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

PROCESS INDUSTRIES

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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 30 technology

and 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)

• Over 150,000

systems sold

• 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 and 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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AM-ENABLED MANUFACTURING TRANSFORMATION

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 and Centralized Manufacturing Emerging State: Mass Complexity and Distributed Manufacturing

Design for Use

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RISE OF MASS COMPLEXITY AND 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

# 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 Elements of the Manufacturing Network …fueled by the growth in manufacturing Manufacturing networks are allowing mass complexity and 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

AM contract manufacturer on average uploads & prints 120K new designs per month Development time for new designs is over 90% faster

SOURCES: Wohler’s Report 2016, BLS, UL SOURCES: Wohler's Report 2016, MorganStanley, UL SOURCES: Wohler's Report 2016, MorganStanley, UL SOURCES: Shapeways, Wohler’s Report 2015, PDMA, UL

Global AM installations are growing rapidly…

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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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In which areas in the product realization process is your organization MOST interested in applying additive manufacturing technologies? (Select One) A. Product Co-Development B. Real Market Testing

• C. Optimal Market Selection / Small Production Runs
• D. Production Scale Up / Bridge Tooling

E. Maintenance & Sustainment F. Other

POLL QUESTION #1

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PROCESS INDUSTRIES LANDSCAPE

Section Three

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PROCESS INDUSTRIES

Food Beverage Pulp & Paper Printing Oil & Gas Resin & Plastic Products Chemicals & Pharmaceuticals Utilities

• High complexity, high value assemblies & processes
• Short lead time requirements & rapid development
• High change over costs

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CURRENT STATE OF THE PHARMACEUTICAL SEGMENT

SOURCES: U.S. FDA, Evaluate Group

Segment has experienced prolonged low growth

Global Drug Sales (USD billions) $0 $200 $400 $600 $800 $1,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 Prescription Generics Orphan

Development costs have been hard to reduce

$0 $1 $2 $3 $4 $5 $6 10 20 30 40 50 60 2008 2009 2010 2011 2012 2013 2014 2015 2016

Global Number of New Molecular Entities

Costly developments fail to reach the market

10 20 30 40 50 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of NME & BLS Global R&D Spend per NME (USD billions) CAGR = 2.2%

U.S FDA Fillings U.S. FDA Approvals

0% 20% 40% 60% 80% 2013 2017

Contract Manufacturers Share of COGS

Complexity has increased demand for

• utsourcing

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KEY TRENDS IN BIOPHARMA CONTRACT DEVELOPMENT AND MANUFACTURING

SOURCES: Pharmaceutical Manufacturing, Pharmaceutical Processing, Contract Pharma, CPhI Pharma Insights

Increased Demand for Broader Services Management of High Potency Substances Rising Demand for Inspection Technology Single Use Components Smaller & Specialize Production Runs

• Supply chain consolidation
• Flexible manufacturing
• Offloading more product

development

• Equipment and process

complexity

• Product complexity

Trends that additive manufacturing technologies are well suited to address

Overall Equipment Effectiveness

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TRENDS IN THE FOOD & BEVERAGE PROCESSING SEGMENT

SOURCES: BCC Research, Rabobank

Processing & Packaging Equipment Growth

Global Revenues (USD billions) $0 $10 $20 $30 $40 2015 2020 Processing Packaging

CAGR = 4.2%

• FDA Food Safety Modernization Act
• Accurate sorting to reduce waste
• More compact manufacturing
• Inspection for smaller foreign particles
• Automation consolidating processing
• Energy efficiency

Processing

• Standardizing for ecommerce
• Reduction of food waste; safety
• Commercializing packaging innovation
• Holistic packaging

Packaging

Key Pressure on Food Companies

• Greater variety and innovation due to

shorter product life cycles

• Growth of newer, smaller brands
• Rationalization of costs and improve

returns on capital

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Process Intensification in the Oil & Gas and Chemical Segments

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AM CAN BE A STRATEGIC ELEMENT IN ADDRESSING INDUSTRY CHALLENGES

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

Traditional Cost 40% 15% 15% 7% 1% 6% 1% 17%

Quick Wins:

• Accelerating new product development
• Enhancing quality through rapid prototyping
• Customized fabrication tooling
• Reducing tooling costs in product design

Potential Decrease in Total Landed Cost from Using AM 3-5 years w/o AM Potential Decrease in Time to Market from Using AM <1-2 years w/ AM

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

Near-Term Benefits:

• More complex designs driving weight

reductions and incorporation of electronics

• Reducing assembly and production

costs through simplification

Medium-Term Benefits:

• Customization and improved market

responsiveness

• Smaller supply chains with greater

contributions from members

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What is your organization’s manufacturing readiness level for AM technologies? (Select One) A. Considering AM; no significant investments B. Conducting AM research on products

• C. Producing systems/assemblies in mock production environment
• D. Developing stable manufacturing and supply chain processes

E. Conducting low rate initial production runs (piloting) F. Conducting full rate production runs

POLL QUESTION #2

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What is the LARGEST obstacle for adopting and integrating AM technologies in your organization? (Select One) A. Quality Assurance B. Regulatory Compliance

• C. Identification of Applications and Value
• D. AM Expertise

POLL QUESTION #3

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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 Identification

• f Applications

& Value 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

and strategy; have the end-goal in mind

• Manage change; build momentum
• Build/acquire/borrow expertise and

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 AND 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 AND 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: INNOVATOR OF CHEMICAL PROCESS TECHNOLOGY (1 OF 2)

Situation

• $800 million developer of chemical process

technology

• Existing chemical reactor technology

underutilized costly catalyst (25-30%)

• Reactor technology failed to achieve target

conversion (60% single pass conversion)

Obstacles

• Complex fluid dynamics and catalytic reactions
• Large scale structures; costly to test & operate
• Strict standards and regulatory requirements

(ASME, API, EPA)

• Lack of sufficient technical understanding of

AM and resource capacity

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CASE STUDY #1: INNOVATOR OF CHEMICAL PROCESS TECHNOLOGY (2 OF 2)

Actions

• Facilitated over 30 client staff in innovation workshops

across 3 product categories in 9 weeks

• Refined ideas into concepts and conducted feasibility

assessments

• Conducted cold-model model experiments and CFD

analyses of new designs

Results

• Increased catalyst utilization to over 95% and single

pass conversion to 80%

• 100 tools, jigs, and fixtures reduced CAPEX
• 50 assemblies/parts to reduced working capital and

lead times

• Institutionalized AM among suppliers

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CASE STUDY #2: BIOPHARMA CONTRACT DEVELOPMENT & MANUFACTURER (1 OF 2)

Situation

• $1.9 billion CDMO with highly customizable

services and processes

• Demand for additional capacity (+15%)
• Change over costs (~20% of COGS)
• On-time delivery of 70%

Obstacles

• Complex process configurations for broad

products

• Highly regulated environment (FDA, OSHA)
• Lack of sufficient technical understanding of

AM and resource capacity

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CASE STUDY #2: BIOPHARMA CONTRACT DEVELOPMENT & MANUFACTURER (2 OF 2)

Actions

• Reductions in manufacturing cost by $50M and net

CAPEX spend of $10M

• Facilitated nearly 50 client and key supplier staff
• Conducted facility walkthroughs and supply chain

data analysis across 10 facilities in 12 weeks

• Develop product charters and time-phased

implementation plans

Results

• Increased capacity by 21%, profitability by 10%,

and OTD to 85%

• 300 assemblies/parts and tooling to decrease

manufacturing costs and lead times

• Develop product charters and time-phased

implementation plans

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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