information technology, data, and analytics is driving another industrial revolution - paving the way for AM. The 4th Industrial Revolution invites manufacturing leaders to combine information technology and operations technology to create value in new and different ways 6 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

7 Intro to Additive Manufacturing Additive Manufacturing encompasses a range of materials and industries. AM is the process of joining materials to make objects from 3D model data, usually layer upon layer, as opposed to subtractive manufacturing methods like milling and machining CAD model defines part geometry Software slices the model into thin layers Printer builds part layer by layer Final object produced with little/no waste 7 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

8 AM is not one thing; it includes different processes and constituent technologies VAT PHOTOPOLYMERIZATION Stereolithography (SLA) Digital light processing (DLP) MATERIAL JETTING Multi-jet modelling (MJM) POWDER BED FUSION Electron beam melting (EBM) Selective laser sintering (SLS) Selective heat sintering (SHS) Direct metal laser sintering (DMLS) SHEET LAMINATION Laminated object manufacturing (LOM) Ultrasonic consolidation (UC) DIRECTED ENERGY DEPOSITION Laser metal deposition (LMD) BINDER JETTING Powder bed and inkjet head 3D printing (PBIH) Plaster-based 3D printing (PP) MATERIAL EXTRUSION Fused deposition modeling (FDM) Note: AM processes are written in upper case and constituent technologies are in italics. 8 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

9 Technology Manufacturing technologies and the application spectrum Phase Concepts Design / Engineering Prototype Low Volume Production Mass Production Die Casting Tooling & Injection Molding Cast Urethanes (silicon mold) CNC Machining Direct Metal Laser Sintering Selective Laser Sintering Fused Deposition Modeling Stereolithography Multi-Jet Modeling Binder Jetting 9 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

10 AM implementation and scaling AM breaks two existing performance trade-offs: capital required to achieve economy of scale and capital required to achieve scope. 10 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

11 Product Impact The AM business case rests on more than direct part substitution Too often, the emphasis is on producing the same part and pushing it through the same supply chain. Speed to delivery High Impact on Product 3 Additive Manufacturing Impact on Products and Supply Chains Product evolution Customization to customer requirements Increased product functionality Market responsiveness Low/zero cost of increased complexity 4 Business model evolution Mass customization Manufacturing at point of use Supply chain disintermediation Customer empowerment Design scope and flexibility 1 Stasis Design and rapid prototyping Production and custom tooling Supplementary or insurance capability Low rate production/no changeover 2 Supply chain evolution Manufacturing closer to point of use Responsiveness and flexibility Management of demand uncertainty Inventory reduction New business models Low Impact on Product and Supply Chain Supply Chain Impact High Impact on Supply Chain 11 Copyright 2016 Deloitte Consulting LLP. All rights reserved. 11

12 AM can help support production, maintain/improve performance Manufacturing low volume, high complexity, high cost components. Ability to efficiently produce at low volumes through reduced tooling, machining, material investment offers immediate opportunity for qualified parts. Joint Strike Fighter Components Technology used: Electron Beam Melting Reduces Buy-to-fly from 33:1 to ~1:1, reduces costs 50% and maintains component performance*. Source: 1. DU Press. 3D Opportunity in Aerospace and Defense Additive Manufacturing Takes Flight. 12 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

13 AM supports tooling and production Rapid mold development enhances productivity and reduces cost. e.g., 60% Injection mold cost savings, 50% cooling time reduction, 66% lead time reduction. Shaping Tooling Technology used: Various Molding (blow, injection, paper pulp, fiberglass lay-up, etc. ) Casting (investment, sand, spin, etc. ) Forming (thermoforming, hydroforming, stretch forming etc. ) 13 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

14 AM can alter speed to delivery, for example, to save lives 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. 14 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

15 AM can alter design, for example, to improve performance Component consolidation/simplification Provides opportunities to use AM in support of simplified product structures requiring fewer components, less assembly, and improved quality Aviation Company Technology used: direct metal laser sintering Fuel nozzles formerly involved assembly of 20 parts. The aviation company now uses AM to produce as a single unit reportedly 5x more durable than before. 15 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

16 AM can facilitate entirely new business models New business model development Provides opportunities to use AM to simultaneously alter both products and supply chains to create new ways of doing business. Orthodontic Device Company Technology used: Stereolithography Dentist creates digital model by scanning patient mouth and transmitting file to printing facility for creation of series of trays to move teeth to proper location in mouth. 16 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

17 Product Impact Each quadrant presents distinct opportunities to create value Approaches to capturing value in each quadrant vary widely, but all depend on additive manufacturing as an enabling capability. High Impact on Product Design for Functionality Business Model Innovation Printed metal alloy nozzles for engines have ~5X more durability and weigh 25% less. Previously the nozzles were produced from 20 separate machined pieces. An orthodontic device company deploys additive manufacturing to produce millions of patient-specific trays for patients in perhaps the single largest global application of the technology. Production Support Manufacturing On Demand Exploring and using AM to create components with high quality, low cost, and reduced lead times in support of product development and delivery. U.S. Military is making significant investments in piloting and deploying additive manufacturing supported supply chain processes. Low Impact on Product and Supply Chain Supply Chain Impact High Impact on Supply Chain 17 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

18 What to keep in mind Product Material options play a significant role in the production decision Tooling can shift the calculus toward AM Machine and material costs are typically the biggest cost drivers Production time and delivery time should both be considered Designing for AM can reduce material and other costs, while also helping to improve performance complexity is typically less limited by manufacturing capabilities 18 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

19 Deloitte Eminence: AM Makes its Business Case Our entire AM collection is available at DU Press 3D Opportunity Primer 3D Paths to Performance 19 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

20 Applying Additive Manufacturing to my Business: Drivers of Return on Investment (ROI)

21 IMPACT OUTCOMES PURPOSE Why are we here? Discuss how companies can evaluate the business potential and impact of AM Examine the important role that AM plays in the pursuit of performance improvement, innovation, and growth Understand the strategic framework for identifying AM paths and value Understand the direct and indirect costs associated with AM Understand how AM can be used to drive differentiation Determining how to: CHOOSE between the divergent AM paths and the associated capabilities CONSIDER the direct costs that drive AM and traditional production economics EVALUATE the indirect factors and establish how they can add dramatic value for your company and your customers 21 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

22 How can we understand AM paths? Understanding AM Paths & Value Path I Companies do not seek radical alternations in either supply chains or products, but they may explore AM technologies to improve value delivery for current products within existing supply chains. Path II Companies take advantage of scale economics offered by AM as a potential enabler of supply chain transformation for the products they offer. Path III Companies take advantage of scale economics offered by AM technologies to achieve new levels of performance or innovation in the products they offer. Path IV - Companies alter both supply chains and products in pursuit of new business models. Strategic Framework Current State Path I: Stasis Most current available perspectives on the economics of AM reflect a Path I bias. Companies deploy AM without significantly changing their business models. 22 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

23 How can AM add value? Research suggests that AM can add value in two fundamental ways: Direct and Indirect Costs and Differentiation. Examining the value of these key components can determine AM s ROI for your business. Adding Value Key Analysis Components AM has the potential to match traditional manufacturing methods on a direct and indirect cost basis for production applications. However, the drivers of direct and indirect cost differ substantially between the two approaches. Direct Costs Indirect Costs Time Design Invest AM technologies can help companies differentiate themselves by creating unique market offerings and positions, thanks to its ability to transform supply chains, products, and business models. Differentiation is driven by time and design. ROI 23 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

24 Direct Costs Currently, studies comparing the direct costs associated with AM and traditional manufacturing methods identify two elements as driving factors of ROI: 1 2 Materials Labor Traditional v. AM: Material costs in AM are significantly higher than the costs for traditional manufacturing. Differences are due to the extreme cost differentials that exist in the market between AM and traditional material. Impact: Analyses place material cost at around 30 percent of the unit cost for AM compared to percent for traditional methods. Additional Considerations: Material recyclability rates also drive costs. These rates vary by process, system, and application and should be evaluated as part of the business case. Traditional v. AM: No clear evidence exists of differences in the costs associated with labor rates. With AM, however, part simplification could result in substantial labor savings. Impact: Part simplification in certain cases for AM have led to a 67 percent reduction in assembly time. Additional Considerations: Training staff in AM technology increases the skills and capabilities of the workforce leading to increased retention and employee engagement. Retention is particularly important, given that losing talented workers in the competitive AM labor market can be a major issue for businesses, with the cost of replacing an employee estimated to be 150 percent of what the employee would earn annually. 24 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

25 Indirect Costs Currently, studies comparing the indirect costs associated with AM and traditional manufacturing methods identify three elements as driving factors of ROI: Tooling Traditional v. AM: For traditional manufacturing, the cost of tooling far outweighs the unit cost of each additional part. A key attribute of AM is its ability to improve or eliminate the costs of tooling. Impact: By eliminating the costs of tooling, AM can cut as much as 93 percent of the cost structure of traditional manufacturing. Additional Considerations: Beyond its production, AM also eliminates the need to maintain, store, and track tooling over long periods of time. Federated Machine Costs Model Traditional v. AM: Machine costs tend to dominate cost structures for AM applications, representing percent of total direct costs. Impact: Build volume, machine utilization, and depreciation can dramatically influence business-case comparisons of AM with traditional manufacturing methods. Additional Considerations: Managers must also think carefully about issues related to expected machine life and maintenance, as well as the implications of tax incentives. Centralized Inventory Model Traditional v. AM: AM brings production and delivery closer to their corresponding demand requirements. As a result, AM may significantly reduce the need for large inventory and lead times, a considerable cost in traditional manufacturing. Impact: AM reduces the costs associated with transportation of parts produced in multiple locations, inventory carrying costs, and obsolescence. Additional Considerations: Analyses identify that AM can also decrease the costs associated with holding and storing inventory. 25 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

26 Time is money Performance trade-offs related to speed over different segments of the business cycle are important considerations when analyzing the overall AM business case. Product Life Cycle As product life cycles continue to decrease, capital investment in traditional industrial tooling becomes less advantageous when considering ROI. Design Cycle Impacted by decreased product life cycles as well as the increased demand for user customization, speed to market becomes a crucial determinant of customer value. Delivery Speed Where traditional production methods may require centralized, even offshore, production, AM-enabled manufacturers are positioned to respond more quickly to customer demand. Production Speed AM technologies deliver product near net shape, in a single process, while steps related to casting, machining, and other processing for more traditional approaches must be considered. Market Responsiveness Accelerated product modification and changeover, due to reductions in tooling will improve market responsiveness. Market risk may also be reduced. 26 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

27 Designing for AM Venturing beyond path I in the AM framework to take advantage of these higher-value-added opportunities also means taking advantage of the inherent scope, functionality, and flexibility of AM technology set. Flexibility Economies of Scope The inherent flexibility of AM enables responsiveness to market demands, improving functionality and manufacturability with respect to more traditional models. AM utilizes economies in scope to facilitate an increase in the variety of products a unit of capital can produce, reducing costs and impacting design. Functionality AM lets designers focus on supporting the intended function of an object rather than on its manufacturability 27 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

28 Investment Information Management Developing an AM capability will require the necessary supporting Information Technology to develop and manage products through their lifecycle Some factors to consider include data storage, computing capacity, modeling and simulation software Production Equipment New production-capable AM systems can require millions of dollars of investment Investment considerations include machine purchase, housing, and maintenance Raw Material AM requires a continued investment in its raw materials for production. Kilo for Kilo, material costs can exceed their TM counterparts by times Increasing adoption of AM may lead to a reduction in raw material cost through economies of scale Workforce Development Organizations must invest in developing and delivering extensive training to establish a skilled workforce for design, engineering, and production Investment in technical training, leadership development and academic partnerships are potential ways to address talent gaps 28 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

29 AM in Practice Reviewing the impact and return derived from two organizations investment in AM technologies What is AM s ROI? Examining how 2 companies used AM to redesign parts for better performance and increased revenue. AM by the Numbers Invest GE announced their plan to build 3 new manufacturing facilities to drive innovation and implementation of AM across the company. The new facilities represent a $229 million investment. Rolls Royce invests $21.5 million to open its UK governmentbacked AM facility 13% Of all jobs in the US are linked to AM industries. 1 Optimize ROI GE redesigned its fuel nozzle using AM, taking an assembly of 20 parts that were joined by hand and reducing it to a single printed component. The updated nozzles will be 25% lighter and 5x more durable than the existing nozzles. Rolls Royce utilized AM to build the a 1.5 diameter front bearing housing for the Trent XWB-97 engine, the largest AM aero-engine part ever manufactured. The Trent XWB-97 will be the highest thrust engine ever certified by Rolls Royce. GE s LEAP jet engine will power narrow-body planes like the Boeing 737MAX and the Airbus A320neo. GE has already received 8,500 orders for the LEAP engine. Using AM decreased Rolls Royce s lead time for engine development, while providing significant design freedom. The Trent XWB is the fastest selling civil aircraft engine, with more than 1,500 engines sold to 41 customers. Growth in the revenues of AM production equipment and supplies in the last year. 2 $ 3.1 trillion 40% The overall impact of AM industries on the economy. This equates to 19% of US GDP. 1 Sources: 1. GE, The Workforce of the Future: Advanced manufacturing s impact on the global economy. April Wohlers Associates, Wohlers Report 2015: 3D Printing and Additive Manufacturing State of the Industry Annual Worldwide Progress Report. 29 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

30 Three key themes to the research and experience Strong potential to match traditional manufacturing methods on a direct-cost basis for low and moderate volumes (e.g. up to 100,000+ units). The drivers of direct cost substantially differ between the two approaches. AM can help companies differentiate by creating unique market offerings and positions. 30 Copyright 2016 Deloitte Consulting LLP. All rights reserved Deloitte Services LP

31 In a typical comparison with plastic injection molding Labor We find no clear evidence that labor rates systematically differ based on IM vs. AM Part simplification may reduce total labor rate: e.g., Reducing sub-components from three to one led to a 67% reduction in assembly time Materials There are extreme cost differentials between AM and traditional material feedstock. For example o Thermoplastics for AM can cost $ per kg, while those used for IM cost just $2 3 per kg o Metal powders at 100X!! Material recycle rates should be carefully evaluated. Consider process yield (e.g. buy-to-fly in aerospace) 31 Copyright 2016 Deloitte Consulting LLP. All rights reserved Deloitte Services LP

32 In a typical comparison with plastic injection molding Machine costs Machine costs can dominate the business case, representing percent of total direct costs Consider acquisition, depreciation, and taxes Build volume, utilization, and maintenance Tooling The cost of IM tooling can far outweigh unit costs for each additional part. o Studies show 93.5 percent of IM cost due to tooling! o Tooling must also be maintained, stored, and often tracked over long periods of time. A key attribute of AM is its ability to reduce or eliminate tooling costs. 32 Copyright 2016 Deloitte Consulting LLP. All rights reserved Deloitte Services LP

33 Example of a struggling business case Material Availability High, titanium is a relatively common material in this space. Multi-Material Not applicable, single material. Quality Concerns Low due to superior strength characteristics of titanium vs. most common material used for application (aluminum). Size Limitations DMLS build platform restricted to 25.4x25.4 cm. Objects not stackable. Limited to six units per production run. Systems cost ~$1 million each. Speed Limitation Estimated build time per production run is between 12 and 16 hours (depending on final object density). Material Cost Cost of materials nearly 10x that of titanium billet. Service provider estimates that this object could be delivered to the customer for approximately $1250. The same object machined out of titanium billet would cost approximately $80, a difference of approximately 1500 percent! 33 Copyright 2016 Deloitte Consulting LLP. All rights reserved Deloitte Services LP

34 Sample of an analysis of the business case for AM Comparison of AM (SLS) and Injection Molding for a small electrical component. Everything else! Tooling! Material Machine Everything else! Tooling! 34 Copyright 2016 Deloitte Consulting LLP. All rights reserved Deloitte Services LP

35 The flat cost curve for AM is well-established Average unit cost in AM is commonly viewed as invariant on volume. 35 Copyright 2016 Deloitte Consulting LLP. All rights reserved Deloitte Services LP

36 Product Impact The AM business case rests on more than direct part substitution Too often, the emphasis is on producing the same part and pushing it through the same supply chain. Speed to delivery Design scope and flexibility High Impact on Product 3 Additive Manufacturing Impact on Products and Supply Chains Product evolution Customization to customer requirements Increased product functionality Market responsiveness Low/zero cost of increased complexity 4 Business model evolution Mass customization Manufacturing at point of use Supply chain disintermediation Customer empowerment New business models Low Impact on Product and Supply Chain 1 Stasis Design and rapid prototyping Production and custom tooling Supplementary or insurance capability Low rate production/no changeover 2 Supply Chain Impact Supply chain evolution Manufacturing closer to point of use Responsiveness and flexibility Management of demand uncertainty Inventory reduction High Impact on Supply Chain Copyright 2016 Deloitte Consulting LLP. All rights reserved Deloitte Services LP

37 What to keep in mind 1. Emphasis on small, relatively complex, plastics 2. Watchful for larger metallic applications, especially with high material cost, machining, and/or buy-to-fly 3. Tooling can shift the calculus toward AM 4. Material costs key driver? Non-vendor sourcing? 5. Clear financial picture on machine costs: Depreciation, utilization, other incentives 6. Broad perspective on time: production vs. delivery 7. Aggressive pursuit of design for AM to reduce material & cost, improve performance 37 Copyright 2016 Deloitte Consulting LLP. All rights reserved Deloitte Services LP

38 Deloitte Eminence: AM Makes its Business Case Our entire AM collection is available at DU Press Additive Manufacturing Makes its Business Case 38 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

39 Applying Additive Manufacturing to my Business: Quality Assurance and Quality Control 39 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

40 Why should we care about quality? Overcoming the quality barrier can enable widespread adoption of additive manufacturing across industries. However, many challenges remain. One of the most serious hurdles to the broad adoption of [AM] of metals is the qualification of [AM] parts. 1 Traditional parts qualification negates the advantages of AM. Goal: qualify n of 1 parts produced anywhere. Alternatively, know when parts will NOT meet spec. A coordinated approach to the R&D challenges ahead is essential. Source: 1. Lawrence Livermore National Laboratory, Building the Future: Modeling and Uncertainty Quantification for Accelerated Certification, Science and Technology Review, January/February Copyright 2016 Deloitte Consulting LLP. All rights reserved.

41 The QAAM Pyramid: Starting at the top Achieving quality in AM parts is a multidimensional challenge. The QAAM pyramid is a framework for considering the most important elements. Reverse the paradigm. Focus on qualifying the combination of design, material, process, rather than end items. More than geometry ask: will this part do its job? 41 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

42 Tier 2: Mod/sim, sensing and feedback control Most quality assurance R&D focuses on digital simulations of the build process and sensing technologies within the build chamber. Build Planning Modelling & Simulation Feedback Control Build Monitoring In-Situ Sensing Digital simulations of the build process which predict resulting performance. Complete thermophysical system, generally with HPC. Examples: LLNL, LANL What if you could use sensor data to inform and update the build plan? Tightly control resulting material properties, geometry and performance. Examples: KU Leuven, 3DSIM, PSU Sense what s going on inside the build chamber Measure heat, light, vibration and also recording high speed video of the build process. Examples: UTEP, CONCEPT Laser 42 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

43 Tier 2: Mod/sim, sensing and feedback control Experimental results demonstrate the effect of feedback control on a 5 mm closed overhang a particularly challenging AM application. Without Feedback With Feedback Source: 1. J.P. Kruth, P. Mercelis, et al. "Feedback control of Selective Laser Melting," available at: accessed October 21, Copyright 2016 Deloitte Consulting LLP. All rights reserved.

44 Tier 3: Supporting factors Four quality enablers underpin the vision described above and together comprise the next layer of the pyramid. Standards As of October 2015 there are no broadly recognized, published standards for the production of AM parts. The area is, however, evolving rapidly. ASTM F42, AMF/3MF, America Makes, ANSI. Raw Materials A cake is only as good as the ingredients that go into it. Also true for additive. Care needs to be taken to help ensure quality of the of raw material, from sourcing, to handling, to shelf life to disposal. Calibration Robust protocols should be developed to manage and guarantee machine calibration. Maintenance also critical. Build Data Body of Knowledge Share detailed information about results of a build and the factors that contributed to its success/failure. Includes design, material, machine, build parameters, environment, etc.. 44 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

45 Tier 4: Strong information technology base Advancement and adoption of additive manufacturing will likely drive considerable IT requirements in the future. Information Management Information Assurance Data volumes will increase dramatically, primarily due to sensor data and records. Storing data is not enough, must be managed and accessible via digital thread. Securing data may also be challenging. Need to consider deliberate lapses in quality. 45 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

46 QAAM Pyramid Achieving quality in AM parts is a multidimensional challenge. The QAAM pyramid is a framework for considering the most important elements. 46 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

47 Tools/ Approach Quality Assurance Requirement Business & Practicality: QAAM continuum With perhaps a decade of R&D ahead, businesses should ask what the most appropriate quality tools are today, while also planning for the future. PRESENT A&D FUTURE A&D Low Medium High Manual inspection and mechanical testing Auditable process control QAAM pyramid 47 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

48 QAAM Continuum: Low You don t need an exotic sports car to drive to the grocery store. In some cases, the normal way of guaranteeing quality is just fine. L M H Principal QA tool(s) and description: Manual Mechanical Result: inspection visual or manual measurement of finished parts and comparison against specifications. testing testing of parts under laboratory loading conditions to design load (non-destructive) or to failure (destructive). individual parts pass/fail. Business enablers/conditions: Investment Training Low in existing test and inspection technology of workforce in traditional T&E methods QA requirements or non-critical application 48 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

49 QAAM Continuum: Medium The concept of auditable process control focuses on guaranteeing with sensors that the particular recipe for a part was followed exactly. L M H Principal QA tool(s) and description: Auditable Result: process control rigorous testing of a part printed under known conditions, quantification/codification of those conditions, and traceable, auditable reproduction of those conditions on other printers. all parts pass as long as desired conditions are maintained. Business enablers/conditions: Creation Robust Integration Information of an auditable manufacturing process, enabled by manufacturing IT. protocols to manage calibration of sensing technologies to verify compliance assurance becomes important 49 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

50 QAAM Continuum: High L M H The QAAM pyramid, realized and applied. Principal QA tool(s) and description: QAAM Result: pyramid advanced modelling, sensing, and feedback control work together to guarantee the quality of any part, on any machine with the capability to print it. quality for almost any part, or rejection of build plan up front if it cannot be built. Business enablers/conditions: Significant Marriage Supported Information investment in R&D to develop modelling, sensing and feedback control capabilities. of high-performance computing with manufacturing by enablers (see pyramid) management (10s-100s of TB) and information assurance are critical 50 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

51 Conclusion Quality is situational and significant R&D challenges remain. Firms seeking to qualify AM parts should plan for both today and tomorrow. Evaluate the level of QA needed for each part/application. Consider using the low end of the QAAM continuum while developing high end capability for the long term. Understand the data management challenges that lie ahead. Assess not only which path to value you are on today, but where you want to be tomorrow. QAAM may enable that shift. 51 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

52 Deloitte Eminence: Quality Assurance in Additive Manufacturing Our entire AM collection is available at DU Press Quality Assurance and Parts Qualification 52 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

53 Applying Additive Manufacturing to my Business: Digital Thread 53 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

54 Invention vs. Innovation Effectively turning an invention into an innovation at scale requires that the invention be part of the right system. Invention Right System Innovation The Light Bulb 1802: Humphry Davy invented the first electric light s: Multiple inventors also created light bulbs but no designs emerged for commercial application July 24, 1874: a Canadian patent was filed by a Toronto medical electrician named Henry Woodward and a colleague Mathew Evans who were unable to commercialize, so they sold the patent to Thomas Edison in , Edison filed a patent for an electric lamp with a carbon filament, extending the life of the bulb for practical use 1800: Italian inventor Alessandro Volta developed the first practical method of generating electricity, the voltaic pile : Edison develops wiring system that could support multiple lamps and built his own power system to support multiple users with multiple lamps 1881: Edison set up an electric light company Source: Acton, Jim. "Light Bulb." How Products Are Made Encyclopedia.com. 24 Feb < 54 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

55 The Digital Thread is the system that links models and data required to produce quality AM parts SCAN / DESIGN + ANALYZE BUILD + MONITOR TEST + VALIDATE DELIVER + MANAGE Build Simulation In-situ feedback Design Scan CAD File Traditional Analysis (FEA, CFD) Adv. Multiphysics Modeling / Simulation Detailed Build Plan Machine Data 3DP Build Process (Physical Part) In-situ monitoring Per-Part Post- Processing + Finishing Part Inspection (Testing, NDE, etc..) Data Verification + Twinning Part Field Service Sensing + Inspection Part EOL Machine Selection 55 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

56 Many components make up the DTAM but where does one start to build it? Post Production Tracking Certified Quality Standards Training Standards AM Design Analysis Tools Finite Element Analysis / Method AM File Format Enterprise Management Tools Internet of Things Post-Processing Equipment Computing Power Nondestructive Inspection / Examination Certified Performance Standards In-Process Monitoring File Analysis Cost Optimization Certified Raw Materials CRM for AM Computer Aided Design PLM Configuration 3D Scanning Computational Fluid Dynamics Order Management 3DP Operators Product Data Additive Manufacturing Management Integrated Computational Materials Engineering Quality Management Build Analytics Multidiscipline Engineers Build Sensors Dynamic Demand Analysis Secure Storage Usage Sensors Dynamic Network Optimization Feedback Loop to Simulations AM Simulation Machine Control Rendering Licensing & Attribution Version Control AM Designers Watermarking Light Weighting Reporting Data Warehousing NDE Equipment NDE Handling Certified Machine Standards Digital Twin Multiphysics Modelers Supply Chain Data Transfer Tracking Machine Selection Version Control 56 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

57 SKILLS DATA SOFTWARE HARDWARE How can we conceptualize DTAM? The ecosystem is just starting to form and has major gaps. Still Evolving SCAN / DESIGN + ANALYZE BUILD + MONITOR TEST + VALIDATE DELIVER + MANAGE Build Simulation In-situ feedback Design Scan CAD File Traditional Analysis (FEA, CFD) Adv. Multiphysics Modeling / Simulation Detailed Build Plan Machine Data 3DP Build Process (Physical Part) In-situ monitoring Per-Part Post- Processing + Finishing Part Inspection (Testing, NDE, etc..) Data Verification + Twinning Part Field Service Sensing + Inspection Part EOL Machine Selection Computing Power 3D Scanners Certified Raw Materials Build Sensors Post-processing Equipment Data Warehousing NDE Equipment Usage Sensors 3D Scanners AM Design Multiphysics Modelling PLM Configuration AM Simulation Build Analytics Feedback Loop to Simulations Dynamic Network Optimization Cost Optimization Digital Twin Version Control Supply Chain Tracking AM File Format Training Standards Certified Machine Standards Data Transfer BOM & Config Mgmt Machine Selection Certified Quality Standards Certified Performance Standards AM Designers Multiphysics Modelers Multidiscipline Engineers 3DP Operators Post Production Qualify 3DP & Materials Qualify Assurance & Mgmt NDE Handling CRM for AM Dynamic Demand Analysis PLM & ERP Integration Intellectual Property Protection Cyber Security

58 Data Volumes Computing Power What are the critical demands of DTAM? The ecosystem is just starting to form and has major gaps. Needs to be developed SCAN / DESIGN + ANALYZE BUILD + MONITOR TEST + VALIDATE DELIVER + MANAGE Build Simulation In-situ feedback Design Scan CAD File Traditional Analysis (FEA, CFD) Adv. Multiphysics Modeling / Simulation Detailed Build Plan Machine Data 3DP Build Process (Physical Part) In-situ monitoring Per-Part Post- Processing + Finishing Part Inspection (Testing, NDE, etc..) Data Verification + Twinning Part Field Service Sensing + Inspection Part EOL Machine Selection

59 Product Impact Escaping Stasis will depend on integrating elements of DTAM Stand alone machines are fine for a prototyping lab but distributed and/or advanced production will depend on much more. Breaking the Scope (Product) tradeoff will largely (if not exclusively) depend on the ability to verify the quality and design of complex manufactured components. High Impact on Product 3 Additive Manufacturing Impact on Products and Supply Chains Product evolution Customization to customer requirements Increased product functionality Market responsiveness Low/zero cost of increased complexity 4 Business model evolution Mass customization Manufacturing at point of use Supply chain disintermediation Customer empowerment Breaking the Scale (Supply Chain) tradeoff will largely (if not exclusively) depend on the ability to verify delivery, security, execution, and consistency of digital model-based production. Low Impact on Product and Supply Chain 1 Stasis Design and rapid prototyping Production and custom tooling Supplementary or insurance capability Low rate production/no changeover 2 Supply Chain Impact Supply chain evolution Manufacturing closer to point of use Responsiveness and flexibility Management of demand uncertainty Inventory reduction High Impact on Supply Chain 59 59Copyright 2016 Deloitte Consulting LLP. All rights reserved. 59

60 Enablers to Achieve Precision Why is DTAM important for Quality/Complexity? DTAM enables AM to function at the high end of the quality continuum. Quality/Complexity Continuum DTAM is an enabler to achieve precision Less Precision High Quality/Complexity Standalone Machines Good enough geometry Less precision required / necessary Less focus on high end quality Existing test and inspection technology Training of workforce in traditional testing and evaluation methods Advanced modelling, sensing, and feedback control capabilities. Specialized high-performance computing resources Management and assurance of 10s- 100s of TB of data produced Increase quality standards with enhanced geometries, functionality, and melt pool Enables high precision with increased microstructures through AM DTAM enables high precision, high quality parts. 60 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

61 Design Manufacture Customers Distribute Why is DTAM important for Distributed Manufacturing? DTAM enables distributed manufacturing. Distributed Manufacturing Continuum DTAM is an enabler of digital distribution Design Traditional Manufacturing Asset intensive production Single points of production Long term cost recoup Disparate data sets / control Key Enablers of Distributed Manufacturing QA certification at a distance Delivery assurance despite geographic dispersal Real-time synchronization of promiscuous associations with vendors and partners Common data standards Information assurance IP protection and cybersecurity Data management and storage Dynamic optimization of vendors price competition Visibility throughout system on vendor availability DTAM enables distributed manufacturing. Manufacture at point of use Distributed Manufacturing Diversified points of production Temporary associations Exponentially larger data amounts Total landed cost optimization Large info flows to/from temporary partners Complexity is not free 61 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

62 Who might be some early adopters of DTAM? Verticals that will likely adopt the DTAM are driven by high quality requirements and wide-spread distribution. High Quality//Complexity Optimal Process Control Network Economics & Process Control No Distributed Manufacturing Oil/Gas Production Computer/Electronics Medical Devices & Implants Transportation Equipment Full Distributed Manufacturing Apparel/Textiles Appliances DTAM Not Required Optimal Network Economics Low Quality/Complexity 62 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

63 What to keep in mind Additive manufacturing offers the promise of true product and supply chain innovation o. But full realization requires a system, not a machine. Digital Thread technologies are still very much fragmented and emerging o Identify ecosystem partners that are tracking and investing in point and integrated solutions (reminds me of our pre-erp days ) Developing an overall strategic intent for AM will help target DTAM investment. Are you trying to: o Produce what you could not before? o Produce where you could not before? 63 Copyright 2016 Deloitte Consulting LLP. All rights reserved Deloitte Services LP

64 Deloitte Eminence: Digital Thread Our entire AM collection is available at DU Press 3D Opportunity and the Digital Thread 64 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

65 Conclusion

66 Recapping our session. Engaging in additive manufacturing is not simply buying a printer You need to be aware of the implications to your ROI, your workforce, the quality of your product and the digital thread Now, when you think of additive manufacturing, what comes to mind? Let s hear from you 66 Copyright 2016 Deloitte Consulting LLP. All rights reserved.

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