Rapid manufacturing and the global economy

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Rapid manufacturing is more than a novel method of production; rather, it represents a paradigm shift which will impact the very nature of production and consumption. The ability to quickly manufacture limited quantities of highly individualized or geometrically optimized products locally is a revolutionary prospect which challenges the fundamental principles of economies of scale, specialization, mass production, and outsourcing which have largely defined the manufacturing industry since the industrial revolution.

Many have speculated that rapid manufacturing will enable a manufacturing renaissance in high wage economies by reducing labor and assembly costs. Others declare rapid manufacturing to be the next industrial revolution. While such claims are common, there has been no attempt to quantify the potential impact of rapid manufacturing upon the global economy. This study will evaluate rapid manufacturing as a disruptive technology, identify which products will be most likely impacted by the uptake of additive fabrication, and quantify the potential impact widespread adoption of rapid manufacturing may have upon global trade.

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Rapid manufacturing and the global economy

  1. 1. Rapid Manufacturing and the Global Economy Master of Philosophy in Technology Policy 2007/2008 Rapid Manufacturing and the Global Economy Written by: Blake J. Driscoll MPhil in Technology Policy Candidate Judge Business School University of Cambridge With the guidance of: Dr. William O’Neill Institute for Manufacturing Department of Engineering University of Cambridge 1
  2. 2. Rapid Manufacturing and the Global EconomyDeclarationThis Project Report is substantially my own work and conforms to the Judge Schoolguidelines on plagiarism. Where reference has been made to other research this isacknowledged in the text and bibliography. 2
  3. 3. Rapid Manufacturing and the Global EconomyAbstract Rapid manufacturing is more than a novel method of production; rather, itrepresents a paradigm shift which will impact the very nature of production andconsumption. The ability to quickly manufacture limited quantities of highly individualizedor geometrically optimized products locally is a revolutionary prospect which challenges thefundamental principles of economies of scale, specialization, mass production, andoutsourcing which have largely defined the manufacturing industry since the industrialrevolution. Many have speculated that rapid manufacturing will enable a manufacturingrenaissance in high wage economies by reducing labor and assembly costs. Others declarerapid manufacturing to be the next industrial revolution. While such claims are common,there has been no attempt to quantify the potential impact of rapid manufacturing upon theglobal economy. This study will evaluate rapid manufacturing as a disruptive technology,identify which products will be most likely impacted by the uptake of additive fabrication,and quantify the potential impact widespread adoption of rapid manufacturing may haveupon global trade. 3
  4. 4. Rapid Manufacturing and the Global EconomyAcknowledgements…to Malcolm Cook and Jim Dempsey for introducing me to rapid prototyping.…to Bill O’Neill for sharing my initial enthusiasm to undertake a project of this scope.…to Grant Kopec and Satya Dash for their ideas, opinions, and sense of humor. 4
  5. 5. Rapid Manufacturing and the Global EconomyTable of ContentsDECLARATION ................................................................................................................................................. 2ABSTRACT.......................................................................................................................................................... 3ACKNOWLEDGEMENTS................................................................................................................................ 4TABLE OF CONTENTS .................................................................................................................................... 51 RAPID MANUFACTURING AS A DISRUPTIVE TECHNOLOGY .............................................. 6 1.1 EVOLUTION OF RAPID MANUFACTURING ......................................................................................... 6 1.2 EVOLUTION OF TRADITIONAL MANUFACTURING ............................................................................. 6 1.3 RAPID MANUFACTURING AS A DISRUPTIVE TECHNOLOGY .............................................................. 82 POTENTIAL APPLICATIONS OF RAPID MANUFACTURING ................................................ 10 2.1 RECENTLY COMMERCIALIZED APPLICATIONS ................................................................................. 10 2.2 CURRENT AREAS OF RESEARCH ....................................................................................................... 13 2.3 FEASIBILITY OF IMPLEMENTING RAPID MANUFACTURING AT THE FIRM LEVEL ............................ 15 2.4 CHARACTERISTICS OF PROMISING APPLICATIONS .......................................................................... 17 2.5 LIMITATIONS OF CURRENT TECHNOLOGY ....................................................................................... 183 POTENTIAL IMPACT OF RAPID MANUFACTURING ON CURRENT PRODUCTS .......... 19 3.1 METHODOLOGY ................................................................................................................................ 19 3.2 ANALYSIS OF CURRENT PRODUCTS .................................................................................................. 224 THE NEXT INDUSTRIAL REVOLUTION? ...................................................................................... 29 4.1 MANUFACTURING AND THE GLOBAL ECONOMY ............................................................................ 29 4.2 THE PERCEIVED IMPACT OF RAPID MANUFACTURING ................................................................... 30 4.3 THE REAL IMPACT OF RAPID MANUFACTURING ............................................................................. 315 CONCLUSION ........................................................................................................................................ 366 FUTURE WORK ...................................................................................................................................... 38APPENDIX I: PRODUCT ANALYSIS.......................................................................................................... 39APPENDIX II: FEASIBILITY ANALYSIS.................................................................................................... 57APPENDIX III: TRADE STATISTICS BY PRODUCT.............................................................................. 59APPENDIX IV: TRADE STATISTICS BY COUNTRY.............................................................................. 62REFERENCES.................................................................................................................................................... 67 5
  6. 6. Rapid Manufacturing and the Global Economy1 Rapid Manufacturing as a Disruptive Technology The first chapter will introduce the reader to additive fabrication technology,describe the evolution of traditional manufacturing, and evaluate rapid manufacturing as adisruptive technology.1.1 Evolution of Rapid Manufacturing Additive fabrication is a revolutionary manufacturing process first commercialized 1by 3D Systems in 1986. Many forms of additive fabrication exist, includingstereolithography (SLA), selective laser sintering (SLS), fused deposition modelling (FDM),and 3D printing. All additive technologies utilize an additive process of bonding liquid,powder, or other materials layer-by-layer to produce a physical part. While early additive technologies were quite crude in terms of accuracy, limited interms of material selection, and required several pre- and post-processing steps, they wereembraced by designers and engineers who used the technology to produce prototypes andmodels for evaluating form, fit, and function of designs early in the development cycle,greatly reducing design costs and increasing the speed and quality of products brought to 2market. Because of this early application, additive fabrication is often referred to as “rapidprototyping.” Additive fabrication continued to make technological advancements under the guiseof “rapid prototyping” throughout the 1990s and 2000s. With continuous improvements inmaterials, resolution, and build speed, many began to consider additive fabrication as amanufacturing process in its own right. The application of additive techniques for theproduction of end use products, or “rapid manufacturing,” is a potentially revolutionaryconcept which will form the basis of this study.1.2 Evolution of Traditional Manufacturing To understand the potentially disruptive nature of rapid manufacturing, a briefhistory of traditional manufacturing is necessary to identify the fundamental principleswhich have influenced the rise of industry. Despite numerous process improvement andtechnology based improvements, two basic principles have largely defined traditionalmanufacturing: specialization and standardization.1.2.1 Basic Principles Specialization is a natural manifestation of human interaction and represents themost fundamental characteristic of manufacturing. Adam Smith discussed the increase inhuman productivity resulting from specialization and the division of labor by drawing 6
  7. 7. Rapid Manufacturing and the Global Economyexamples from contemporary society. He notes that even within primitive tribes, certainmembers would specialize in the manufacture of tools and weapons to be exchanged withothers who specialized in hunting.3 David Ricardo identified the concept of comparativeadvantage in which entire nations or societies may benefit from specialization and trade. Henotes that natural or artificial advantages unique to geographic regions or societies supportthe production of certain products, the trade of which results in increased wealth.4 Early manufacturing, or “craft production,” was based largely upon specialization.Craft production featured highly skilled workers using flexible tools to design and producecustomized products in low volumes. It originally consisted of local customers, localproduction, and local suppliers—although improvements in transport and internationaltrade would eventually enable the expansion of markets. Because each manufactured itemwas unique, the overall consistency and quality of craft production was highly variable.5 The development of interchangeable parts by Honoré Blanc and Eli Whitney in thelate 1700s represents a significant advancement in production methodology. 6 Thestandardization of parts and processes provided improved quality and consistency, thusenabling larger production volumes at lower cost. Standardization is the fundamental process which enabled a shift from craftproduction to mass production and, along with specialization, largely defines contemporarymanufacture. While today’s global manufacturing system also benefited from numeroustechnology and process improvements, the underlying principles remain specialization andstandardization.1.2.2 Process Improvements Following the development of standardized parts, the next significant advancementin manufacturing occurred in 1908 with Henry Ford’s development of the assembly line.His system of mass production utilized unskilled workers to operate inflexible single-purpose machines and enforced rigid measurement techniques to ensure consistency andfacilitate assembly. The result was highly standardized production which delivered a highvolume of products with significantly reduced costs. By automating the entire assemblyprocess along a moving belt, Ford was able to carefully control the rate of production.7 Alsoin the early 1900s, Fredrick Winslow Taylor introduced the idea of scientific management.Taylor preached the extreme specialization through the division of labor into basic tasks, thesubsequent optimization of which would result in improvements to the overall process.Taylor’s ideas are credited with launching the field of management science.8 7
  8. 8. Rapid Manufacturing and the Global Economy The concept of lean production represents the next significant process improvement.Pioneered by Eiji Toyoda and Taiichi Ohno in the 1950s and 1960s, “lean” encompasses avariety of process improvements including reduction of waste, continuous improvement ofproduction processes (kaizen), just-in-time inventory supply, and build-to-order productionbased on kanban.9 Unlike mass production, lean utilizes multi-skilled workers and semi-flexible machines to produce a limited variety of products in moderate volumes. Thisreduces time wasted changing over to a different product, thus enabling the cost effectivemanufacture of products with short lifecycles while reducing inventory and overheadcosts.10 Despite these improvements over mass production, lean factories still specialize in alimited variety of products with common, standardized characteristics. Agile manufacturing is yet another modern production philosophy which strives toimprove, but not fundamentally change, traditional mass production. Agile manufacturingsystems feature high levels of product and process flexibility to compress product lead timeand improve responsiveness. These goals may be achieved within a traditional massproduction environment through the rapid reconfiguration of manufacturing processes, buttypically result in additional waste. 11 Some manufacturers have attempted to meetconsumer demand through modularization, or the personalized combination ofstandardized components.12 The most extreme form of agile manufacture, “build-to-order,”requires process flexibility, product flexibility, and volume flexibility to effectively meetconsumer demand.13 Agility attempts to combine the flexibility and customization of craftproduction with the reliability and volume of mass production, but is restricted by the needto utilize standardized parts and specialized processes. The application of technology has also historically resulted in the improvement ofmanufacturing processes. Both Smith and Ricardo discussed the numerous benefits ofmachinery, notably the reduction of labor by specialized machines capable of completingrepetitive tasks. The steam engine powered early factories of the industrial revolution,while enterprise resource planning systems power today’s global manufacturing businesses.While technology has greatly improved the efficiency of production, it has not inherentlychanged its fundamental principles.1.3 Rapid Manufacturing as a Disruptive Technology Traditional manufacturing is built upon the principles of standardization and massproduction. Gradual improvements in process, technology, and transportation haveresulted in a truly global supply chain of international sourcing, manufacturing, anddistribution with economies of scale never previously imagined. But rapid manufacturing 8
  9. 9. Rapid Manufacturing and the Global Economyprovides producers and consumers with a different value proposition: responsiveproduction of low-volume, customized products with increasingly competitive unit prices. According to Christensen, attributes which make disruptive technologies lessappealing to mainstream markets are the same attributes which are more appealing toemerging markets.14 In the case of rapid manufacturing, the ability to generate customizedproducts with a flexible machine is counter to the fundamental principles of conventionalmanufacture—standardization and specialization. Rapid manufacturing eliminates the need to produce standardized products andmaintain highly specialized factories. It provides the flexibility to manufacture multipleproducts with a single machine, including complex geometries previously impossible tomanufacture through subtractive means. Additive technology enables the fabrication oftruly personalized products given direct customer input, thus eliminating all forms ofstandardization. Tuck and Hague discuss how rapid manufacturing achieves many goals of both leanand agile philosophies. Rapid manufacturing results in the elimination of waste through thereduction raw materials, work in progress inventory, and finished goods inventory. Furthercost savings are achieved by reducing assembly costs, consolidating the number ofcomponents, reducing set-up and change-over time, and potentially eliminating transportcosts by allowing for manufacture at the site of demand. In addition, additive technologiesallow for the creation of value through customization and the compression of lead timethrough the elimination of supply lines—two key goals of agile manufacturing.15 While leanand agile manufacturing attempt to improve traditional production techniques, rapidmanufacturing achieves the goals of both philosophies using an entirely different—andpotentially disruptive—approach. 9
  10. 10. Rapid Manufacturing and the Global Economy2 Potential Applications of Rapid Manufacturing Potential applications of rapid manufacturing technologies have been widelydocumented in both academic literature and popular press. This chapter will review manyof the recently commercialized applications of additive fabrication and current areas ofresearch, and will also examine literature addressing firm level implementation of additivetechnologies. This review will serve to identify the characteristics of promising applicationsas well as the current limitations of rapid manufacturing technology.2.1 Recently Commercialized Applications The following literature review describes the numerous applications which havebeen commercialized to date.2.1.1 Prosthetic Implants Rapid manufacturing has been widely adopted by the medical industry for a varietyof applications. Janssens and Poukens attribute the early adoption of rapid manufacturingwithin the medical industry to the need for personalized implants, the ability to producecomplex geometries, and the ability of doctors to actively influence the design andmanufacture of components which greatly reduces development time and improves quality.Most importantly, the high-value nature of medical devices justifies the relatively high costof manufacture.16 Doctors are using additive fabrication to produce titanium implants which can becustomized prior to surgery, offer a more accurate fit, and provide better post-operationaesthetic appearance for the patient. Janssens and Poukens have also demonstrated thesuccessful use of electron beam melting to manufacture a titanium cranial implant.2.1.2 Orthodontics Harris and Savalani discuss a variety of applications in the field of orthodontics.They cite research into the use of selective laser melting and selective laser sintering toproduce titanium prosthetics, but note that resolution constraints of today’s technologieslimit the rapid manufacture of dental prosthetics. They also cite more successful applicationof rapid manufacturing technology for the production of orthodontic support structures,such as drill guides, which can be customized for each patient.17 The Invisalign® system is perhaps the most successful commercial application ofrapid manufacturing technology in the field of orthodontic support structures. Firstcommercialized by Align Technologies in 1999, Invisalign® utilizes SLA technology tocreate a series of customized clear plastic implants to be worn over a patient’s teeth.Incremental changes in each successive implant slowly realign and straighten a patient’s 10
  11. 11. Rapid Manufacturing and the Global Economyteeth over the length of treatment, typically lasting about twelve months. Each implant isunique, designed to fit each patient’s dental structure as well as the particular stage oftreatment.182.1.3 Hearing Aids Masters, et al, discussed the use additive techniques for the manufacture of hearingaids, citing particular benefits of quality and consistency. Hearing aids require apersonalized fit for both functionality and comfort. To achieve this level of customization, ahighly manual process resembling traditional craft-style of manufacture was employed,often resulting in variable quality and inconsistency. Rapid manufacturing is able to deliverthe necessary personalized fit in addition to consistency and quality. Masters also cites thebiocompatibility of SLS nylon material as an inherent benefit of the technology.19 Phonak, one of the top three global manufacturers of communication and ear caretechnology, uses selective laser sintering to manufacture nylon hearing aids. In addition todelivering a personalized device in a biocompatible material, rapid manufacturing allowsPhonak to carefully control their production process and quickly deliver original orreplacement products to customers. 20 Siemens, the market leader in hearing aids, alsoutilizes SLS technology to manufacture hearing aids. Like Phonak, Siemens cites processcontrol and improved quality as the primary advantages over traditional manufacturingmethods.212.1.4 Sports Equipment Delamore, et al, demonstrates the use of SLS in the development of bespoke footballboots citing advantages such as the ability to produce customized sensory and aestheticfeatures and design freedom through consolidation of components and application offunctionally graded materials. 22 Gerrits describes the use of SLS to manufacture acustomized helmet for an Olympic rower. The helmet was designed to reduce bodytemperature by reflecting sunlight and optimizing wind flow along the rower’s skull, thusimproving comfort and performance.23 Current research at Loughborough University isinvestigating the use of rapid manufacturing technologies to produce tailored sportsgarments optimized for injury prevention and impact protection.24 These examples of additive technology in sport target the niche market of world classathletes, not the mass market of amateurs. While the high cost of personalized developmentis currently limited to professional athletes who can more easily justify the expense andquantify the value of competitive advantage, continued improvements in additive 11
  12. 12. Rapid Manufacturing and the Global Economytechnology and subsequent reduction in cost may make this application more widelyaccessible.2.1.5 Aerospace Industry Fox presents variety of factors which make rapid manufacturing attractive to firmswithin the aerospace industry. Tooling is not cost effective given the low productionvolume of the aircraft industry, so the small-batch ability of rapid manufacturing isattractive. Further, rapid manufacturing is able to produce truly functional componentswith adequate material, geometry, and accuracy. Rapid manufacturing technologies are alsoflexible in their ability to build using a variety of materials, thus the continuousdevelopment of new materials suitable for rapid manufacturing will only support thecontinued application of the technology.25 Fox also presents an example of British Aerospace utilizing SLS technology tomanufacture complex duct work for its aircraft. Boeing and the US Navy also utilized SLSto manufacture cooling ducts with complex geometry for the F/A-18 Hornet. In the case ofthe F/A-18 Hornet, SLS was able to provide both the accuracy and material functionality aswell as the benefit of consolidating the number of components, thus reducing the need forintermediate assembly.26 Spielman reflects on the use of rapid manufacturing to produce “Flight Certified”components for use in space. Two hundred plastic capacitor housings were to bemanufactured for the international space station—a quantity which made rapidmanufacturing more economically viable than injection molding. Despite the need toqualify the material and process prior to production and use, the total cost of productdevelopment remained lower than that featuring traditional tooling.27 The University of Loughborough worked with Martin Baker Aircraft to developpersonalized ejector seats for pilots, but were ultimately limited by materials constraints.28 Steward examined the application of rapid manufacturing in the production ofpremium airline seats. He cites benefits of rapid manufacturing given the low volume ofpremium seats and complexity of seating design, but acknowledges that material limitations,the need for aesthetic finishing operations, and size constraints limit the practical applicationto small, non-cosmetic, non-structural seat components.292.1.6 Motor Sports Tromans has examined the application of rapid manufacturing in the automobileindustry, specifically its early applications within motor sports. He notes that rapidmanufacturing is well suited for Formula One and NASCAR because of its ability to 12
  13. 13. Rapid Manufacturing and the Global Economyproduce customized functional components in small volumes, generate complex geometrieswhich may be otherwise unmanufacturable, and quickly turn around new or replacementparts.30 The Renault Formula One team recognized the early potential of rapidmanufacturing and developed a digital manufacturing center in 2002 with 3D Systems, apioneer of stereolithography technology. 31 The ability to make quick modifications tofunctional components and reduce the need for assembly by consolidating multiplecomponents into single parts is advantageous for F1 teams. Morrison provides an example of custom motorcycle shops which are utilizingadditive fabrication to produce functional parts in low volumes for their unique bikes.32 Kimberley discusses numerous applications of rapid manufacturing by the Italianfirm CRP Technology to optimize complex, functional components in low volumes. He citesexamples from Formula One racing, including break ducts, air intakes, and body panels, aswell as examples from championship motorbikes including seats, mudguards, andwindscreens.332.1.7 Art and Furniture Rapid manufacturing has also allowed artists to construct works previouslyrestricted to their imaginations. EOS has collaborated with designer Assa Ashuash todevelop an artistic chair with optimized ergonomic and structural properties.34 Materilise, arapid manufacturing and design company based in Belgium, offers a variety of lamps, vases,and other interior ornaments.35 And the Dutch firm Freedom of Creation uses laser sinteringto produce a range of artistic lighting and furniture pieces which are not manufacturable bytraditional methods. Freedom of Creation has also used SLS technology to producepersonalized awards and trophies for a variety of clients.362.1.8 Aesthetic Models Morrison provides an example of firms using rapid manufacturing to producearchitectural models faster and cheaper than traditional, manual-intensive methods. 37Wisconsin-based 3D Molecular Designs employs five different rapid manufacturingtechnologies to produce complex models of proteins and other molecules for scientists andacademics.382.2 Current Areas of Research In addition to the wide variety of additive products have already beencommercialized, many other applications are currently being researched. 13
  14. 14. Rapid Manufacturing and the Global Economy2.2.1 Textiles Fralix has documented the potential for mass customization within the apparelindustry.39 Hague has described the benefits of rapidly manufactured textiles, includingseamless garments, customized tailoring, the creation of products that transition from solidto fabric, and the potential to produce smart textiles with embedded functionality such ascomputing.40 Evenhuis and Kyttanen first developed the concept for the rapid manufacture oftextiles composed of individual links and their company, Freedom of Creation, hascommercialized a limited number of textile products which are manufactured using SLS.However, current technical capabilities limit the resolution of rapidly manufacture textiles,which tend to be quite crude and resemble medieval chainmail. Continued improvementswill likely expand the number of potential applications.412.2.2 Automotive The automobile is arguably responsible for the emergence of mass production in itscurrent form.42 Given the sheer volume of automobile production, the application of rapidmanufacturing within the automotive industry has been largely limited to the niche marketof high performance vehicles and concept cars. Lamborghini worked with CRP Technology to manufacture a carbon fibre headlightwasher cover flap for its Gallardo sports car using SLS. The aerodynamic and aestheticrequirements of the high speed vehicle demanded dimensional precision and reliability in avariety of environmental situations. While this represents the successful application of rapidmanufacturing in the manufacture of consumer automobiles, it must be noted that the initialproduction run was for only one hundred vehicles.43 Knight discusses research conducted by MG Rover and Loughborough University toassess various automotive applications of rapid manufacturing, including seats, steeringwheels, and hand breaks customized to fit individual drivers. While the ability to createaccurate part geometry exists, researchers believe there is a need to ensure the repeatabilityof mechanical properties before utilizing the technology for structural and safetyapplications.44 Hyundai collaborated with Freedom of Creation to manufacture aesthetic floorcarpeting for the QarmaQ concept car using SLS.452.2.3 Bone Scaffolds Despite the success of their titanium cranial implant, Janssens and Poukensaddressed the need for implants to be constructed of materials featuring biocompatibility 14
  15. 15. Rapid Manufacturing and the Global Economyand the ability to support bone growth rather than simply replace it. Cooke researched theuse of stereolithography to manufacture porous structure for tissue engineering applications.Cooke’s study developed bespoke bone scaffolds using biocompatible, biodegradablematerial to support cell regeneration in animals with promising results.462.2.4 Drug Delivery Harris and Savalani have discussed the use of rapid manufacturing technologies toprovide effective, personalized methods of drug delivery. They postulate that the ability ofSLS or 3D-Printing to create functionally graded materials may enhance the drug releaserate of oral pharmaceuticals by optimizing the density and diffusivity of each pill. Further,they suggest that the ability to manufacture each tablet individually would allow for patientcustomization, as a single tablet containing multiple drugs with personalized dosages anddelivery times may replace the need to take multiple pills throughout the day.472.2.5 Construction Others have examined the potential to apply rapid manufacturing techniques tolarge scale construction projects. Soar explains that the construction of buildings and otherstructures is well suited for rapid manufacturing because of its ability to producefunctionally graded and optimized designs, provide individual customization, and reducethe need for assembly by integrating features such as wiring or ducting. 48 While thisdemand for customization and flexibility are supported by rapid manufacturing principles,the technology required to meet such demand is still in infancy. Khoshnevis cites theunsuitability of existing technologies as the primary factor limiting widespread uptakewithin the construction industry, notably the low deposition rate of existing technologiesand the inability to deliver a wide range of materials simultaneously.492.3 Feasibility of Implementing Rapid Manufacturing at the Firm Level In addition to the numerous examples of rapid manufacturing applications, thefeasibility of implementing the technology for specific parts or for individual firms has beenwidely documented. Hopkinson examined the production economics of rapid manufacturing compared totraditional injection molding at the part level. He considered the machine costs, labor costs,and material costs of various rapid manufacturing technologies compared to traditionalmethods (Figure 2.1).50 It must be noted that the magnitude of cost savings will vary fordifferent applications as the unit cost of rapid manufacturing is highly dependent upon partgeometry. 15
  16. 16. Rapid Manufacturing and the Global Economy Figure 1.1: Production Cost Comparison for Various Technologies, 3.6 g part (Hopkinson 2006). Rufflo, et al, expanded upon Hopkinson’s study by accounting for the initialoverhead cost of the rapid manufacturing machine, as well as recurring maintenance costs,labor costs, and other costs. He also considered the cost incurred by building impartial lines,layers, or builds. Using the same baseline part, Rufflo found a higher per-part cost estimatethan Hopkinson’s study and also showed the effect of non-optimal build quantities (Figure2.2). Despite finding a higher cost per part, Rufflo’s study confirms the value of rapidmanufacturing for low volume production compared to injection molding.51 Figure 2.2: Production Cost Comparison for Laser Sintering and Injection Molding, 3.6 g part (Rufflo, et al. 2006). Tuck and Hague examined the effect of rapid manufacturing at the firm level. Inaddition to improved production economies, they note significant reductions in inventory, 16
  17. 17. Rapid Manufacturing and the Global Economylabor, and distribution costs. They postulate that rapid manufacturing may result in ageneral reduction in overhead costs, shorter lead time to market, the near elimination of rawmaterials, work in progress inventory, and finished goods inventory. They also examine avariety of potential supply chain strategies given the freedom to manufacture in anyenvironment.52 Reeves has provided a methodology to assess the value of implementing rapidmanufacturing for individual businesses. He discusses the business drivers, materialconsiderations, and process considerations which should influence a firm’s decision toimplement rapid manufacturing. He also touches on higher level impacts, including areduction in supply chain and capital costs as well as reduction of lead time and theadvantage of being first to market.53 Walter, Holmström and Yrjölä discuss the potential impact of rapid manufacturingon supply chain management by examining the many shortcomings of traditional spareparts supply methods within the airline industry and introducing rapid manufacturing as apotentially valuable alternative. They conclude that rapid manufacturing is especially wellsuited for low volume production of parts featuring variable demand, high inventoryholding costs, and high logistics costs.542.4 Characteristics of Promising Applications The preceding cases highlight many disruptive characteristics of rapidmanufacturing which have driven commercialization of the technology. These primarycharacteristics are: 1. Personalization. The ability to manufacture truly personalized features has been shown in numerous cases. Visual customization has been shown in art, aesthetic models, and automobiles. The value of comfort and functionality achieved by the manufacture of products to fit a consumer’s body has been shown in the cases of hearing aids, bespoke football boots, and bone scaffolds. 2. Responsiveness. The value of speed and reduced lead times achieved by rapid manufacturing has been widely documented and shown to be especially useful for products which are fashionable, such as clothing, or products with variable demand, such as spare parts. 3. Low Volume. The elimination of tooling and subsequent cost reduction is especially valuable for applications featuring low production volumes, such as motorsports or aerospace. 17
  18. 18. Rapid Manufacturing and the Global Economy 4. Complexity. The ability to produce complex geometries which were previously impossible to manufacture, such as optimized airflow systems, is also extremely valuable. Rapid manufacturing also allows for the consolidation of components and reduction of assembly costs.2.5 Limitations of Current Technology Despite the numerous benefits, the previous cases also highlight barriers which limitthe feasibility of implementing rapid manufacturing. While additive technologies arecontinuously being researching and improved, a number of issues still remain. 1. Resolution. The precision and resolution of additive technologies limits their feasibility for some applications, as the need for finishing or post-processing results in additional costs. 2. Size. The build envelope of current rapid manufacturing technologies limits its application to relatively small products. The largest additive system is capable of building a part only 59” across.55 3. Reliability. While rapid manufacturing is able to provide some level of control and repeatability to previously manual processes, the overall quality and reliability of the process has yet to be qualified. If rapid manufacturing is used to produce a highly customized functional component, each iteration may potentially require reliability or safety testing. 4. Speed and Cost. The low deposition rate of rapid manufacturing limits its application in large-scale projects, such as construction. And the high cost of materials makes rapid manufacturing an unlikely replacement for high-volume, low- value industries. 5. Materials. Current materials also limit the number of practical applications of rapid manufacturing technology. Questions of biocompatibility restrict in vivo applications, with only limited achievements in the field of hearing aids. The ability to manufacturing multiple materials at the same time is also a current limitation of the technology. And while the ability to provide functionally graded materials my eventually prove valuable, it has yet to be commercialized. 18
  19. 19. Rapid Manufacturing and the Global Economy3 Potential Impact of Rapid Manufacturing on Current Products This chapter will identify products and sectors which are most likely to be affectedby rapid manufacturing based on the characteristics identified in the previous chapter. Itwill introduce a methodology used to evaluate the potential impact on individual productsin terms of applicability and feasibility. Applicability refers to the ability of rapid manufacturing to add value to a product.Value may be added by providing customization and improved responsiveness based onconsumer demand. Value may also be created through geometric optimization and partconsolidation, which may also reduce assembly and tooling costs. Feasibility, in contrast, refers to the ability of rapid manufacturing technologies toactually manufacture products given current or expected limitations in terms of materials,size, resolution, reliability, and cost. In addition to identifying products which are mostlikely to be impacted by rapid manufacturing, evaluating the feasibility of the mostpromising applications will provide a basis for future research and improvement of rapidtechnologies. It is important to note that applicability will dictate the uptake of rapidmanufacturing more so than feasibility. Consumer demand must exist and value must becreated to justify the application of rapid manufacturing technologies. A product’s ability tobe constructed through additive means may not provide any additional value compared toconventional methods, and would therefore not justify a shift in production style.3.1 Methodology To evaluate the potential impact of rapid manufacturing for a large quantity ofindividual products, a consistent and transparent methodology is necessary. To date, nosuch methodology has been developed and a study of such scope has not been undertaken. This evaluation intends to provide a high level analysis of all commonlymanufactured and globally traded goods. It strives to identify products and sectors mostlikely to be affected by rapid manufacturing, thus allowing conclusions to be drawnregarding the potential impact of rapid manufacturing upon the global economy. Givensuch a wide scope, a flexible methodology has been developed which may accommodate adiverse range of products. The proposed methodology resembles a failure mode and effect analysis, a commonengineering tool used to evaluate product reliability in terms of multiple, independentcharacteristics. The simplicity of this method will provide flexibility to assess a wide varietyof products, each with very different features.56 19
  20. 20. Rapid Manufacturing and the Global Economy Characteristics presented in the previous chapter will serve as criteria for assessment.Each individual product will be assigned a numeric score for each characteristic to quantifythe value which may be added by rapid manufacturing. These criteria scores will bemultiplied to determine a “value score” for each manufactured product. This “value score”will enable the comparison of different goods based upon the total value received fromrapid manufacturing. While certain products will likely achieve greater value from certaincharacteristics, all criteria will carry an equal weighting for mathematical simplicity, clarity,and consistency, allowing for an unbiased comparison of different products. A weightedscale of 1 (low value), 2 (minor value), 4 (moderate value), and 8 (high value) was used toevaluate each characteristic.* Once the most applicable products are identified, the feasibility of manufacture willbe assessed using a similar scale ranging from 1 (not feasible) to 8 (feasible).3.1.1 Applicability Consumer demand for customization is one characteristic which will continue todrive the acceptance of rapid manufacturing technologies. However, various levels ofcustomization exist. Extreme customization, such as body fit or ergonomic personalization,achieves perhaps the highest value for products requiring direct input from the user toimprove comfort or performance (value = 8). Modular personalization, resulting invariations of shape, size, or material, is of less value than ergonomic personalization butmay significantly improve functionality (value = 4). Basic customization, such as color orappearance, may significantly affect aesthetic qualities of a product, but is of less value thanergonomic or modular personalization in that it has no impact on functional performance(value = 2). Some products may achieve no value through personalization (value = 1), suchas purely functional products with little user interaction or products for which value may beactually be achieved through standardization. Consumer demand for responsiveness is also highly variable. Rapid manufacturingmay deliver high value for products which require immediate availability in response tosporadic demand (value = 8), but little value for products featuring consistent demand(value = 1). Intermediate products may be assessed in terms of fashionability, with highly* An exponential scale was selected in preference to a linear scale to better distinguish products gainingsignificant value from rapid manufacture. A variety of alternate scales were also investigated to prove therobustness of the methodology, including both linear scales of [1,2,3,4], [1,3,5,7], and [1,4,7,10] and exponentialscales of [1,3,9,27]and [1,4,16,64]. Use of these scales identified nearly the same products to be promisingapplications as the originally selected exponential scale of [1,2,4,8] with 96% consistency. The decision tocalculate the “value score” through multiplication rather than addition was also investigated. The addition ofexponential scales resulted in generally the same products as multiplication with 73% consistency. 20
  21. 21. Rapid Manufacturing and the Global Economyfashionable products receiving moderate value from rapid manufacture (value = 4) and lessfashionable products resulting in lower value (value = 2). Value can also be achieved by enabling the production of complex products orsimplifying the number of components and labor required for assembly. Highly complexassemblies may achieve high levels of value through rapid manufacturing (value = 8), whilesimple assemblies may achieve moderate levels of value (value = 4). Complex componentsmay achieve some value (value = 2) while simple products offer little to no value (value = 1). Reduction of tooling costs and the ability to deliver low production volumes isperhaps the most disruptive aspect of rapid manufacturing. It is especially valuable forproduction quantities of one (value = 8), but is also valuable for low production volumes upto 1000 (value = 4). Medium production volumes between 1000 and 10,000 offer somebenefit (value = 2), while no benefit is achieved for mass produced products with quantitiesover 10,000 (value = 1). While the scale of appropriate production quantities may changegiven improvements in technology, the concept of individual, low, medium, and highproduction volumes remains relevant.3.1.2 Feasibility Once the most promising products have been identified, each will be evaluatedbased on feasibility of manufacture. Current limitations of rapid manufacturing technologywere discussed in the previous chapter will provide criteria for assessment. The resolution of additive technologies may limit the feasibility of producing certainproducts containing small features, fine detail, or requiring an exceptionally smooth surfacefinish. Products requiring resolution which is achievable using current rapid technologiesare considered highly feasible (value = 8). Products requiring resolution which may beattained assuming reasonable advancements in technology over the next decade areconsidered somewhat feasible (value = 4). Products requiring significant advancements inrapid technologies to meet resolution requirements are not feasible (value = 1). Current rapid manufacturing technologies are also limited by the size of their buildenvelope. Products measuring less than one cubic foot are considered highly feasible (value= 8) as they are able to fit within the build envelope of a typical additive system. Assumingreasonable advancements in additive technology over the next ten years provide buildenvelopes of up to one cubic metre, medium sized products may be considered somewhatfeasible (value = 4). Extremely large products in excess of one cubic metre will requiresignificant advancements in rapid technologies and are not currently feasible (value = 1). 21
  22. 22. Rapid Manufacturing and the Global Economy As an emerging technology, many questions still surround the reliability andrepeatability of additive processes. Non-functional products have little need for reliabilityassurance and may be considered highly feasible given today’s level of technology (value =8). Products with minimal reliability requirements may be considered somewhat feasible(value = 4). Highly functional and high performance products, or products which mustmeet strict safety requirements, will require further advancements in rapid manufacturingprocesses (value = 1). The speed and cost of manufacture also limit the application of rapid manufacturingfor certain products. The low deposition rate and high cost of material make rapidmanufacturing ill-suited for the production of large, low value products (value = 1). Small,high-value products are more likely applications of the technology in its current form (value= 8). Reasonable advancements in technology over the next ten years may expand thepotential applications to include larger products of lower value (value = 4), but rapidmanufacturing is unlikely to be cost effective extremely large products. Materials represent another barrier for rapid manufacturing. While significantadvancements have been made in terms of material variety and functionality, the ability toreplicate certain material characteristics is not yet feasible. What is more, current additivetechnologies lack the ability to fabricate multiple materials simultaneously. Plastic ormetallic products of single material may be considered highly feasible (value = 8), whileproducts requiring high performance materials or biocompatibility and products composedof multiple materials may be considered somewhat feasible given moderate futureadvancements (value = 4). Heat sensitive materials such as glass and materials featuringunique tactile characteristics such as wood or fine textiles will require significantimprovements in current technology (value = 1).3.2 Analysis of Current Products The methodology described above was applied to over two thousand manufacturedproducts listed in the Standard International Trade Classification, Revision 3 (SITC Rev 3).SITC Rev 3 was selected due to the completeness of global trade statistics, which will formthe basis of the economic analysis conducted in the following chapter. The products listed in SITC Rev 3 were first evaluated based on the value which maybe added through rapid manufacturing. Full results of this analysis have been provided inAppendix I. The most promising products were then evaluated based upon the feasibility ofmanufacture, the full results of which are available in Appendix II. 22
  23. 23. Rapid Manufacturing and the Global Economy The following section will discuss the products identified as receiving the most valuefrom rapid technologies. For clarity of presentation, similar products will be grouped intoproduct families, each possessing similar characteristics well suited for rapid manufacture.A detailed explanation will also address the feasibility of manufacture, as not allapplications are feasible given current or even reasonable advancements in additivetechnology.3.2.1 Medical Devices Medical devices are perhaps the most promising application of rapid manufacturingtechnology. Medical devices derive their greatest benefit from customization, as productsmay be tailored to fit the recipient’s body. This includes both in-vivo products, such ashearing aids, dental implants, and other artificial body parts, and in-vitro products, such asspectacles and frames, walking sticks, and therapeutic or massage apparatuses. Medicaldevices are also among the most feasible products to manufacture using additive methodsdespite questions regarding the availability of materials and product reliability. Theapplicability and feasibility of medical devices is further evidenced by the numerousexamples of commercialized applications presented in the previous chapter.3.2.2 Art and Home Décor Artists and designers have only recently embraced rapid manufacturing, but thelimitless design potential of additive fabrication allows the feasible production of highlycomplex, customized products in volumes of one. This is especially valuable for art andother interior decorations, especially those of high complexity featuring ornate details,which would benefit from reduced assembly costs and are valued for their artistic qualities. Clocks are a good application given their high level of fashion, the potential demandfor customization, and the complex assembly which may be reduced through rapidmanufacturing techniques. Lighting fixtures offer another opportunity for high aestheticcustomization. Decorative wall ornaments are perhaps the most feasible application ofrapid technology given the current technical capabilities of additive fabrication systems.Improved resolution, speed, and material selection will continue to justify the uptake ofrapid manufacturing for this application. Decorative woven articles, such as awnings, curtains, and tapestries, may also benefitfrom high levels of aesthetic customization in terms of color, design, and shape. The abilityto manufacture in low volumes and respond to individual demand is also highly valuable.However, the technology required to manufacture fabrics is still in infancy, and further 23
  24. 24. Rapid Manufacturing and the Global Economyadvancements in materials and resolution are needed to replace traditional forms ofmanufacture. Floor coverings, including hardwood, tile, carpet, or linoleum, provide an interestingcase. Currently, floor coverings are installed on-site. Raw materials are delivered to alocation and the floor covering is shaped to fit the unique interior space. In effect, floorcoverings are manufactured in volumes of one, and inherently possess both modular andaesthetic customization. These features make it ideal for rapid manufacture, but currenttechnical capabilities severely limit the feasibility of such an application. Significantimprovements would be required in terms of material availability and resolution. What ismore, size and deposition rate limit the physical and financial feasibility of such anapplication.3.2.3 Jewellery Jewellery is another application which would greatly benefit from the valueprovided by customization. This includes watches, watch straps, rings, bracelets, and otherarticles of metal or precious metal. The feasibility of using additive technologies forjewellery manufacture will increase as a greater variety of materials, including preciousmetals, become available for rapid manufacture.3.2.4 Musical Instruments The manufacture of musical instruments is another area which may be significantlyimpacted by additive fabrication. Musical instruments typically feature high levels ofcomplexity, and rapid manufacturing would allow for a reduction in the number ofcomponents, reduced assembly costs, and potentially optimized acoustic performance.Instruments may also be designed to provide custom ergonomic fit for the musician or evena signature sound. Additional research in this area is required, as material composition is akey component of acoustic performance.3.2.5 Sports Equipment Another commercially viable application of rapid manufacturing is sporting goods,including clothing and equipment. Sport offers an ideal application of rapid technologiesgiven the premium value associated with individual performance which is able to justifyhigher development costs. This has been shown by previous examples of bespoke footballboots and applications within Formula One racing. While it is conceivable that rapidmanufacturing may someday deliver customized products to even casual athletes, thecurrent high cost of development restricts the market to that of high performance sports. 24
  25. 25. Rapid Manufacturing and the Global Economy Clothing, including footwear, safety equipment, and other high performancegarments would greatly benefit from ergonomic customization. The numerous benefits ofbespoke football boots discussed in the previous chapter may be applied to other sportingfootwear such as tennis shoes, basketball shoes, ski boots, and ice or roller skates. Safetyequipment, such as headwear and lifejackets, may also be customized for optimumperformance. While the successful commercialization of bespoke football boots reinforcesthe feasibility of sports apparel, continued advancements in materials and resolution as wellas a decrease in the cost of production are necessary for industry wide uptake. The ability to customize other sports equipment, such as tennis racquets or golf clubs,to fit individual athletes may also result in improved performance or comfort. Otherprobable applications include skis, surfboards, and saddlery. Rapid manufacturing mayallow for optimized design of high performance woven articles, such as sails or parachutes.These articles would also benefit from aesthetic customization and reduced assembly costs. Given the ability of rapid manufacturing to deliver highly responsive supply,childrens toys have oft been presented as a promising application. 57 However, most toyswould benefit from only minor customization, such as color and shape, and the simplicity ofmost toys remains better suited for high volume manufacture. But rapid manufacturing iswell suited for more complex toys which would also benefit from ergonomic customization.Bicycles, tricycles, and scooters, for example, would benefit from improved safety andcomfort achieved through customization, as well as a reduction in assembly costs.3.2.6 Consumer Electronics Consumer electronics provide another potentially promising application of rapidmanufacturing, but significant advancements in technical capabilities are required before theproduction of such products is considered feasible. Consumer electronics are highlycomplex and would significantly benefit from a reduction in assembly costs. They are alsoincreasingly viewed as fashionable, as many products offer varying levels ofcustomization—from aesthetic to functional. What is more, consumer electronics possess arelatively short product lifecycles. As technologies become outdated, they are replaced bynewer models and there is a need for producers to reinvest in tooling. Rapid manufacturingwould allow for the production of highly customized products in immediate response toconsumer demand, while eliminating the need for assembly and tooling. Telephones and mobile phones are highly fashionable and would benefit fromaesthetic customization. Headphones, earphones, and hand tools may be personalized tocomfortably fit the individual consumer, thus resulting in improved performance. 25
  26. 26. Rapid Manufacturing and the Global EconomyHowever, further research is needed before additive technologies are capable of supportingcomplex, electronic circuitry. Alternatively, certain consumer electronic components, suchas casings and housings, are well suited for rapid manufacture in its current form.3.2.7 Architecture and Construction The very nature of construction, featuring highly complex, highly customizedproducts in low volumes, is well suited for additive fabrication. But as previously discussed,the slow deposition rate of current additive technologies and the inability to utilize multiplematerials simultaneously limits the feasibility of large scale construction. What is more, thereliability of additive technologies has yet to be proven for use in such applications whichmust consider structural integrity and human safety.3.2.8 High Value Machinery Rapid manufacturing is well suited for complex industrial machinery produced inespecially low volumes, such as hydraulic turbines or nuclear reactors. These products areproduced in very limited volumes, and would benefit greatly a reduction in part complexity,geometric optimization, and the ability to customize features in response to uniquerequirements. However, the reliability of current additive processes may be questioned forsuch high performance machinery. Further, the size of such machinery is unable to beaccommodated by current build envelopes.3.2.9 Spare Parts Many highly complex, functional products are ill suited for rapid manufacture for avariety of reasons. Heavy machinery and transport equipment, for example, are oftenstandardized and would derive little value from personal customization. They also havelong product lifecycles and stable demand, thus not benefiting from responsiveness of rapidmanufacture. What is more, these products are produced in large quantities to controlquality and reliability. While rapid manufacturing may not be applicable for the production of complexmachinery, it offers significant value for the fabrication of spare parts and components.Rapid manufacturing can support the agile supply of spare parts for machinery which arehighly complex and feature highly sporadic demand. Significant value is created by suchresponsiveness which allows for the compression of lead time as well as the elimination ofinventory.3.2.10 Luxury Clothing Clothing is currently mass produced in a variety of colors, shapes, and sizes toprovide consumers with some level of modular customization. Rapid manufacturing, 26
  27. 27. Rapid Manufacturing and the Global Economyhowever, may potentially allow for entirely bespoke wardrobes. While a demand forrapidly manufactured clothing may exist, the feasibility of such an application may bedifficult to realize. Significant advancements in materials technology and machineresolution are required to make the fabrication of clothing feasible. Luxury garments, such as suits, jackets, and dresses, provide a potentially goodapplication given their high levels of customization, low volume of production, highfashionability, and short product life cycle. Bespoke suits and dresses are among the onlyforms of clothing which are not mass produced today, resulting in justifiably higher costs.In addition to providing customized products responsively, the ability to manufacturewithout the need for assembly would be beneficial. While demand for such an applicationclearly exists, technical capabilities limit the feasibility of manufacturing fine textiles.3.2.11 Vehicles Luxury recreation vehicles such as yachts, cruise ships, and campers, possess manycharacteristics which make them ideal candidates for rapid manufacture. While all types ofvehicle would benefit from aesthetic and modular customization and a reduction inassembly costs, recreation vehicles tend to be produced in lower volumes which are moreconducive to rapid manufacture. Automobiles were also identified as a promising application given their highpotential for customization and potential reduction of assembly costs through designoptimization. Motorcycles would likely achieve even greater benefits from ergonomiccustomization including improved comfort, safety, and performance. While recreational vehicles possess many intriguing characteristics, the need to meetstrict safety and reliability requirements may be difficult given both potentially significantvariations in design as well as the unproven nature of rapid manufacturing. What is more,the feasibility of producing full size passenger and recreational vehicles is currently limitedas the size of such products is unable to be accommodated by the build envelope of currentsystems. Certain components, such as body panels or seats, are slightly more practical thanan entire vehicle, but even these components are currently not feasible given currenttechnical limitations.3.2.12 Unpromising Applications A wide range of products will likely be unaffected by the advent of rapidmanufacturing. Highly functional products, raw materials, and simply worked products arelikely to achieve little value from additive fabrication. Some of these products may gainvalue from possessing a standard shape and size, while others tend to be consumed in 27
  28. 28. Rapid Manufacturing and the Global Economyextremely high volumes. For both reasons, mass production provides a more suitable formof manufacture. Complex industrial machinery and scientific instrumentation are typicallyvalued for their functional rather than ergonomic characteristics. The same can be said forsimple products such as screws, paperclips, or bottle caps. Raw materials including plasticsin primary form, yarn and fabric, plywood and other simply worked wood, and bulk metalproducts such as tubing, piping, wire, sheets, and ingots are unlike to be impacted. 28
  29. 29. Rapid Manufacturing and the Global Economy4 The Next Industrial Revolution? The previous chapter identified a variety of products possessing characteristics wellsuited for additive fabrication and evaluated the feasibility manufacture given current orreasonable advancements in additive technology. This chapter will attempt to quantify thepotential impact on global trade which may result from mass uptake of rapid manufacturingfor those products identified.4.1 Manufacturing and the Global Economy Continued advancements in transportation, communication, and informationtechnology coupled with the reduction of policy barriers and liberalization of trade hasenabled the development of a global economic system more closely integrated than everbefore.58 Manufacturing is a critical component of the global economy, accounting for overtwo-thirds of global trade.59 OECD Trade Balance 400000 200000 Trade Balance (US$ millions) Machinery and Transport Equipment 0 Chemicals Beverages and Tobacco Oils and Fats -200000 Crude Materials Food and Live Animals Other goods -400000 Basic Manufactures Miscellaneous Manufactured Goods Mineral Fuels -600000 -800000 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year Figure 2.1: OECD Trade Balance with Rest of the World (Euromonitor International 2008).60 An ever increasing portion of global trade is taking place between developed anddeveloping nations, but the nature of trade is very imbalanced. Members of theOrganization for Economic Cooperation and Development, or OECD, tend to export highvalue products, such as machinery, transport equipment, and chemicals, while emergingnations tend to export basic manufactured goods and mineral fuels (Figure 4.1). The balanceof basic and miscellaneous manufactured exports has slowly moved from developed todeveloping nations over the past twenty years as emerging economies are able to leverage 29
  30. 30. Rapid Manufacturing and the Global Economytheir comparative advantage in labor to ma-nufacture articles at lower costs. This shift inproduction is often perceived as a threat to developed nations, thus prompting many toproclaim rapid manufacturing the savoir for western industry. But, as discussed in theprevious chapter, not all manufactured products are well suited for rapid manufacture.4.2 The Perceived Impact of Rapid Manufacturing The potentially disruptive nature of rapid manufacturing is evident given itsfundamental differences with mass production. This has driven many to assert that rapidmanufacturing will result in “the next industrial revolution” or claim that it will enable “amanufacturing renaissance” in developed nations. 61 While common in literature, theseclaims remain largely unsubstantiated. A vast majority of literature on rapid manufacturingis dedicated to technical attributes of additive technology. Novel applications are becomingincreasingly common, while case studies examining the economic or operational impact atthe firm level remain infrequent. Larger, industry-wide analyses are even less common, andthe wider impact of rapid manufacturing on global economy and society has yet to beexamined. In Rapid Manufacturing: An Industrial Revolution for the Digital Age, Hopkinson, Hague,and Dickens provide arguably the most complete explanation of rapid manufacturingtechnology and applications to date. They evaluate the potential impact of rapidmanufacturing upon consumers and business, as well as its potential impact on howproducts are designed and distributed. However, their focus remains largely constrained tothe individual firm—a very relevant subject, but far from the “next industrial revolution”touted in their introduction.62 Tuck and Hague state that “the ability to remove [logistic,labour, and stock holding] costs could also affect the manufacturing environment on aglobal scale, by reuniting manufacturing to the country of origin, as labour costs are nolonger a burden.” However, they make no attempt to quantify such claims.63 Following a thorough analysis of additive technologies, McMains offers thefollowing, similar conclusion: “The ability to make customized products with fastturnaround times might even reverse the current trend throughout U.S. industry towardoffshore manufacturing.”64 However, no evidence is offered to support such a claim asidefrom her explanation of basic rapid prototyping technologies and materials. Knight offersthe same, unsubstantiated conclusion: “As rapid manufacturing requires no tooling, thetechnology could cut manufacturers costs, and ultimately help to reverse the trend ofproduction moving to China and India.”65 30
  31. 31. Rapid Manufacturing and the Global Economy But to what extent will rapid manufacturing impact global trade? What productsand sectors are most likely to be affected? Will some countries be more impacted thanothers? Is rapid manufacturing truly capable leading a manufacturing renaissance indeveloped nations?4.3 The Real Impact of Rapid Manufacturing The ability of developed and developing nations to manufacture domestically willundoubtedly impact the current magnitude of global trade, potentially disrupting the levelof surpluses and deficits of individual nations and within individual sectors. Havingidentified a variety of products for which additive fabrication is most applicable and mostfeasible, the potential economic impact of large scale adoption may be quantified. Tradestatistics from 2005 will be analyzed as recorded by the United Nations’ Commodity TradeStatistics Database. This year was chosen given its high level of completeness relative tosubsequent years.4.3.1 Potential Magnitude Seventy products and product types were identified in the previous chapter forwhich rapid manufacturing is most applicable. These products represent 10.79% of globallytraded manufactured articles by value. Of those, only thirty-nine products were identifiedas feasible given reasonable advancements in rapid manufacturing technology, representingonly 2.05% of globally traded manufactured goods by value. Such a magnitude is unlikelyto be considered revolutionary, but closer examination reveals a disproportionate impactupon individual countries and sectors. In 2005, a US$587 billion dollar trade deficit existed between OECD nations and non-OECD nations for all traded commodities including fossil fuels, agriculture, raw materials,and manufactured goods. Manufactured goods represented eighteen percent of the totaldeficit, or US$106 billion. This deficit is largely a result of basic and miscellaneousmanufactured articles which are increasingly produced by non-OECD nations, as previouslyshown in Figure 4.1. In 2005, basic and miscellaneous manufactured articles represented a$284 billion dollar trade surplus for developing nations, while high value manufacturesimported from OECD nations represent a US$178 billion dollar deficit.66 When viewed in terms of trade deficit between developed and emerging nations, thepotential impact of rapid manufacturing appears more significant. A majority of the feasibleproducts identified as being well suited for rapid manufacture are categorized as basic ormiscellaneous manufactures by the standard international trade classification. Theseproducts represent over 20%, or US$21 billion, of the total manufacturing trade deficit 31
  32. 32. Rapid Manufacturing and the Global Economybetween OECD and non-OECD nations, and nearly 4% of the total trade deficit betweendeveloped and emerging economies.4.3.2 Impact on Products and Sectors Not all products and sectors will be equally impacted by rapid manufacturing.Luxury and recreational products will most likely be affected, while high valuemanufactures such as medical devices will remain largely unaffected. Trade statistics andanalysis by product are provided in Appendix III. Artistic products, including statues and sculpture, and other products of home décor,including lamps, chandeliers, and clocks, will be significantly affected by the uptake of rapidmanufacturing. These products represent US$40 billion worth of international trade, ofwhich nearly 30%, or US$11.7 billion, takes place between OECD and non-OECD nations.Not all artistic products will be impacted, however, as wood products, ornamental ceramicproducts, floor coverings, and woven articles including tapestries and curtains, requiresignificant advancements in rapid manufacturing technology to support industry-wideuptake. Musical instruments may also be significantly impacted by the uptake of rapidmanufacturing. The trade of musical instruments which may be manufactured usingadditive methods represents a US$2.7 billion dollar industry, one-third of which, or US$0.9billion, takes place between developed and developing nations. The trade of sports equipment, including saddlery, sails, skis, golf equipment, andtennis equipment, will also be considerably affected. These applications represent an US$8.7billion dollar industry, nearly 30% of which takes place between OECD and non-OECDnations. While rapid manufacturing has already been used to produce custom sportsfootwear, this will most likely remain a niche application as cost constraints limit thefeasibility of mass-market acceptance. The trade of jewellery products which may be impacted by rapid manufacturerepresents a US$51 billion industry, of which US$3.7 billion takes place between developedand developing nations. Medical devices, including spectacles and frames, hearing aids, artificial teeth, andother prosthetic implants, will remain largely unaffected. For these products, over 95% ofglobal trade is conducted among developed nations. The trade deficit between OECD andnon-OECD nations represents just US$1.6 billion of the US$34 billion dollar industry. As previously discussed, consumer electronics, high value machinery, and luxuryclothing will not likely be affected as significant advancements in additive technology are 32
  33. 33. Rapid Manufacturing and the Global Economyrequired to enable industry wide uptake. Perhaps the most promising consumer electronicis headphones and earphones, which, like hearing aids, may be customized to provide amore comfortable fit and improved acoustic performance. Headphones and earphonesrepresent a US$3.6 billion industry, of which $1.2 billion takes place between developed anddeveloping nations.4.3.3 Impact on Individual Nations The belief that high-wage economies will benefit from additive fabrication due to theelimination of labor and assembly costs is overly simplistic, as not all countries will beuniformly impacted by the uptake of rapid manufacturing. Also, the notion that developingcountries may benefit from the ability to manufacture domestically is oft overlooked. Inreality, rapid manufacturing provides variable advantages and disadvantages for both theconsumers and producers of individual nations. Trade statistics and analysis by country areprovided in Appendix IV. As previously stated, products well suited for rapid manufacturing account fornearly 20% of the manufacturing trade deficit between developed and developing nations.Thus, to some extent, assertions that rapid manufacturing can “stop the trend” ofproduction moving overseas is justified. But it must be noted that cost reduction is not theonly factor which will drive the adoption of rapid manufacturing. Rather, additivefabrication will be adopted for applications that derive value from customization,responsiveness, or geometric optimization. Consumers seeking these attributes typicallyreside in more developed nations. Consider that while OECD countries import over 70% ofall globally traded manufactured goods and commodities, they import an even higherportion—over 80%—of products identified as potential applications for rapid manufacturingbased on value. Thus, it can be argued that developed nations have the tendency and ability toconsume more luxury and recreational goods, such as art, jewellery, musical instrumentsand sports equipment. In fact, the United States, the United Kingdom, Germany, France,and Japan are the top five importing nations for those products described. Given thegeographic freedom allowed by rapid manufacturing, the production of these products willconceivably shift to the nations of consumption negatively affecting nations which currentlyspecialize in these manufactures, regardless of their level of economic development. Switzerland represents a developed nation which may ultimately be harmed by aworld wide uptake of rapid manufacturing. Switzerland is a model high-wage economy,routinely ranking among the highest nations in terms of gross national income per capita.67 33
  34. 34. Rapid Manufacturing and the Global EconomyHowever, Switzerland is also the world’s largest exporter of watches and clocks with nearlyUS$10 billion exported in 2005. As illustrated in the previous chapter, watches and clockspossess many characteristics which make them well suited for additive fabrication. Theability for countries to manufacture watches and clocks domestically represents anespecially significant risk to Switzerland’s second largest exported commodity as well astheir marginal trade surplus of US$4.4 billion. Italy provides another example of a high-wage economy which may be negativelyimpacted by rapid manufacturing. Italy is the world’s largest exporter of both spectaclesand jewellery—two products which may gain immense value from the customizationprovided by rapid manufacturing. Italy’s current manufacturing trade deficit of US$11.9billion may potentially increase by over 50% to US$18.6 billion given the advent of rapidmanufacturing and subsequent reduction of its two primary exports. The adoption of rapid manufacturing will also negatively impact numerous Asianeconomies currently specializing in the supply of generic luxury and recreational goods.Countries such as China, Hong Kong, India, Indonesia, and Thailand stand to be impactedto varying degrees. Chinese manufactures will be most severely impacted as nearly 17% of China’sUS$102 billion dollar trade surplus is composed of luxury and recreational products. Thisrepresents US$17 billion in trade surplus which may be eliminated if their trading partnersadopt rapid manufacturing. Indonesia, another net exporter, will also be negativelyimpacted. Nearly 2% of Indonesia’s US$28 billion dollar surplus, US$0.5 billion, may beeliminated given the rise of rapid manufacturing. Asian nations which are net importers will generally be negatively impacted. Theelimination of luxury and recreational products as manufacturing exports may cause HongKong’s current trade deficit grow by over 50%, from US$8 billion to US$12 billion. Likewise,Thailand’s trade deficit may grow 20%, from US$8 billion to US$10 billion, and India’sdeficit may grow 7%, from US$46 billion to US$50 billion. However, not all developing nations will be negatively impacted. Net exportersfeaturing a strong industrial base of transport equipment and heavy machinery, such asBrazil and Russia, will be largely unaffected by the uptake of rapid manufacturing. Thesenations will see less than a one-percent change in their current surplus of manufacturedgoods. But as their economies continue to grow and prosper, the consumers of Brazil andRussia will increasingly benefit from the ability to manufacture luxury and recreationalproducts domestically. 34
  35. 35. Rapid Manufacturing and the Global Economy The potential impact upon developed nations which are net exporters is also highlyvariable. Some net exporters will gain substantially from the ability to manufacturepreviously imported luxury goods. Given the proposed uptake of rapid manufacturing,Japan’s current trade surplus could grow from US$79 billion to US$85 billion. Germany,however, will remain largely unaffected. Its current trade surplus may grow from US$197billion to US$198 billion—a change of less than one percent. Net importers, such as France, the United Kingdom, and the United States willsignificantly benefit from the ability to produce luxury and recreational productsdomestically. France may see up to a 3.4% reduction in its trade deficit, from US$42 billionto US$40 billion. The US trade deficit may fall from US$828 billion to US$805 billion and theUK trade deficit may fall from US$131 billion to US$128 billion, reductions of 2.8% and 2.4%respectively. 35
  36. 36. Rapid Manufacturing and the Global Economy5 Conclusion The disruptive nature of rapid manufacturing is evident given its ability to delivertruly customized or optimized products quickly and in small volumes. Further, theelimination of labor costs allow for geographically unconstrained production anddistribution. Continuing advancements in additive technology and an expanding number ofpractical applications have led many to speculate that rapid manufacturing may result in asecond industrial revolution and manufacturing renaissance in high income nations. Whilerapid manufacturing will undoubtedly impact individual products, its impact uponindustrial sectors and nations has been shown to be highly variable. The industrial revolution of the 1700s was enabled by new technologies and newways of thinking, but it was only a revolution because of the significant social and economicchanges which changed the how people lived, where people worked, and what peopleconsumed. As a disruptive technology, rapid manufacturing has the potential to redefineour present conceptions of manufacturing as it removes many of the limitations inherent inthe current global manufacturing system. It will undoubtedly impact numerous products interms of design and production and fundamentally change what people consume and howpeople live. But the impact of rapid manufacturing will be much greater for certain products andsectors. Luxury and recreational goods will be most significantly impacted given the highvalue associated with customization and a reduction in part complexity and assembly costs.The uptake of additive technology may also impact the balance of trade between developedand developing nations, as well as among developed nations. The degree to whicheconomies of individual nations will be impacted has been shown to be highly variable.However, consumers in all nations stand to benefit as rapid manufacturing willundoubtedly result in improved product performance, increased consumer comfort, andnovel business models—all of which will deliver increased value to the customer. While thebalance of global trade will be impacted by rapid manufacturing, the outsourcing of mostlow-value, labor intensive industries will be unaffected. Highly functional products, rawmaterials and simply worked products are better suited for mass production, as they gainlittle value from rapid manufacture. However, as Clayton Christensen contends, radical innovation tends to create newmarkets of customers whose needs are initially unknown to themselves andmanufacturers. 68 This is perhaps the most exciting aspect of rapid manufacturing, asfreedom from the design constraints inherent in traditional subtractive manufacture will 36
  37. 37. Rapid Manufacturing and the Global Economyundoubtedly result in a multitude of innovative products which have previously beenimpossible to manufacture or not yet conceived. This study attempted to quantify thepotential impact of rapid manufacturing by evaluating current products and trade flows, butit is impossible to quantify the impact of products yet to be imagined. 37
  38. 38. Rapid Manufacturing and the Global Economy6 Future Work Given that this study attempted to evaluate the potential impact of rapidmanufacturing upon the global economy, it relied upon a methodology designed toaccommodate a wide variety of products and characteristics. A better understanding of howrapid manufacturing may impact specific products or industries may be achieved bytailoring the methodology to meet the demands of specific products. This may beaccomplished by weighting the criteria so characteristics which are considered morevaluable for a particular industry have greater influence. Further investigation into specificindustries is highly encouraged, as it may reveal a more accurate assessment of whichproducts may be affected by rapid manufacturing, and thus allow a more accurate analysisof how additive technology will impact the global economy. Spare parts were identified as a potential application of rapid manufacturing giventhe high value associated with responsiveness, reduction in part complexity, and lowvolume. Unfortunately, the standard trade classification index does not provide aclassification for spare parts thus making its magnitude impossible to quantify in the samecontext as other products. However, the SITC Rev 3 provides numerous sub classificationsfor generic “parts.” While these generic classifications may include spare parts as well asregular uncategorized components, their magnitude represents over 25% (US$1.77 trillion)of globally traded manufactured goods. This represents a significant opportunity for rapidmanufacturing, especially considering that all other applicable products identified asfeasible represent only 2% (US$0.14 trillion) of globally traded manufactured goods. For thisstudy, the value of a generic “parts” classification were considered only when listed as asubclassification of products identified as a potential applications of rapid manufacturing. While rapid manufacturing represents a fundamentally different approach totraditional manufacturing, it may be successfully integrated with systems of massproduction to deliver value for certain components. This study largely analyzed the abilityof rapid manufacturing to create finished products in their entirety. A closer evaluation of“parts” may also reveal components of mass produced products which may be impacted byrapid manufacturing. The magnitude of this impact is unable to be quantified given the lackof detail regarding “parts” within the SITC Rev 3. 38

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