The Impact Of 3D Printing On The Automotive Industry: An Essay.

Article Summaries

Describe about the Technology Audit & Technology Assessment.

Audi is one of the leading car manufacturers that produce high quality premium cars with modern designs. The company is currently operating in over 100 markets of the world. It has several manufacturing units in Germany, Belgium, Hungary, and China. 3D printing is an additive manufacturing technology in which objects are produced using layer by layer addition of small nano sized particles. This report would explore the concept of 3D printing, its applications, its limitations and industry scenario. Audi is one organization that has adopted 3D printing for printing its parts and thus, in the reflective section of this report, the case of Audi would be explored and a framework for technology adoption of 3D printing would be created for Audi as an automotive brand. This framework would be based on the understanding of the concept learned about technology management in the course curriculum.

Additive Manufacturing: The effects of 3D printing

The paper explored global opportunities for 3D printing considering consumers, SMEs, and large corporations. The technology is already used in crafts and animation by consumers, medical services, auto parts and toys manufacturing by SMEs and industrial R&D by large corporations. Companies have also started to use it for apparels, food, bicycles, life science experiments, and power tools. Some applications are still being researched such as organ replacement and consumer electronics (KANDELA, 2015).

In additive manufacturing very small components of the size of 100 nanometers are made and deposited to create an object. Initially, the technology was used only for mockups and prototyping but now its use is spread to production of finished parts as well as products. 3D printing can produce light weight materials at lower costs. Scientists today are exploring if it can be used to produce self-organizing materials that can change shape based on the changes in the environment.

3D printing is growing fast today and is expected to reach $5 billion sales by next year, 2017. Major industries using it include automotive, industrial, aerospace, and healthcare.

3D printing has many benefits as well as challenges that were described in detail in this paper such as the benefits of inexpensive single item prototyping, reduced lead times, and rapid innovation, and challenges of dependence on printer speed, limitations on materials, and high cost of production in large volumes.

3D printing adoption framework was presented in the paper that identified steps including establishing initiative, investing in the technology, creating a network, changing organization with respect to skills and abilities, and implementation of innovation (Halmes & Pierreu, 2014).

Additive Manufacturing: The effects of 3D printing

Factors like continues improvements in manufacturing processes, expiring patents, and newer processes of manufacturing such as 3D printing have created several opportunities for automotive organizations and newer consumer segments are emerging as a result. With the use of 3D printing, manufacturing parts and tools can be produced at lower costs. 3D printing has got much media attention and questions have been raised on its potential to replace traditional manufacturing processes. This report explored various companies’ cases to examine how 3D printing technologies like those provided by Stratsys and 3D systems are being used in automotive sectors (IHS, 2015).

37% of German companies have already adopted 3D printing technology for improving their supply chains while 12% are planning to adopt. Traditional machines and materials are being replaced by that 3D printed.  This has helped companies in two ways - produce lightweight or complex components that improve the quality of the product and allowing customization even in low volume production. Further, 3D printing makes a flexible and low cost production process for spare parts that can help company’s turnaround their supply chains.

However, there are still some barriers to its adoption such as high level of initial investment and technical limitations on size, color and material printing. Yet, because of its sustainability potential and cost effectiveness, companies have started to adopt it in large numbers.

Operational models of companies using 3D printing as the manufacturing process can involve an acquisition of a facility, joint establishment, or use of existing 3D printing network of suppliers. The choice of operational model is dependent on value add by process, necessity for in-house production, cost of implementation, and so on.

3D printing can help a company at three levels: Supply chain operations that can be made more cost effective and efficient with reduction of transportation and inventories; product designing through new structures and use of customization; and company through addition of business models and value chain re-positioning (EY, 2016).

The paper talks about some benefits of 3D printing such as reduced need of fixed assets, low cost production even in low volumes, and ability to easily produce complex shapes in parts. It also highlighted major applications of 3D printing such as consumer products, medical products, commercial hardware, and toys. 

The paper also discussed intellectual property implications of replacing traditional parts with 3D printed parts. AS per European Design Directive while producing a new part with 3D printing, it should have new design and must also have separate individual characteristics that do not match with existing produces manufactured using patented traditional manufacturing processes.

The Impact of 3D Printing on the Automotive Sector

The paper presented some case studies on different markets included automotive, domestic appliances, and customized goods.  Automotive market case study covered 3DP parts, automotive aftermarket, additive manufacturing drivers, AM limitations, and data considerations. Domestic appliances use cases were described.

It was found that Am presented many short-term opportunities in automotive production but parts produced cannot fully replicate traditionally produced parts. In domestic appliances production, 3D printing is still majorly used for DIY products and its use for production of spare parts is still in the nascent stage of adoption.

The paper also highlighted the fact that consumers have started to act as designers with the use of 3D printing solutions like MakiLab, UCODO, and N-E-R-V-O-U-S system making way for many online production tools (Reeves & Mendis, 2015).

3D printing has changed the way companies design, develop, manufacture and distribute products. Additive manufacturing is majorly used by Original Equipment Manufacturers for rapid prototyping. OEMs in automotive sector are few due to high entry barriers but competition in suppliers is high as there are over $1.5 trillion suppliers of parts and accessories of automotive sector.

Additive Manufacturing can become a game-changer when considering the competition between the manufacturers as it provide a source of innovation, can reduce overall costs of production, reduce lead times, and reduce complexity of supply chain. When considering the value provided by AM, there can be performance trade-offs like capital versus scale and capital versus scope. If a company uses less of capital and is still able to achieve the scale, it can affect the configuration of supply chain and if it can achieve a greater scope with it, the impact would be on product design (Wahlström & Sahlström, 2016).

While using AM, companies can take any of the four tactical paths from improving value delivery, transform supply chains, achieve innovation with performance improvement, or alter both supply chain and products. Most automotive companies are currently on the path 1 or stasis which involves only improvements in value delivery and no radical changes are made. In this path of adoption of 3D printing, companies use it for product design improvements, rapid prototyping, customizing tools, and reducing tooling costs. In future, companies are likely to adopt path III and IV with more complex designing, production cost reduction, improvement in market responsiveness, and creation of smaller supply chains.

There are some key drivers to adoption of AM such as greater choice in material and their properties, reduced preprocessing, and improved quality of AM manufactured product. There are also certain challenges such as low volume production, limitations on production of large parts, shortage of talent, and concerns of intellectual property rights. Despite these challenges, AM has the potential to support automotive companies through improvement in performance and through innovation (Giffi, Gangula, & Illinda, 2014).

How will 3D printing make your company the strongest link in the value chain?

A technology adoption and management framework may be used for describing the adopting of 3D printing technology by Audi manufacturing organization. Before going into the technology adoption by any organization, a world view may be used for understanding its current operations and their connection with the external environment and the industry.

 The World view creates boundaries of knowledge in any area of technology including micro environment which explores the organization, its customers and competitors, and macro environment explores industry trends, technology trends, and political trends. Using the model, Audi as a company and automotive industry can be exploring with respect to 3D printing as a potential technology to adopt for manufacturing.

Automotive industry is moving towards the use of 3D printing for making small parts that can be used while assembling cars in production line. However, critical parts that go inside the car are not being produced using 3D printing. The automotive industry uses 3D printing mainly for two purposes - one, is to reduce cost of production and second, to bring innovation through flexibilities in part designs.

For managing technology, a framework which links technological resources with the objectives of the company can be used in the following ways:

Objectives of the company: The Company aims to introduce new models to the market and thus, is spending on building new production capacities and producing innovative automobiles. 3D printing adoption supports the objective as it would help company produce more innovative vehicles and produce them faster with 3D printed parts such that time to market is less and the company is able to achieve its strategic goal of introducing new vehicles and increasing its sales.

Environment: The business environment of the company is affected by the fluctuations in currency and variations in the economic environment which can affect operations of the organization. In such a situation, if the cost f production can be reduced such that the margins of the company increase, it would be able to sustain in such fluctuations and still get decent profits.  When using 3D printing is used, the cost of production can be reduced drastically which would help Audi company to sustain in the highly dynamic business environment (Audi, 2004).

Technology adoption can be seen from technological and commercial perspectives which would the lenses used for exploring strategy, innovation capability and operational decisions of the organization. How each of these factors would be managed in the management of 3D printing technology by Audi is discussed below:

The Current Status and Impact of 3D Printing - An Analysis of Six Case Studies

Strategy: The Company aims to launch new vehicles which would bring more business value as the company would make more sales in the market. 3D printing would help company produce external parts that are different and innovative designs which would bring an opportunity for the company to come up with more variants and thus, make more products to sell in the market.

Innovation: 3D printing can bring in innovation as it provides flexibility in production of parts with varied and complex designs. Moreover, the parts produced by 3D printing can be tailored to individual models of vehicles making the innovation work differently for different models. From the perspective commercial impact of such innovation, it can be observed that innovation would help company sell to wider segments and thus, make more business. Moreover, innovative designs can be priced higher from base models which would further increase the profit margins for the organization.

Operations: The Company had already purchased its own 3D printing facility which it is using for the production of some parts of the automobile and in future the same can be used for production of more and more parts. This can be a huge cost at the time of acquisition of the technology but once that is done, it would save on the operational and production costs later on.

Conclusions

This report was prepared to understand how technology adoption works. A case of Audi was taken and the technology explored was 3D printing. The paper took 5 research reports that were explored to understand 3D printing, its applications, its limitations, adoption and more. A framework for adoption of 3D printing as a business model for Audi was presented.

References

Audi. (2004). Our Vision, Mission, Strategic Goals, and Objectives. USA department of Commerce.

(2016). How will 3D printing make your company the strongest link in the value chain? Ernst&Young GmbH.

Giffi, C. A., Gangula, B., & Illinda, P. (2014). 3D opportunity in the automotive industry:Additive manufacturing hits the road. Deloitte University Press.

Halmes, M., & Pierreu, L. (2014). Additive Manufacturing: The effects of 3D printing. Deloitte.

IHS. (2015). The Impact of 3D Printing on the Automotive Sector. IHS Technoology.

KANDELA, A. R. (2015). IMPACT OF DISRUPTIVE TECHNOLOGY IN BUSINESSES. Jamshepur: XLRI.

Reeves, P., & Mendis, D. (2015). The Current Status and Impact of 3D Printing - An Analysis of Six Case Studies. CIPPM.

Wahlström, T., & Sahlström, J. (2016). Additive Manufacturing in Production. Lund University.