Determining the Tipping Point for the Effective Use of Additive Manufacturing Design & Manufacturing Conference October 7, 2015 Senvol LLC | info@senvol.com AM Capabilities Jet engine fuel nozzle Titanium Custom hearing aid SLA Plastic Senvol LLC | info@senvol.com Customized corn snouts FDM Plastic Rocket injector Nickel-Chromium Alloy Impeller Stainless Steel (Bronze Infiltrated) Integrated electronics 2 Primary Consideration CAN ≠ SHOULD Senvol LLC | info@senvol.com 3 Primary Consideration CAN ≠ SHOULD Senvol LLC | info@senvol.com 4 Primary Consideration $ Senvol LLC | info@senvol.com 5 About Senvol® Senvol LLC | info@senvol.com 6 Supply Chain Scenarios Senvol LLC | info@senvol.com 7 Supply Chain Scenarios Scenario Expensive to Manufacture Long Lead Times High Inventory Costs Sole-Sourced from Suppliers Remote Locations High Import / Export Costs Improved Functionality Senvol LLC | info@senvol.com 8 Senvol Algorithm Status Quo Total Cost Senvol LLC | info@senvol.com VS. Total AM Cost 9 Senvol Algorithm Design • Time and cost of designing and redesigning • Speed to end user testing Manufacturing Supply Chain Spare Parts & Obsolescence • Time and cost to manufacture (e.g. tooling, labor, materials, machine cost, lead time, number of machine hours, minimum order quantity etc.) • Decision to manufacture in-house or outsource • Cost of qualification testing or certification • Time and cost of transportation and logistics • Time and cost associated with import/export (e.g. taxes, duties, tariffs, quotas) • Inventory cost, warehousing cost and cost of capital • Opportunity cost if part is unable to be supplied on time • Time and cost to provide spare parts • Cost of part obsolescence and unavailability as equipment life is extended • Sole-sourcing risk and “lifetime” buy situations Senvol LLC | info@senvol.com 10 Overview 1. Cost-effective use case – GE 2. Non cost-effective use case – Johnson Controls, Inc Senvol LLC | info@senvol.com 11 Case Study 1 Overview: •GE Measurement & Controls Division •5cm x 5cm x 9cm •Aluminum alloy •Custom variations •Low (but highly variable) volume Senvol LLC | info@senvol.com 12 Case Study 1 Potential Benefits of AM: •Reduction in manufacturing cost •Elimination of component assembly Senvol LLC | info@senvol.com 13 Case Study 1 Scenario Expensive to Manufacture Long Lead Times High Inventory Costs Sole-Sourced from Suppliers Remote Locations High Import / Export Costs Improved Functionality Senvol LLC | info@senvol.com 14 Scenarios for Analysis 0 Continue the status quo (Make part via machining only) Set to $0 1 Make part via AM metal only + $99,051 2 Make part via AM polymer only - $100,534 Senvol LLC | info@senvol.com 15 Cumulative total cost over 10 years Total Cost Comparison (Monte Carlo) AM Polymer Machining AM Metal Note: Results of 100,000 Monte Carlo trial simulations Senvol LLC | info@senvol.com 16 Analysis Structure: Inputs & Outputs Inputs Cost: e.g. part cost, shipping, assembly Cost Ordering: e.g. orders/year, units/order Senvol LLC | info@senvol.com Outputs Cumulative total cost of each scenario (over 10 years) 17 Analysis Structure: Inputs & Outputs Inputs Cost: e.g. part cost, shipping, assembly Cost Ordering: e.g. orders/year, units/order Senvol LLC | info@senvol.com Outputs Cumulative total cost of each scenario (over 10 years) 18 AM Metal Cost Estimated AM Metal Cost/Unit Simulated AM Metal Cost/Unit $1,600 $1,500 Y = 4.3x2-146.4x+1642 $1,500 $1,366 $1,300 $1,200 $1,242 $1,100 $1,125 $1,000 $1,018 $900 $918 $800 $828 Cost/unit $700 $746 $673 $600 $608 $552 $504 $466 $435 $414$400 $500 $400 $300 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 # units ordered Senvol LLC | info@senvol.com Cost/unit $1,400 # units ordered 19 Machining vs. AM Metal Cost # Units/Order # batches 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1 13 1 14 1 15 1 16 1 17 2 18 2 19 2 20 2 Senvol LLC | info@senvol.com AM Metal Cost/Unit $ 1,500 $ 1,366 $ 1,242 $ 1,125 $ 1,018 $ 918 $ 828 $ 746 $ 673 $ 608 $ 552 $ 504 $ 466 $ 435 $ 414 $ 400 $ 465 $ 508 $ 533 $ 545 AM Metal Cost/Order (incl. Traditional shipping) Cost/Unit (incl. Traditional Assembly) Cost/Order (incl. A $ 1,700 $ 350 $ 500 $ 2,933 $ 350 $ 850 $ 3,925 $ 350 $ 1,200 $ 4,701 $ 350 $ 1,550 $ 5,288 $ 350 $ 1,900 $ 5,710 $ 350 $ 2,250 $ 5,995 $ 350 $ 2,600 $ 6,168 $ 350 $ 2,950 $ 6,254 $ 350 $ 3,300 $ 6,280 $ 350 $ 3,650 $ 6,271 $ 350 $ 4,000 $ 6,253 $ 350 $ 4,350 $ 6,252 $ 350 $ 4,700 $ 6,293 $ 350 $ 5,050 $ 6,403 $ 350 $ 5,400 $ 6,606 $ 350 $ 5,750 $ 8,106 $ 350 $ 6,100 $ 9,339 $ 350 $ 6,450 $ 10,331 $ 350 $ 6,800 $ 11,107 $ 350 $ 7,150 20 AM Polymer Cost Estimated AM Polymer Cost/Unit $750 Simulated AM Polymer Cost/Unit Y = 2.14x2-73.05x+821 $750 $683 $650 $621 $550 $563 $509 $450 $460 $415 $374 $337 $305 $276 $253 $233 $218 $207$200 $250 $150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 # units ordered Senvol LLC | info@senvol.com Cost/unit Cost/unit $350 # units ordered 21 Machining vs. AM Polymer Cost # Units/Order # batches 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1 13 1 14 1 15 1 16 1 17 2 18 2 19 2 20 2 Senvol LLC | info@senvol.com AM Polymer Cost/Unit $ 750 $ 683 $ 621 $ 563 $ 509 $ 460 $ 415 $ 374 $ 337 $ 305 $ 276 $ 253 $ 233 $ 218 $ 207 $ 200 $ 232 $ 254 $ 267 $ 273 AM Polymer Cost/Order (incl. Traditional shipping) Cost/Unit (incl. Traditional Assembly) Cost/Order (incl. As $ 950 $ 350 $ 500 $ 1,567 $ 350 $ 850 $ 2,063 $ 350 $ 1,200 $ 2,452 $ 350 $ 1,550 $ 2,746 $ 350 $ 1,900 $ 2,958 $ 350 $ 2,250 $ 3,102 $ 350 $ 2,600 $ 3,188 $ 350 $ 2,950 $ 3,232 $ 350 $ 3,300 $ 3,245 $ 350 $ 3,650 $ 3,240 $ 350 $ 4,000 $ 3,231 $ 350 $ 4,350 $ 3,229 $ 350 $ 4,700 $ 3,248 $ 350 $ 5,050 $ 3,301 $ 350 $ 5,400 $ 3,401 $ 350 $ 5,750 $ 4,151 $ 350 $ 6,100 $ 4,768 $ 350 $ 6,450 $ 5,264 $ 350 $ 6,800 $ 5,653 $ 350 $ 7,150 22 Analysis Structure: Inputs & Outputs Inputs Cost: e.g. part cost, shipping, assembly Cost Ordering: e.g. orders/year, units/order Senvol LLC | info@senvol.com Outputs Cumulative total cost of each scenario (over 10 years) 23 Total # Units Ordered/year Stochastic Demand Forecasting Year Senvol LLC | info@senvol.com 24 Analysis Structure: Inputs & Outputs Inputs Cost: e.g. part cost, shipping, assembly Cost Ordering: e.g. orders/year, units/order Senvol LLC | info@senvol.com Outputs Cumulative total cost of each scenario (over 10 years) 25 Total Cumulative Cost Comparison AM Metal: +$99,051 on average Traditional: $0 AM Polymer: -$100,534 on average AM Polymer Traditional AM Metal AM Polymer Traditional AM Metal Senvol LLC | info@senvol.com 26 Cost Sensitivity Analysis AM Polymer Cumulative Total Cost Senvol LLC | info@senvol.com 27 Case Study 1 Summary Impact: •AM saves GE $100,000 over 10 years •Focus on most impactful inputs •In-house v. outsource Senvol LLC | info@senvol.com 28 Case Study 1 Scenario Expensive to Manufacture Long Lead Times High Inventory Costs Sole-Sourced from Suppliers Remote Locations High Import / Export Costs Improved Functionality Senvol LLC | info@senvol.com 29 Case Study 2 Scenario Expensive to Manufacture Long Lead Times High Inventory Costs Sole-Sourced from Suppliers Remote Locations High Import / Export Costs Improved Functionality Senvol LLC | info@senvol.com 30 Case Study 2 Overview: •Johnson Controls, Inc. Automotive Division •8.2 cu. in. •Injected molded (polypropylene) •~8,500 units / year Senvol LLC | info@senvol.com 31 Case Study 2 Goal: •Determine which inputs have the greatest impact on the cost of AM •Determine which variables will need to improve – and by what magnitude – in order for AM to become cost-effective for this type of part Senvol LLC | info@senvol.com 32 Scenarios for Analysis 0 Continue the status quo (Make part via injection molding) $2.64 1 AM SLS Polymer (sPro 230) $39.42 2 AM SLS Polymer (ProX 500) $83.38 3 AM SLS Polymer (Service Bureau) $148.35 Senvol LLC | info@senvol.com 33 Results and Cost Breakdown $160 $140 Cost per Unit $120 $100 Injection Molding $ 1.99 $ 0.36 $ 0.14 $ 0.15 Cost Component Unit Purchase Price New Tooling Tooling Maintenance Excess Operational Cost Material Cost AM Annual Services Cost Redesign Cost AM Machine Cost Qualification Cost Labor Cost SB Unit Cost SB Shipping cost Total Cost per Unit $ sPro™ 230 AM Service ProX™ 500 Bureau (SB) $ $ $ $ $ $ $ $ $ $ $ $ 2.64 $ 26.65 1.69 0.01 9.42 1.50 0.15 39.42 $ 26.65 12.68 0.01 $ 29.90 11.25 2.89 $ $ 83.38 $ SB Shipping cost 0.01 SB Unit Cost Labor Cost 147.50 0.84 148.35 Qualification Cost AM Machine Cost Redesign Cost $80 AM Annual Services Cost $60 Material Cost $40 Excess Operational Cost Tooling Maintenance $20 New Tooling $Injection Molding Senvol LLC | info@senvol.com sPro™ 230 ProX™ 500 AM Service Bureau (SB) Unit Purchase Price © Senvol LLC 34 Variable Analysis of sPro 230 Per Unit Cost Status Quo Cost Per Unit: $2.64 sPro 230 Cost Per Unit: $39.42 Variable Original Value Material Price ($/cu inch) $2.50 Bezel part volume (cu inch) 8.2 AM Machine Cost $780,000.00 # Parts/Batch 60 Non-usable Scrap Rate 30% # hours to print full bed 20 # hours to cure full bed print 20 AM Machine Life (years) 7 AM Annual Services Cost $20,000.00 Qualification cost/batch 90 Machine Downtime 10% Labor Rate ($/hour) $17.50 # labor hours/week 2 Redesign cost $4,000.00 10% $ 36.76 $ 36.76 $ 38.48 $ 38.26 $ 38.81 $ 38.86 $ 38.86 $ 38.56 $ 39.25 $ 39.27 $ 39.30 $ 39.40 $ 39.40 $ 39.42 20% $ 34.09 $ 34.09 $ 37.54 $ 37.29 $ 38.19 $ 38.29 $ 38.29 $ 37.85 $ 39.08 $ 39.12 $ 39.18 $ 39.39 $ 39.39 $ 39.42 30% $ 31.43 $ 31.43 $ 36.59 $ 36.47 $ 37.58 $ 37.73 $ 37.73 $ 37.25 $ 38.91 $ 38.97 $ 39.06 $ 39.37 $ 39.37 $ 39.42 Variable Improvement Level 40% 50% 60% $ 28.76 $ 26.10 $ 23.43 $ 28.76 $ 26.10 $ 23.43 $ 35.65 $ 34.71 $ 33.77 $ 35.77 $ 35.16 $ 34.63 $ 36.96 $ 36.35 $ 35.73 $ 37.17 $ 36.60 $ 36.04 $ 37.17 $ 36.60 $ 36.04 $ 36.73 $ 36.28 $ 35.89 $ 38.74 $ 38.57 $ 38.41 $ 38.82 $ 38.67 $ 38.52 $ 38.94 $ 38.83 $ 38.72 $ 39.36 $ 39.34 $ 39.33 $ 39.36 $ 39.34 $ 39.33 $ 39.42 $ 39.42 $ 39.42 70% $ 20.77 $ 20.77 $ 32.82 $ 34.16 $ 35.12 $ 35.48 $ 35.48 $ 35.54 $ 38.24 $ 38.37 $ 38.61 $ 39.31 $ 39.31 $ 39.42 80% $ 18.10 $ 18.10 $ 31.88 $ 33.74 $ 34.50 $ 34.91 $ 34.91 $ 35.23 $ 38.07 $ 38.22 $ 38.50 $ 39.30 $ 39.30 $ 39.42 90% $ 15.44 $ 15.44 $ 30.94 $ 33.37 $ 33.89 $ 34.35 $ 34.35 $ 34.96 $ 37.90 $ 38.07 $ 38.40 $ 39.28 $ 39.28 $ 39.42 *All costs assume infinite demand (i.e. the AM machine is never intentionally idle). Senvol LLC | info@senvol.com 35 Can AM become cost-effective? Status Quo Cost Per Unit: $2.64 “Improved” AM Cost Per Unit: $2.63 AM Machine Cost AM Machine Life (years) AM Annual Svcs Cost Material Price ($/cu inch) Non-usable Scrap Rate # Parts/Batch Bezel part volume (cu inch) Labor Rate ($/hour) # labor hours/week # hours to print full bed # hours to cure full bed print Qualification cost/batch (tensile bar test) Redesign cost Machine Downtime (broken, maintenance) Senvol LLC | info@senvol.com Original Value Improvement $780,000 30% 7 50% $20,000 90% $2.50 90% 30% 65% 60 300% 8.2 10% $17.50 0% 2 50% 20 50% 20 50% $90.00 90% $4,000.00 0% 10% 50% New Value $546,000 11 $2,000 $0.25 11% 240 7.38 $17.50 1 10 10 $9.00 $4,000.00 5% 36 Can AM become cost-effective? Status Quo Cost Per Unit: $2.64 “Improved” AM Cost Per Unit: $2.64 AM Machine Cost AM Machine Life (years) AM Annual Svcs Cost Material Price ($/cu inch) Non-usable Scrap Rate # Parts/Batch Bezel part volume (cu inch) Labor Rate ($/hour) # labor hours/week # hours to print full bed # hours to cure full bed print Qualification cost/batch (tensile bar test) Redesign cost Machine Downtime (broken, maintenance) Senvol LLC | info@senvol.com Original Value Improvement $780,000 50% 7 50% $20,000 50% $2.50 50% 30% 50% 60 50% 8.2 90% $17.50 0% 2 0% 20 50% 20 50% $90.00 90% $4,000.00 10% 10% 10% New Value $390,000 11 $10,000 $1.25 15% 90 0.82 $17.50 2 10 10 $9.00 $3,600.00 9% 37 Case Study 2 Summary Impact: •AM more expensive than injection molding in this case •Track impactful inputs Senvol LLC | info@senvol.com 38 Overall Summary • Given current technology levels, some parts are costeffective to produce via AM • 7 supply chain scenarios • For parts that are not currently cost-effective for AM, no one variable can be singled out as the cause to AM’s high cost • Senvol’s algorithm can construct scenarios to show when a part will become cost-effective for AM • The most impactful AM variables (on total AM cost) are often material cost, part volume and AM machine cost Senvol LLC | info@senvol.com 39 Business Considerations for AM • Identify parts and cost-benefit analysis • Educate executives and employees • Analyze supply chain process • Connect to major industry stakeholders • Strategize for future iterations of AM technology • Run AM Pilot Program Senvol LLC | info@senvol.com 40 Senvol Database Search 450+ AM machines & 550+ materials www.senvol.com/database Senvol LLC | info@senvol.com 41 Contact info@senvol.com @Senvol Senvol LLC | info@senvol.com 42 Appendix I: Additional Slides from Case Study 1 (GE) Senvol LLC | info@senvol.com 43 Analysis Structure: Inputs & Outputs Time Inputs Outputs Days of AM machine usage Cumulative AM Machine Usage (over 10 years) Senvol LLC | info@senvol.com 44 AM Machine Usage # of Days to Print by Batch Size 4.20 Y=-0.0022x2+0.08x+3.29 # days to print 4.00 3.74 3.80 3.79 3.83 3.87 3.90 4.01 3.98 4.00 3.96 3.93 3.69 3.64 3.57 3.60 3.51 3.44 3.40 3.37 3.20 3.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 # Units/Batch Senvol LLC | info@senvol.com 45 Analysis Structure: Inputs & Outputs Time Inputs Outputs Days of AM machine usage Cumulative AM Machine Usage (over 10 years) Senvol LLC | info@senvol.com 46 AM machine usage (# weeks) Simulated AM Machine Usage 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Year # Weeks AM Machine In Use (avg.) 2014 3.7 2015 4.1 2016 4.7 2017 5.2 2018 5.9 2019 6.7 2020 7.6 2021 8.8 2022 9.7 2023 11.3 Year Senvol LLC | info@senvol.com 47 Comparison of Cost Per Unit Cost Per Unit $1,600 $1,400 AM Metal Cost/Unit AM Polymer Cost/Unit Cost/unit $1,200 Traditional Cost/Unit (incl. Assembly) $1,000 $800 $600 $400 $200 $1 16 31 46 61 76 91 106 121 # units per order 136 151 166 181 196 More detail on this area in the next 2 slides Senvol LLC | info@senvol.com 48 Comparison of Cost Per Unit (AM Metal) Cost/unit Inflexion Points (low probability of occurring) 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 # units ordered Senvol LLC | info@senvol.com 49 Comparison of Cost Per Unit (AM Polymer) Cost/unit Inflexion Point 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 # units ordered Senvol LLC | info@senvol.com Very high probability that AM Polymer will continue to be less expensive than Traditional Machining 50 Comparison of Cost Per Order Cost Per Order $90,000 AM Metal Cost/Order Cost/order $80,000 AM Polymer Cost/Order Traditional Cost/Order (incl. Assembly) $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $1 16 31 46 61 76 91 106 121 # units per order 136 151 166 181 196 Inflexion Point for AM Polymer seen on previous slide Senvol LLC | info@senvol.com 51 Stochastic Demand Forecasting Number of orders/year Number of units/order A binomial function to simulate customers’ orders is used; Probability = probability of an order arriving at a point in time; 0 = no order; 1 = 1 order Minimum order amount, mean and standard deviation are used to simulate order size X 2014 2015 Order min 1 1 Order mean 20 22 Order StDev 10 11 Order 1 0 48 2014 2015 0.30 0.32 Order 1 0 1 Order 2 0 1 Order 3 1 0 Order 2 0 18 Order 4 0 0 Order 3 12 0 Order 5 1 1 Order 4 0 0 Etc. … … Order 5 32 35 Etc. … … Probability Senvol LLC | info@senvol.com equals # units ordered per year 52 Appendix II: Additional Slides from Case Study 2 (Johnson Controls, Inc.) Senvol LLC | info@senvol.com 53 What about when new tooling is needed? $100,000.00 Total Cost (AM Service Bureau) $90,000.00 Total Cost (Injection Molding) $80,000.00 Total Cost ($) $70,000.00 $60,000.00 $50,000.00 289 bezels $40,000.00 $30,000.00 $20,000.00 $10,000.00 $0 100 200 300 400 500 600 700 800 900 1000 Number of Bezels Senvol LLC | info@senvol.com 54 Variable Analysis of sPro 230 Per Unit Cost Material Price ($/cu inch) 40 Bezel part volume (cu inch) AM Machine Cost 35 # Parts/Batch Non-usable Scrap Rate -AM Machine Cost Cost/Bezel 30 25 # hours to cure full bed print AM Machine Life (years) AM Annual Services Cost -Material Cost -Bezel Part Volume (i.e. both variables have the same steepness) 20 # hours to print full bed Qualification cost/batch Machine Downtime Labor Rate ($/hour) # labor hours/week 15 0% 10% 20% 30% 40% 50% 60% Percent Improvement 70% 80% 90% Redesign cost *All costs assume infinite demand (i.e. the AM machine is never intentionally idle). Senvol LLC | info@senvol.com 55 Variable Analysis of sPro 230 Per Unit Cost 10% Improvement Original Variable Value Material Price ($/cu inch) $2.50 Bezel part volume (cu inch) 8.2 AM Machine Cost $780,000.00 # Parts/Batch 60 Non-usable Scrap Rate 30% # hours to print full bed 20 # hours to cure full bed print 20 AM Machine Life (years) 7 AM Annual Services Cost $20,000.00 Qualification cost/batch $90.00 Labor Rate $17.50 # labor hours/week 2 Redesign cost $4,000.00 Machine Downtime 10% 50% Improvement 90% Improvement New Cost % Decrease $ decrease New Cost % Decrease $ decrease New Cost % Decrease $ decrease per Bezel in total cost in total cost per Bezel in total cost in total cost per Bezel in total cost in total cost $36.76 6.76% $2.67 $26.10 33.80% $13.33 $15.44 60.84% $23.99 $36.76 6.76% $2.67 $26.10 33.80% $13.33 $15.44 60.84% $23.99 $38.48 2.39% $0.94 $34.71 11.95% $4.71 $30.94 21.51% $8.48 $38.26 2.95% $1.16 $35.16 10.80% $4.26 $33.37 15.35% $6.05 $38.81 1.56% $0.62 $36.35 7.80% $3.08 $33.89 14.04% $5.54 $38.86 1.43% $0.56 $36.60 7.15% $2.82 $34.35 12.87% $5.07 $38.86 1.43% $0.56 $36.60 7.15% $2.82 $34.35 12.87% $5.07 $38.56 2.17% $0.86 $36.28 7.97% $3.14 $34.96 11.32% $4.46 $39.25 0.43% $0.17 $38.57 2.15% $0.85 $37.90 3.86% $1.52 $39.27 0.38% $0.15 $38.67 1.90% $0.75 $38.07 3.42% $1.35 $39.40 0.04% $0.02 $39.34 0.20% $0.08 $39.28 0.35% $0.14 $39.40 0.04% $0.02 $39.34 0.20% $0.08 $39.28 0.35% $0.14 $39.42 0.00% $0.00 $39.42 0.00% $0.00 $39.42 0.01% $0.00 $39.30 0.31% $0.12 $38.83 1.50% $0.59 $38.40 2.60% $1.02 *All costs assume infinite demand (i.e. the AM machine is never intentionally idle). Senvol LLC | info@senvol.com 56