Justifying a 3D Printer Investment For Rapid Prototyping 1 TODAYS - PowerPoint PPT Presentation

Justifying a 3D Printer Investment For Rapid Prototyping 1

TODAY’S TOPIC The Challenge Making the Case Justification Strategies Expense Calculation Measuring Return 2

OUR SPEAKER TODD GRIMM | president T.A. Grimm & Associates, additive manufacturing consulting and communications 3

Justifying a 3D Printer Investment for Rapid Prototyping Todd Grimm

Value Obvious | Justification Unclear

The Challenge • Make value real • Benefits undermined • Outcome: justify on weakest advantage

Example: Medical Device • Primary gain: acceleration • 42 days saved • Justifiable gain: part cost reduction • $58K saved

Making the Case • Executive Summary • Situational Analysis • Financial Justification

Justification Strategies • Tiered Approach • Substitution • Augmentation • Extension • Target • Cost reduction • Current problems • Leverage • Shared budgets

Financial Justification • Value delivered • Investment required • Performance metrics expected

Value: Substitution • As alternative to: • In-house/outsourced • Additive, subtractive, formative • Collect historical data • Project near-term demand • Suggestion: buckets

Value: Substitution • Calculate cost • Outsourced • Tally invoices • Consider labor • In-house • Tally internal cross charges • Estimate with guidance • Enter results

Value: Substitution • Calculate cost Year 0 Year 1 Year 2 • Outsourced Capital Equipment • Tally invoices Operating • Consider labor Expense Total • In-house Investment • Tally internal cross charges Ongoing • Estimate with guidance Expense • Enter results $75,000 $75,000 Return $75,000 $75,000 Total Cumulative $75,000 $150,000 Total

Value: Augmentation • Value of doing more • Examples: • Reduce rework • Accelerate product development • Reduce manufacturing cost

Example: Wood Group Pressure Control • Primary gain: increased sales • More sales communication models • Replace prints • Alternative to aluminum

Value: Extension • Value of doing something new • Examples: • Different stages • Different product types • Different applications

Example: Instrumentation Laboratory • Reengineering for manufacturing • Lower production cost • $600K/year • $7.2M/product life • No rework • $50K on project

Expense Calculation: Initial • All cost to acquire • All cost to become operational • From CAD to finished prototype

Expense Calculation: Ongoing • Estimate build cost • Estimate run time • Estimate labor • Estimate maintenance & repair

Expense Calculation: Ongoing • Estimate build cost Year 0 Year 1 Year 2 • Estimate run time Capital <$50,000> Equipment • Estimate labor Operating <$5,000> Expense • Estimate maintenance & repair Total <$55,000> Investment Ongoing <$34,000> <$34,000> Expense $75,000 $75,000 Return <$55,000> $41,000 $41,000 Total Cumulative <$55,000> <$14,000> $27,000 Total

Year 0 Year 1 Year 2 Return Calculation Capital <$50,000> Equipment Operating <$5,000> Expense • Get guidance Total <$55,000> Investment • Run the numbers Ongoing • Revise to meet hurdle rates <$34,000> <$34,000> Expense $75,000 $75,000 Return Total <$55,000> $41,000 $41,000 Cumulative <$55,000> <$14,000> $27,000 Total

Time is Money Strategy 1: Past consequences Strategy 2: $/day Strategy 3: Bonus benefit

Tiered approach Solve current problems Wrap Up Make it your own Make it real Todd Grimm | Todd.Grimm@TAGrimm.com

Questions? 24

Keep the conversation going… http://www.stratasys.com/justifycost 25

Justifying a 3D Printer Investment For Rapid Prototyping 26