The 3D printing industry is expected to change the landscape of the manufacturing industry over the next decade. The technology has been around since 1980s; however, more recently, it has come into the spotlight. Industry experts are extremely excited about the prospects of 3D printing. At the moment, the industry is getting a lot of attention from investors, government agencies and corporations. However, despite all the attention, some people remain unconvinced by the potential of 3D printing, and still doubt the economic viability of the industry.
I strongly disagree with the skeptics and believe that the 3D printing industry will be an extremely important part of the industry and our daily lives. In this article, I will try to explain the uses and how this industry can change the manufacturing industry. I will try to elaborate on the economic viability of the industry in the following paragraphs.
3D printing can be categorized into hobbyist 3D printing, where people with comparatively cheap machines print plastic objects in their homes; and industrial 3D printing, which is usually called additive manufacturing (AM).
How Can 3D Printing/Additive Manufacturing Revolutionize Manufacturing Industry?
- Additive Manufacturing can impact the manufacturing industry in more than one way. Some of the uses of Additive Manufacturing are listed below.
- Additive Manufacturing can alter the assembly line; a lot of stations can be eliminated by the use of AM. Some pieces can be produced at a single station and it can eliminate the need of assembling these products at different stations.
- AM can eliminate the use of outsourced products. At the moment, a lot of parts are produced in different factories and brought to the final product assembly station, which can be time consuming. AM can allow the manufacturing process to go smoothly by producing custom parts close to the final product assembly station.
- The current manufacturing process involves creating a vast range of tools, and it can sometimes be time consuming if there is a change needed in the manufacturing process. However, AM eliminates the need of making molds.
- On the supply chain front, AM can allow the company to manage its inventory better. Parts/final products can be printed according to the needs of the customer on demand. As a result, warehouses might not be needed, and it will present the companies with a serious option to cut down the costs.
- And finally, the need of labor will be reduced substantially. Companies will be able to reduce costs on labor. On the other hand, this might become a problem in some countries due to the political impact of unemployment. Another advantage of AM is the decrease in waste; AM results in less waste of raw material.
Why did 3D Printing Take So Long to Come To the Front?
Questions are raised about why this industry has not played an important role before, since it has been around for over two decades now. Why didn't manufacturers adopt this technology before? There can be many reasons. First, manufacturers are usually afraid of disrupting the flow of operations and are reluctant to introduce a new technology. There are very few organizations that consistently adopt new technologies and alter their manufacturing processes. Companies are especially reluctant if a technology is as revolutionary as 3D printing and it has the capability of completely altering the manufacturing process.
Secondly, a technology does not become mainstream until it can be used in the final products. At the moment, 3D printing is moving from just being a tool to provide prototypes to the technology that can provide the final products. Personal computers and printers were not adopted in a day; it took time for people to adopt these products, and lowering the price and making these products affordable played an important role. The same is now happening to 3D printing. The availability of cheap 3D printers has attracted a lot of people, and according to a Wohlers report, there are now over 23,000 3D printers in the market, compared to just 355 units in 2008.
Who is Using 3D Printing/Additive Manufacturing?
Additive Manufacturing is being used a lot more than it used to be 10 years ago. As I said above, the technology is now moving from prototyping to producing the final products. The next step will be the transition to mass production, which I believe will be achieved as the technology is refined over time. We are seeing a lot of interest from different sectors of the economy, and organizations are spending a substantial amount of money to exploit the potential of this technology. Recently, Nike (NYSE:NKE) used 3D printing to produce some components of boots for American athletes. 3D printing can help the company manufacture better and more efficient boots in the future according to the needs of a player. BMW is using industrial 3D printer by Stratasys (NASDAQ:SSYS) to manufacture jigs and fixtures. Whenever the company needs to modify the manufacturing process, it prints jigs and fixtures using the 3D printer. BMW has been able to save 58% in costs and 92% in time by using these tools.
Furthermore, 3D printing is becoming an integral part of healthcare sector. Dental fixtures, prosthetic limbs and hearing aids have already been made using 3D printing. However, 3D printing is now being used in more complex and finer structures. Organovo is using 3D printing to create functional human tissues for regenerative therapies and research. There is also a misconception about 3D printing that it can only be done with plastic. Titanium and various steel alloys are being used to print different objects. However, as the industry grows, it is not out of question that we will see more materials used in 3D printing. The biggest conglomerate in the world, General Electric (NYSE:GE), also acquired a small company to use 3D printing for its aviation arm. The company will use 3D printing to create some parts for its jet engines.
Economic Potential of the Technology
3D printing can have a big impact on the global economy and production of products close to consumers can alter international trade. A lot of companies may not need to go to China to get the components for their products. However, we are still some way off from this change. Furthermore, it is difficult to accurately predict the revenues and cash flows potential of the technology. It is clear that the corporations and governments are exploring the ways to use this technology, but it is unclear how big a monetary impact this technology will have. At the moment, the global economy is worth around $62 trillion, and manufacturing accounts for almost 17% of the total global economy. If 3D printing is able to even affect 5% of the manufacturing industry, the total size of the 3D printing industry will be above $500 billion, which will dwarf the current size of $1 billion. As I said above, it is extremely difficult to accurately predict the monetary potential or put a number on such revolutionary technology. However, the potential is clear for everyone to see.
Companies Operating in the Industry
3D systems (NYSE:DDD) and Stratasys are the biggest players in the 3D printing industry. However, there are some smaller players also operating in the industry. As the industry grows, these companies might become more competitive players. 3D Systems is catering to the customer as well as business market. The company has been acquiring aggressively to increase its footprint in the market. Please refer to my previous article about the company for detailed analysis. On the other hand, Stratasys is mainly focusing on the manufacturing industry. The company also makes desktop printers; however, the industrial printers are the main products of the company. Makerbot industries is another player in the market focused on the hobbyist segment. The company offers basic, cheap 3D printers for mostly small-scale use. The market for Makerbot is small at the moment as the personal 3D printing market is at its embryonic stages. However, there is a lot of room for the company to grow as the market segment grows.
3D printing is not only about 3D printers and materials; software used in the design is equally important. As a result, it gives an opportunity to software companies as well to take advantage of the potential present in this industry. Autodesk Inc. (NASDAQ:ADSK) is currently the leader in this segment. The company makes software to be used in industrial design. There are also reports that Google (NASDAQ:GOOG) is also looking to enter into the professional designing software market. The company already has a software called SketchUp; however, it may look to introduce a more professional and sophisticated software for industrial use. Microsoft (NASDAQ:MSFT) might also want to enter the market once the industry takes off.
3D printing is still in its infancy, and I see the industry growing well in the future. Its use will be extremely important in the manufacturing industry. 3D printing can become an important player in medical, aerospace and other manufacturing industries. The industry has already reached over $1 billion; however, I believe it is still a long way from realizing its true potential. Recent focus on the technology suggests that it will take off soon, and the companies operating in the 3D printing industry are set to grow substantially over the next decade. Especially, 3D systems and Stratasys will benefit heavily from the boom in the industry.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.