Identify the Value in an Enterprise-Wide Deployment of Additive - - PowerPoint PPT Presentation

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Identify the Value in an Enterprise-Wide Deployment of Additive Manufacturing

Chris Krampitz, P.E. Stratasys Consulting Principal Consultant - Americas

Complex Electronic Instruments & Electrical Medical Devices

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 Identify industry challenges addressed by Additive Manufacturing (AM)  Define the potential benefits from enterprise-wide AM deployment  Explain approaches to identify and define enterprise-wide AM value

Objectives

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Our Expertise

Section One

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Stratasys at the forefront of digital manufacturing for over 25 years

Innovation

• Over 1,200 granted
• r pending AM

patents globally

• Over 150,000

systems sold

• Over 30 technology

& leadership awards

AM Solution Ecosystem

Industrial Machines Industrial AM Contract Manufacturer Deep Vertical Market Expertise Materials Development AM Software Prototyping Machines Technical & Commercial Consulting Services

Global AM Leadership Deployment

• $696 MILLION in

revenue (2015)

• Comprehensive

ecosystem to facilitate the adoption and integration

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Depth & expertise to address key obstacles in AM adoption & integration

Team of technical & commercial people ready for deployment … …to apply their expertise to capture the maximum value from AM

Advanced Design & Simulation 3D Printing Materials 3D Printing Technologies Post Processing Testing & Inspection Regulations & Standards Quality Management Supply Chain Management Strategic Management

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Transformation in Product Realization Enabled by AM

Section Two

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Transformation in Product Commercialization

Mass Production Economies

• f Scale

Product Distribution Mass Customization Economies

• f Scope

Distributed Manufacturing Design for Manufacturing

Current State: Mass Production & Centralized Manufacturing Emerging State: Mass Complexity & Distributed Manufacturing

Design for Use

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Rise of Mass Complexity & Distributed Manufacturing

5,000 10,000 15,000 20,000 25,000

50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 2008 2010 2012 2014 2016F 2018F 2020F 2022F

Global AM installations are growing rapidly…

# of installed machines

$- $20,000 $40,000 $60,000 $80,000 2012 2013 2014 2015 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F

(USD million) Expected 30% CAGR

$30B $ 9B $ 8B $ 10B $ 11B

AM technology is fueling the creation of distributed manufacturing networks …fueled by the growth in manufacturing Manufacturing networks are allowing mass complexity & better designs

U.S. 38% Germany 9% Japan 9% China 9% N.A. 40% Europe 28% APAC 27% 2015 Distribution of Capacity

Independent Designers (US)

20K (2006) to 220K (2016)

Microfactories

$425M (2008) to $3,574M (2015)

Innovation Platforms Elements of the Manufacturing Network AM contract manufacturer on average uploads & prints 120K new designs per month Development time for new designs is over 90% faster

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AM is catalyzing changes in the conceptualization, design, and production processes (1 of 2)

Product Co-Development Real-Time Market Testing Optimal Market Selection

• Increases likelihood of product launch success
• Increase customer loyalty
• AM prototypes to validate user requirements
• Rapid identification of worthy product concepts
• Decreases market research costs
• AM pre-production prototypes to conduct “split testing” across

markets

• Selective specialization across target markets
• Identify modularization across market segments
• AM used for small scale production in specialized markets

1 2 3

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AM is catalyzing changes in the conceptualization, design, and production processes (2 of 2)

Production Scale Up Maintenance & Sustainment

• Rapidly identify product variants warranting large scale

production across market segments

• AM used for production of complex parts and for manufacturing

tooling

• AM used to producing low turnover spare parts and to produce

tooling for moderate turnover spare parts 4 5

• Increase speed to market by over 50%
• Increase part consolidating by over 20%
• Decrease tooling costs by over 50%
• Decrease unit total landed cost by over 15%

Potential Benefits from AM Technology

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Market for Complex Instruments and Medical Devices

Section Three

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Complex Electronic Instruments & Medical Devices

Computer & Peripheral Equipment Semiconductor & Components Electrical Equipment Batteries Electromedical Navigation & Guidance Instruments Fluid Flow Instrumentation Measurement of Electrical Signals Analytical Laboratory Irradiation Apparatus

High complexity, high value assemblies that must meet strict regulations and standards

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Key Trends in the Electronics Manufacturing Industry

Cost Reductions Increased Complexity of Devices (e.g., smart and green) Strategic Partnerships to Acquire Competencies Emphasis on Logistics for Rapid Delivery

SOURCES: Infor, Euromonitor, RayMing Technology, Technavio, IPC, PwC, Cerasis, Stratasys Consulting

Traditional Electronic Manufacturing Service Joint Development Manufacturing Outsourced Design Manufacturing

Increased Level of Outsourcing by OEM

AM can help address the increased complexity in products, manufacturing, and supply chain to meet business goals

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Key Issues in the U.S. Electronic Medical Device Segment

50 100 150 200 250 300

U.S. medical device industry has experienced a long term decreased in growth…

CAGR 10.5% CAGR 5.2% 0.5 1 1.5 2 2.5 R&D Expense Revenue FDA Clearances Enterprise Value 2.09 1.79 0.92 0.83 CAGR 3.7% Revenues (USD billions)

…enterprise value, and new product introductions despite substantial increases in R&D expense

0% 10% 20% 30% 40% 50% Competition & price pressure R&D Efficiency Regulations Competitive advantage Supply chain risk Product launch

What do you see as the biggest challenge for your business over the next 12 to 24 months?

0% 10% 20% 30% 40% 50% 60%

How would you describe your company’s strategic focus?

Engineering/innovation led Sales led Manufacturing led Supply chain led

SOURCES: Evaluate Group, FDA, Forbes, Stratasys Consulting

(% of Respondents) (% of Respondents)

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AM can be a strategic element in addressing industry issues…

0% 20% 40% 60% 80% 100%

Traditional Cost 23% 30% 10% 15% 1% 6% 1% 13%

Patient Benefits:

• Diagnosis & therapy choice
• Patient specific medical devices
• New solutions to health issues

Potential Decrease in Total Landed Cost from Using AM

Manufacturer Benefits:

• Decreased inventory costs
• Efficient use of high-value material
• Increased productivity (COGS &

assembly costs)

• Faster time to market

Concept & Design Engineering Development Proof of Concept FDA Review

6-12 months 24-36 months 510(k): 0-9 months PMA: 9-36 months 510(k): 3-5 months PMA: 12-24 months

3-7 years w/o AM

Potential Decrease in Time to Market from Using AM

1-4 years w/ AM

Life Cycle of Medical Device 18-24 months

Estimated 20% Return On Investment

SOURCES: U.S. Census Bureau, Department of Commerce, US FDA, Stratasys Consulting

Health Provider Benefits:

• Improved clinical outcomes
• Decreased procedure duration
• Decreased total costs

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…but manufactures have capture only a dearth of the value from AM

10 20 30 40 50

Quality & Regulations Expertise Technology cost Multiple material Material availability Application Identification Printer speed Build volume (% of Respondents)

AM applications make up only 0.01-0.05% of industry shipments

SOURCES: PwC, EY, Department of Commerce, Stratasys Consulting

Manufacturers’ Obstacles to Adopting Additive Manufacturing

Today’s Focus

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• Define clear business goals derived from

business unit strategy

• Develop a digital manufacturing vision &

strategy; have the end-goal in mind

• Manage change; build momentum
• Build/acquire/borrow expertise & capacity

at the right times in your plan

• Mind quality and safety (standards and

regulations)

Key Considerations for Enterprise-Wide Deployment of Additive Manufacturing Technologies

Identify Validate Create Deliver

Deployment Model Key Considerations

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Identify & validate the expected value from AM for new product introductions

Strategic Plan Sensing & Discovery Idea Generation

Product Improvement/Introduction Approach

Portfolio of Opportunities Select areas with high potential for large contributions towards business goals Idea Collisions

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Identify & validate the expected value from AM across the supply chain

Business Goals Inventory Distribution Manufacturing Portfolio of Opportunities Select areas with high potential for large contributions towards business goals

Supply Chain Improvement Approach

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Case Studies

Section Four

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Case Study #1: Clinical Chemistry Laboratory Equipment Manufacturer (1 of 2)

Situation

• Client had a line of clinical chemistry laboratory equipment

generating approximately $1.5 billion per year

• Supply chain suffered from high inventory, distribution, and

manufacturing costs relative to peers

Obstacles

• Equipment is complex, consisting of over 20,000 of high cost

electronic and mechanical assemblies/components

• Equipment had to meet standards and regulatory requirements

(IEC 61010 and FDA CFR 21)

• Client had relatively concentrated manufacturing serving the

world: 7 in the Americas, 4 in EMEA, and 2 in APJ

• Organization lacked staff with a sufficient technical

understanding of the additive manufacturing technologies

• Organization lacked the resource capacity to apply new

manufacturing technologies

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Case Study #1: Clinical Chemistry Laboratory Equipment Manufacturer (2 of 2)

Actions

• Stratasys Consulting supported client in defining business targets:

inventory cost reduction by $5M, manufacturing cost reduction by $10M, and distribution costs by $2M.

• Stratasys Consulting facilitated over 100 client staff in identifying

potential applications for supply chain improvement

• Stratasys Consulting conducted facility walkthroughs and supply

chain data analyses to validate and identify new applications across 3 facilities in 6 weeks

Results

• Stratasys Consulting was able to increase operating profit by 15%
• Identified over 200 assemblies/parts to reduce manufacturing costs

(i.e., high cost)

• Identified over 100 assemblies/parts to reduce inventory costs (i.e.,

high cost and slow moving)

• Identified AM part suppliers to reduced transportation costs

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Case Study #2: Semiconductor Lithography Equipment Manufacturer (1 of 2)

Situation

• Client had a line of semiconductor lithography machines generating

approximately $1.2 billion per year in revenue

• Manufacturing backlog was approximately 120 days of sales; mostly due to

time to long lead parts

• Operating margin were approximately 0.5% with the cost of the machines

running upwards of $40M

Obstacles

• Equipment is complex, consisting of high cost electronic and mechanical

assemblies/components

• Equipment had to meet standards and regulatory requirements (NFPA 79,

UL 508, UL 746, OSHA 1910, and EU Machinery Directive)

• Client had mismatched manufacturing faculties (2 in the Americas, 1 in

EMEA, and 2 in APJ) with over 70% of demand in APJ

• Organization lacked staff with a sufficient technical understanding of AM
• Organization lacked the resource capacity to apply new technologies

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Case Study #2: Semiconductor Lithography Equipment Manufacturer (1 of 2)

Actions

• Stratasys Consulting supported client in defining business

targets: manufacturing cost reduction by $30M and backlog reduction of $100M

• Facilitated over 50 client staff in identifying potential

applications for supply chain improvement

• Conducted facility walkthroughs and supply chain data

analyses to validate and identify new applications across 7 facilities in 12 weeks

• Develop supply chain improvement plans beyond those created

by additive manufacturing

Results

• Stratasys Consulting was able to increase operating profit by

5% and decrease backlog to 100 days

• Identified over 300 assemblies/parts to reduce manufacturing

costs (i.e., high cost) and to improve lead times

• Identified AM part suppliers to improve lead times

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• Enterprise Value Growth
• Change Requires Justification
• Systematic Methods Focused on Business Goals
• New Competencies Required

Key Takeaways

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Questions

Chris Krampitz, P.E.

Principal Consultant Stratasys Consulting 9600 West 76th Street Eden Prairie, MN 55344 T: +1 773 480 5808 E: Chris.Krampitz@Stratasys.com

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Stratasys Consulting

Vision

• Be the catalyst for the adoption & integration
• f digital manufacturing technologies
• Be the select partner of designers, manufacturers,

retailers, & government agencies

• Be the source of expertise & capacity necessary

to exploit rapidly evolving manufacturing technologies

Focused on Digital Manufacturing Ecosystem

Manufacturing Digitization Automation Additive Manufacturing

Mission

Accelerate the identification, creation & delivery of value from AM for manufacturers