The case for printing spare parts
An acknowledged expert in the field of 3D printing, Claus Emmelmann has more than 25 years of experience in laser material processing. He is currently the director of the Institute for Laser and Plant Systems (iLAS) at Technische Universität Hamburg-Harburg and CEO of LZN Laser Zentrum Nord GmbH. In 2015, he was nominated for the German Future Award for his joint work with Airbus on 3D printing in the civilian aircraft industry.
In November 2015, PwC Strategy& Germany interviewed Professor Emmelmann about his high hopes for how 3D printing will transform the spare parts business, and the challenges that remain.
PwC Strategy& Germany: Do you believe that 3D printing will become a game-changer in the spare parts business? If so, why?
Prof. Emmelmann: Yes, indeed. I believe that 3D printing will become a common way of producing spare parts. Firstly, because 3D printing improves the short-term availability of spare parts. At the same time, small-lot sizes of spare parts can be produced economically with 3D printing, resulting in new approaches to the pricing of spare parts. Finally, it facilitates the overall logistics of the spare parts business. The business case will be especially strong for geometrically complex parts.
PwC Strategy& Germany: What is your estimate for the percentage of spare parts that will be 3D-printed in five years?
Prof. Emmelmann: For 2015, the estimate for the metal printing market is about €1 billion, but the current estimates go up to €100 billion in total for the 3D printing market within 10 years. In the near future, I see this market as mostly driven by the printing of spare parts. Hence, within five years we should see 3D printing gaining 10 percent of the market for spare parts.
PwC Strategy& Germany: Why should companies start looking into 3D printing in the context of spare parts now?
Prof. Emmelmann: Besides the reasons I mentioned above, it’s obvious that companies can earn money with spare parts when they offer new services based on 3D printing. The possibility of maintaining high availability — as much as 99.5 percent — of machines and equipment in industries such as railways by providing spare parts with a short lead time makes a strong business case for 3D printing. This is why it isn’t just the OEMs looking into 3D printing, but their customers too.
PwC Strategy& Germany: Do you see a scenario in which third-party suppliers offer 3D-printed spare parts with short lead times to customers? Are there already examples you can name?
Prof. Emmelmann: Yes, I think it likely that third-party suppliers of spare parts will enter the market using 3D printing. We have clients that are working on such a business model now. The driving forces behind these activities are the rising prices of spare parts and their availability. Even though legal barriers have to be overcome and issues of warranties and the like have to be resolved, in some markets, like China, companies are already getting used to purchasing spare parts from non-OEM suppliers.
PwC Strategy& Germany: What are the top three challenges for 3D-printed spare parts?
Prof. Emmelmann: Quality management, machining productivity, and the business case itself. Since standards still haven’t been established, companies have to show that each individual part, and the printing process itself, is able to provide the required physical properties. And the printing process has to become faster, which would make the business case for many parts.
PwC Strategy& Germany: Intellectual property (IP) and copyright issues also have to be addressed. How do you see this issue affecting the rise of platforms on which companies offer printable blueprints, as well as how third-party manufacturers operate?
Prof. Emmelmann: Companies like Amazon and Google are looking into business models based on platforms for 3D printing design files and blueprints. With respect to copyright and IP, it depends on the age of the part. In many cases, IP rights have already expired. In the case of new parts, we see models where IP is shared between suppliers and OEMs, and within these models, the sharing of blueprints is encouraged. IP is certainly an important topic; however, we will see changes in the market in the context of 3D printing as well.
PwC Strategy& Germany: What are your expectations regarding how 3D printing material costs will develop? Is there a trend to a more open, less OEM-dominated market?
Prof Emmelmann: Yes, indeed. The market for 3D printing materials is already changing. Large players like Alcoa are investing in large-scale plants to produce metal powder for selective laser sintering. There will be an OEM-independent market for 3D printing materials in the near future, with the result that materials prices will decrease.