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Fortech solutions business_cases_evaluation_additive_manufacturing_en_20180714

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Short training course as introduction to business case evaluation for the trending technology of additive manufacturing (3D printing) of metal parts. Explanation of main cost drivers, influences and approach of evaluation. Explanation of the right reporting and the use of AM Cost application.
Addresses: product manger, buyers, engineers and mangers in manufacturing industries.

Published in: Technology
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Fortech solutions business_cases_evaluation_additive_manufacturing_en_20180714

  1. 1. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION Business case assessment for additive manufacturing of metal parts FORTECH Solutions GmbH WORKSHOP (SHORTVERSION) (Author: Dr. Andreas Rennet) JULI 2018
  2. 2. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 2 Workshop structure Introduction Factors Cost Levers Costs CAPEX (& OPEX) Life cycle costs The right reporting Examples SummaryFunctional costs 1 2 3 4 5 6 7 8 9 10
  3. 3. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 3 › German joint venture of the Fortech SRL and Cardo Holding AG › Access to > 650 developer at Fortech › Bundling of technical & software expertise in the areas of: › Digitisation › Industry 4.0 › Costing & Procurement › Manufacturing › Production › E-Mobility › Artificial Intelligence (AI)
  4. 4. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 4 Workshop structure Introduction Factors Cost Levers Costs CAPEX (& OPEX) Life cycle costs The right reporting Examples Functional costs Summary
  5. 5. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 5 Introduction › The additive manufacturing of metallic components is beyond the stage of the hype. However, the market is still in a rapid growth phase. In many areas, the use of technology will lead to major changes. In any application business cases will have to be used for the decision whether the AM technology make sense or not. › Especially in applications where the material and manufacturing cost are the leading cost factors, the justification for additive manufacturing is often complex and demanding. › The evaluation of whether a component can be produced additive or not must in any case go beyond the usual ways of looking at the cost analysis.The magic word here is the life-time cost analysis* and thus the extended business case consideration. › The purpose of this workshop document is to describe the methodology of the business case evaluation for additive components in the basic concepts and to provide participants with some targeted approaches for direct implementation. * Also as a life cycle Cost = LCC known; Cf. EU 2014/024 and DIN 60300-3-3)
  6. 6. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 6 Workshop structure Introduction Factors Cost Levers Costs CAPEX (& OPEX) Life cycle costs The right reporting Examples Functional costs Summary
  7. 7. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 7 Challenges of additive manufacturing › Additive manufacturing is not comparable to classical methods of manufacturing processes.This applies not only to the material properties and process chains for production, but also to the costs. › In principle, process times and materials (powder) will remain major cost drivers even with further scaling due to industrialisation. In fact this cost and be multiples higher then, for example, thos forging or casting. › Despite the significant influence, the optimisation of process design and print preparation will not be able to bring the cost level into the region of traditional series production. › The economic added value of the additive-produced metallic components is regularly determined by economic and timing advantages in the process chain from the product definition to the end of use ("CradledTo Grave ").This means that the cost and business case assessment approach must even go beyond the usual life cycle approach that ignores the product definition.
  8. 8. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 8 Influencing factors on the business case Product definition • Functional room of the component • Functional room of the entire relevant system • Weight • Manufacturability • Part positions and connections • Functional surfaces and area • Requirement and specification profile • Material requirements Manufacturing process • Component position • Nesting • Support structures • Hatching Strategy • Surfaces • Machine parameters • Process temperatures • Tool and Device concepts • Postprocessing Product use • Assembly and Mounting process steps • Time of Use • ProductVariance • Spare parts • Supplier availability • Reproducibility • Life time • Traceability
  9. 9. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 9 Cost components Everything counts! • In the past, the business case of traditionally manufactured components was principle made up by the material and costs of the procurement. • For AM part these are generally significantly higher in than in the case of comparable parts e.g. from casting or forging processes. • Only if considering all cost components of the life cycle, the potential advantage of additive manufacturing can be demonstrated compared to conventional production. Schematic representation
  10. 10. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 10 3 Steps to Evaluation • The evaluation of all cost levers for each component in detail is highly complex and is not practical when it comes to business case considerations for the decision additive or conventional production in a early concept stage. • A somewhat reduced approach, which takes into consideration the major cost drivers, allows the business case assessment to be done in 3 steps. The reduced approach leads to delta analysis. Because only the differences to the conventional part are represented.This means that some minor costs are neglected, but for an initial evaluation this is often sufficient.
  11. 11. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 11 3 Steps to Evaluation Step 1 • Evaluation of the component definition and determination of the relevant cost levers for the specific consideration • Cost analysis for the relevant cost levers • Evaluation of total cost of manufacturing • Definition of cost risks and opportunities Step 2 • Assessment of the relevant investments and determination of the scope of consideration • Cost Assessment of investments • Allocated cost calculation for the part based on the project and part life time Step 3 • Definition of the relevant cost drivers along the product usage (life cycle) • Definition of relevant secondary cost effects • Cost evaluation of the relevant cost drivers and allocation to the single part cost
  12. 12. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 12 Workshop structure Introduction Factors Cost Levers Costs CAPEX (& OPEX) Life cycle costs The right reporting Examples Functional costs Summary
  13. 13. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 13 Cost Levers • The cost levers in additive manufacturing have to be evaluated differently depending on the application. • The knowledge of the influenceable cost levers is necessary for the consideration of the business case in order to be able to evaluate the possible optimum. • The following rules can be used to limit the cost analysis and cost optimization effort to the main Cost levers: The Cost Levers must be influencable The Cost Levers must represent at least 5% of the total cost
  14. 14. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 14 Typical Cost levers for AM Product definition • Functional integration • Production-oriented design • Complexity • Weight • Finish • Material Manufacturing • Print parameters • Support structures • Position minima • Component position • Overhangs • Up skin/down skin ratio • Quality assurance • Rework • Follow-up processes Product use • Total number of pieces • Variance • Assembly • Spare parts
  15. 15. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 15 Workshop structure Introduction Factors Cost Levers Costs CAPEX (& OPEX) Life cycle costs The right reporting Examples Functional costs Summary
  16. 16. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 16 Components of production costs (AM) • At the manufacturing cost, all direct and indirect costs directly related to the manufacturing process must be counted to the finished component according to specification. • This means that the cost can include both generative and conventional process steps. For better transparency, it is advisable to separate these cost blocks. • The following simplified formula can be used for cost analysis (yellow deposited: influencable): QK Production costs per component TPp Preparation time (data, process, program) Lk1 Labor cost engineer Pz1 Number of technicians NL Components Total life cycle NB Part Pro Bath (Build) MP Part Mass MS Mass of supporting structures Ng Level of Use powder MK Materials TTr Setup Time Lk2 Labor cost Machine operators Pz2 Number of machine operators Mss1 Machine hour set 3d printer TV Venting/Vacuum time VP Volume parts/Per Batch VS Volume support structures per batch Bro Baud rate Nl Laser Utilization Level TOf Time Optional Surface Smoothing Tb Powder Coating Time HG Overall height SD Thickness TK Cooling time TE Picking time TS Purge time TSr Time distance support structures HT Cost Heat Treatment QM Cost Quality Processes bn cost of mechanical post-processing of cost surface finish 𝑭𝑭𝑲𝑲 = 𝑡𝑡𝑃𝑃𝑃𝑃 ∗ 𝑙𝑙𝑙𝑙1 ∗ 𝑝𝑝𝑝𝑝1 𝑛𝑛𝑙𝑙 + (𝑚𝑚𝑝𝑝+𝑚𝑚𝑠𝑠) ∗ 1 + 𝑛𝑛𝑛𝑛 ∗ 𝑀𝑀𝐾𝐾 + 𝑡𝑡𝑡𝑡𝑡𝑡 ∗ 𝑙𝑙𝑙𝑙2 ∗ 𝑝𝑝𝑝𝑝2 + 𝑀𝑀𝑀𝑀𝑀𝑀1 𝑛𝑛𝐵𝐵 + 𝑡𝑡𝑣𝑣 + 𝑉𝑉𝑝𝑝 + 𝑉𝑉𝑠𝑠 𝑏𝑏𝑏𝑏 ∗ 𝑛𝑛𝑛𝑛 + 𝑡𝑡𝑂𝑂𝑂𝑂 + (𝑡𝑡𝑏𝑏∗ ℎ𝑔𝑔 𝑠𝑠𝑠𝑠 + 𝑡𝑡𝑘𝑘) ∗ 𝑀𝑀𝑀𝑀𝑀𝑀1 𝑛𝑛𝐵𝐵 + 𝑡𝑡𝑒𝑒 ∗ 𝑙𝑙𝑙𝑙2 ∗ 𝑝𝑝𝑝𝑝2 + 𝑀𝑀𝑀𝑀𝑀𝑀1 𝑛𝑛𝐵𝐵 + 𝑡𝑡𝑠𝑠 ∗ 𝑙𝑙𝑙𝑙2 ∗ 𝑝𝑝𝑝𝑝2 𝑛𝑛𝐵𝐵 + 𝑡𝑡𝑠𝑠𝑠𝑠 ∗ 𝑙𝑙𝑙𝑙2 ∗ 𝑝𝑝𝑝𝑝2 + 𝑀𝑀𝑀𝑀𝑀𝑀2 𝑛𝑛𝐵𝐵 + 𝐻𝐻𝐻𝐻 + 𝑄𝑄𝑄𝑄 + 𝑀𝑀𝑀𝑀 + [𝑂𝑂𝑂𝑂] Costing: Standard process cost calculation
  17. 17. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 17 Impact on production costs (AM) The individual influenceable levers of the production costs have some significant effects.The example of a simple geometry represents the relationship qualitatively: Tendency to influence in% for sample geometry/qualitative influence PrintTimeTD) + 65% + 35% + 15% +5 Benchmark Distance Supports (TSr) + 150% -20 + 10% -5 Benchmark Rework Surfaces (TOf) 0 + 20% +70 0 Benchmark Risk of cracks (intrinsic stress) strong increased Source: Cardo AG
  18. 18. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 18 Workshop structure Introduction Factors Cost Levers Costs CAPEX (& OPEX) Life cycle costs The right reporting Examples Functional costs Summary
  19. 19. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 19 Evaluation of functional costs • The evaluation of functional costs is an essential aspect of business case considerations for additive- manufactured components. • Thanks to the almost unrestricted geometry degrees of freedom, functions can be integrated better. Component complexity of systems can be reduced by merging parts and functions or even replacing complete components. • The evaluation of functional costs, however, is a complex and time-consuming process, especially for new components to be developed. This can often not be presented at an early stage of the evaluation. • It is recommended that you use a simplified approach for the business case assessment. Simplified assessment Approach › In the case of substitution of components and systems, the following correlation for the functional costs can be used in a first rough approximation: ∆𝐹𝐹𝐹𝐹= � 𝐹𝐹𝑘𝑘𝑘𝑘𝑘𝑘𝑘 𝑛𝑛𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹 + 𝐹𝐹𝑘𝑘𝑘𝑘𝑘𝑘2 𝑛𝑛𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹2 + ⋯ 𝐹𝐹𝑘𝑘𝑘𝑘𝑘𝑘𝑥𝑥 𝑛𝑛𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝑥𝑥 ∶ 𝑥𝑥 − ( 𝐹𝐹𝑘𝑘𝑘𝑘𝑘𝑘𝑘𝑘𝑘𝑘𝑘𝑘 𝑛𝑛𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹 ) ∆QQ Cost Advantage per function QKBTx Manufacturing Cost Component X NFktBTx Number of functions in part X QCame Production costs on the component NFktAM Number of functions in the part
  20. 20. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 20 Workshop structure Introduction Factors Cost Levers Costs CAPEX (& OPEX) Life cycle costs The right reporting Examples Functional costs Summary
  21. 21. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 21 Capex • The reduction of investment costs in the manufacturing and assembly process is one of the main factors for the economy of additive manufacturing of metal parts. • Therefore it is advisable to have as complete a picture of all necessary tools, devices, special machines etc. To look at. • Due to the complexity of the cost calculation of tools, a first approximation can also be used to work with parameterized approaches. Assembly, CommissioningConventional production Use Assembly, Commissioningadditive manufacturing Use Casting Tools Cores Tools for primary shapging Matrices Jigs Measuring gauges Editing tools .... Jigs Mounting fixtures Carriers .... Mounting fixtures for Service Jigs Measuring gauges Editing tools .... Jigs Mounting fixtures Carriers .... Mounting fixtures for Service
  22. 22. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 22 OPEX (relevant development costs) Product definition and development • Product Planning and Conception • Component development • Cost of Changes (engineering changes) • Simulation • Prototype development • Prototyping • Hedge • Industrialisation (process planning) Tool and device development • Tool and fixture construction • Simulation • Production planning • Building • Commissioning • Change loops • Decrease
  23. 23. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 23 CAPEX & OPEX: Impact on marginal costs • The influence of CAPEX and OPEX costs on component costs depends on the number of components over the life cycle. • The marginal costs shifting to higher number of parts especially for safety-relevant components or parts with extensive prototype phases. • Another positive influence on the business case of the AM components are conventional manufactured parts with high geometrical complexity.This leads to disproportionately expensive tools. €0,00 €20.000,00 €40.000,00 €60.000,00 €80.000,00 €100.000,00 €120.000,00 €140.000,00 €160.000,00 10 100 1000 10000 100000 1000000 Einfluss Umlage CAPEX & OPEX 1 (Einfach) 2 (Sicherheitsrelevant) 3 (Komplex) Schematic representation for typical components. Source: FS/Cardo, component calculations 2018
  24. 24. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 24 Workshop structure Introduction Factors Cost Levers Costs CAPEX (& OPEX) Life cycle costs The right reporting Examples Functional costs Summary
  25. 25. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 25 Life cycle Calculation Cost In addition to one-time costs and manufacturing costs, the additional costs along the life of the product are particulary important. However, these are often complex in the derivation and evaluation. For the production of metallic components, the following simplified approach for business case analysis can be applied to the "life cycle Cost"(without residual value consideration): KRef = Reference Cost QGk = Manufacturing costs (GK = Total cost) CGk = Total CAPEX (investments) OGk = Sum OPEX (development, prototypes, etc.) EGk = operating costs from the life cycle NL = Number of components life cycle without spare pa ∆ = only cost and expense difference Between the component and the conventional Part Full Viewing Delta costs Viewing 𝐾𝐾𝑟𝑟𝑟𝑟𝑟𝑟 = 𝐹𝐹𝐺𝐺𝐺𝐺 + 𝐶𝐶𝐺𝐺𝐺𝐺 + 𝑂𝑂𝐺𝐺𝐺𝐺 𝑛𝑛𝐿𝐿 + 𝐸𝐸𝐺𝐺𝐺𝐺 ∆𝐾𝐾𝑟𝑟𝑟𝑟𝑟𝑟 = ∆𝐹𝐹𝐺𝐺𝐺𝐺 + ∆𝐶𝐶𝐺𝐺𝐺𝐺 + ∆𝑂𝑂𝐺𝐺𝐺𝐺 𝑛𝑛𝐿𝐿 + ∆𝐸𝐸𝐺𝐺𝐺𝐺
  26. 26. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 26 Workshop structure Introduction Factors Cost Levers Costs CAPEX (& OPEX) Life cycle costs The right reporting Examples Functional costs Summary
  27. 27. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 27 The right reporting • The cost analysis of components with a focus on production and material costs is generally not sufficient for the business case consideration of additive manufacturing. • Even in the consideration of possible optimization lever, a mere consideration of the production costs is not conclusive enough. • In order to decide on the business case, a combination of different information must be combined in a decision report. Necessary contents of a report › Presentation of all individual costs › Presentation of all cost allocations › Direct comparison to the conventional component via delta cost analysis › Cost driver representation › Presentation of opportunities and risks › Decision Panel
  28. 28. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 28 Example of a report
  29. 29. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 29 Workshop structure Introduction Factors Cost Levers Costs CAPEX (& OPEX) Life cycle costs The right reporting Examples Functional costs Summary
  30. 30. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 30 implementation example Component: Oxygen burner Support Base: External Building Components/job: 2* Construction Time/job: 66h* Machine: EOS M290 Material Inconel In 718 Post process steps Support removal Shot Blasting for Cleaning * Number for workshop example onlyWith the kind support and of EOS GmbH
  31. 31. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 31 Implementation example * Number for workshop example onlyWith the kind support and of EOS GmbH
  32. 32. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 32 Implementation example in AM COST Through a defined evaluation process, the user is guided by different inputs.The necessary data is usually also available at an early stage of the product conception. In doing so, the direct comparison between the costs of the conventional component and those of the additive produced by approximations helps to derive a valid statement. Features: • Evaluation of production costs for 3d printing (e.g. selective laser sintering) • Evaluation of costs for follow-up processes such as removal of support structures, mechanical post-processing • Consideration of CAPEX (project-or component-related investments) • Consideration of OPEX (project-or component-related operational expenditure) • Consideration of relevant life-cycle influences and functional cost changes • Evaluation of delta costs to conventional manufacturing compared to additive manufacturing • Cost driver analysis with assessment of opportunities • Creation of an evaluation report on the suitability of the component for an additive manufacturing. Interest in At cost? Am-cost@fortech-solutions.de
  33. 33. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 33 Workshop structure Introduction Factors Cost Levers Costs CAPEX (& OPEX) Life cycle costs The right reporting Examples Functional costs Summary
  34. 34. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION 34 Summary • The valuation of the business case for additive manufactured metallic parts and components depends on much more parameters than the cost analysis for conventional material and manufacturing usually covers. • A buy-in or technology decision must therefore be made on the basis of life-cycle costs and not only on the basis of production and material costs • The exact evaluation of all possible influencing parameters and costs is in the early concept phase or development stage of a component or a assembly is challenging. • In order to be able to carry out a valid and decision-making business case evaluation for additive- manufactured components, the presented mix is recommended for qualitative and quantitative analysis. • In a delta cost evaluation, minor or non-influencing cost of conventional and additive components can be taken out of the consideration, without reducing the quality of the decision base.
  35. 35. ©2018byFortechSolutionsGmbH,Munich,Germanywww.fortechsolutions.de,Author:Dr.AndreasRennet WE ENABLE INNOVATION Fortech Solutions GmbH Konrad-Zuse-Platz 8 81829 Munich, Germany Www.fortechsolutions.de Contact@fortechsolutions.de+ 49 89 1250 102-75 Interest in At cost? Am-cost@fortechsolutions.de

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