Justification Strategies for 3D Printing

Additive Manufacturing has the ability to be a game changer in product development, but how do you justify the purchase of a machine?

3D printing, justification, Additive Manufacturing (AM) is taking the industrial world by storm. While the technology has been around for over 20 years it’s just beginning to make a real impact in a wide range of industries. With the ability to turn a prototype or end-use product around in a matter of hours or slash materials costs, 3D printing is becoming an essential product development technology.

While AM can be a game changer for engineers and product development teams getting one or more 3D printer into your office can seems like a daunting task. That doesn’t need to be the case.  In this article you’ll find the essential elements that will give you an excellent chance of getting an AM machine into your product development scheme.

The Executive Summary –

The Executive Summary is the most imporartant part of your AM Justification proposal. In it you will outline the case for adding 3D printing to your production scheme. Although this section can make or break your case, it needs to be short and to the point.

In no more than 2 or 3 paragraphs you should summarize why you need an AM system, Why AM is the right solution, and the investment versus return rate that your company can expect when buying 3D printer.  As in all business proposals numbers will be key to making your case, emphasize them and let them convince management that your need is a necessity.

Situational Analysis –

With management already intrigued by your Executive Summary its time to provide a real world analysis of how AM will work in your business. Start your Situational Analysis with a statement of why your company will benefit from adding AM to your product design scheme. Wherever possible add concrete details of how the day-to-day of product development can be improved through the use of a 3D Printer.

Once you’ve established the “Why’s” for your case, highlight a few machines that you’re company should look into, making sure you explain exactly why each fits your needs. In addition to the “right systems” that will benefit your company also list a few that don’t and explain why they’re the wrong choice. This will give management a better sense of context and help them understand the technology if they’re not read up in on the latest in AM.

After creating a list of machines, explain any risks you see being involved in investing in AM technology. These risks could be anything from workplace safety to a long drawn-out term return on investment period. Once all of your risks have been stated explain how each will be addressed.

Financial Analysis –

Now that you’ve diagnosed your need for an AM system in your Situational Analysis it’s time to present the financial case for purchasing one or more 3D printers. In this section of your presentation you’ll want to focus on hard numbers at the outset, giving management a complete picture of the expenses associated with a new AM machine. 

To start your financial analysis lay out the basic cost of the system(s) that will fit your needs. After laying out this top-level number include the cost of maintenance, ancillary equipment, training, IT expenses and facilities modification your new systems will require. Given that AM is a long term investment you’ll also want to include any labor cost associated with running your machine and also factor in how much materials will cost over time.

3D printing, justification strategies, industry, business, economics, management,With those numbers in place its time to do some research concerning you company’s labor, design and outsourcing costs. Going back anywhere from 12-36 months you should be able to collect enough data to make a concrete assessment of you company’s product development costs that can be displaced with your new AM machine.

Armed with both the cost of your system and the expenditures it will eliminate you can now make an honest assessment of how long you’re company will have to wait to see a return on its investment (ROI). 

If after running the simple calculations (Cost of System – Expenses Eliminatied) you find that the ROI for your system falls between 2-3 years your case may for adding AM to your production scheme may already be strong enough. However you can reduce that ROI estimate by digging deeper and finding new avenues for expenditure elimination.

By leveraging know values like the time it takes to complete a prototyping run using traditional manufacturing and comparing it the reduced time it will take to make an AM built part, you can calculate even greater saving for your firm. These cost savings can also be subtracted from the total operating cost of your system reducing the ROI of your system(s). 

If you feel that your case for justifying the investment in AM still needs a bit of sweetening use anecdotal evidence to tell management how 3D printing can help your company. Common and well understood stories about speeding up product development through rapid iteration or increased shop floor productivity due to custom built jigs and fixates are usually winners.

Though anecdotal evidence can present a clear and compelling case, remember that management will want to be positive that they’re investing in a sure thing. Your Financial Analysis will be the most crucial part of your presentation. Make it, and not your anecdotal evidence the foundation of your presentation.

Case Summary –

With the hard analysis out of the way it’s time to hit the highlights. In a few short sentences highlight your most rock solid numbers that best make the case for adding AM to your production cycles. In an addition, make a quick statement about how AM will help your team iterate through designs, make better production, or become more competitive. Tie your argument together in a concise package, making sure you finish on a high note.

By following the formula provided above you’ll have a better grasp of how 3D printing fits into your business’ budget and be better equipped to answered the precise questions that will be asked by management. Demonstrating a deep understanding of both the financial and operational benefits of adding AM to your business will give management confidence in your analysis and make them more likely to give your proposal the go ahead.   

Much of this information was gleaned from Todd Grimm and Mark Barfoot’s Presentation “Justification Strategies” presented at the AMUG 2014 Conference, special thanks to them both.