3D Printing: Edge Manufacturing - Executive Overview

STRATEGIC
WHITE PAPER
TAKEAWAYS
3D PRINTING
EDGE • Will change what we
make and how we make it
MANUFACTURING
by Chris Norman • Will Redefine The Supply
Chain
and Patrick Seaman
March 2013 • New solution for both new
products and parts as
well as new option to
support legacy
infrastructure

Pepperwood Partners© All Rights Reserved March 2013 Page 1

Topics in this White Paper
 3D Printing / Additive Mfg 3  Industrial 3D Printing 14

 3D Design becomes real 4  Example: Industrial Scenario 15

 Solution: Edge Manufacturing 16
 Real Parts & Products 5
 Global Market 19
 Example: Laser Sintering 6
 Example: Military Scenario 20
 Enter: 3D Printing 7
 Edge Manufacturing Profile: Kraftwurx 21
 Industries using 3D Printing 8
 Summary & Conclusions 23
 Edge Manufacturing 9
 About the Authors 25
 Example: Consumer Goods 10  3D Printing News Stories & Quotes 27
 3D Printing “Sweet Spot” 11  About Pepperwood Partners 31


3D Printing / Additive Mfg

Additive Fabrication / Additive
Manufacturing or, as it has
become popularly known, 3D
Printing, recreates an object
layer-by-layer. Using a 3-
dimensional digital model
(CAD model) as the
“blueprint,” successive layers
of material are precisely
deposited or fused by a 3D Printing /
computer controlled “printer” Additive Manufacturing
into the desired 3 dimensional – one layer at a time
shape.


3D Design becomes real
3D Designs become Physical Objects
3D Printing is a
process of
making three
dimensional
solid objects
from a digital
model. The
technology is
used in almost
every industry
to create parts
and products.


Real Parts & Products

(left to right) Aircraft duct for Boeing 777, Turbine Parts, and Turbine Fuel Injector Ring

(left to right) Lightweight aircraft door hinge, Knee implant and 10kt White Gold Jewelry


Example: Laser Sintering
Laser sintering uses a high power laser(s) to fuse small particles of plastic,
metal, ceramic, or glass powders into the desired three-dimensional shape.

Wikipedia Commons


Enter: 3D Printing

Today’s 3D Printing technologies
make use of a wide variety of
materials including plastics, metals,
ceramics and even biological
materials. Some companies are
experimenting with composite
materials such as combining plastic
and cellulose for a wood-like result.
By using multiple print heads, 3D Printed Turbine Engine (© Kraftwurx)
different materials can be fused or
deposited at different stages,
changing the characteristics of the
object.


Industries using 3D Printing

Source: 2012 Wohler’s Report
Source: http://wohlersassociates.com/2012report.htm


Edge Manufacturing

On the Internet, servers are located “on the edge” so that they are
closest to the end-user, with the least delay of service. Edge
Manufacturing does the same, using Digital Manufacturing to reduce
costs, delivery times and only make what is needed, when it is needed.

Edge Manufacturing is an evolution of the supply chain model, where
Manufacturing-On-Demand bureaus, such as those employing 3D
Printing, are called upon to manufacture an item due to their proximity to
the destination / customer. The ramifications of Edge Manufacturing are
enormous.

It will affect the global economy in ways that corporations and
governments cannot yet fully understand.


Example: Consumer Goods
For example:

The design for an item originates in Texas and is showcased on the
internet. A customer in Australia browses and buys the product. While the
design for the item is in the USA, the item is Edge Manufactured in
Australia, so there are no USA sales taxes, international shipping, or
import/customs duties.

Suddenly, the US company is competitive in Australia.


3D-Printing “Sweet Spot”
Traditional
manufacturin
g reaches
economies
of scale with 3D Printing
Cost

large Tra
numbers of d it io
nal
items Ma
“Sweet Spot” nu fac
produced. tu r in g
for 3D Printing
3D Printing
has a mostly
uniform
production Volume ( # of Units)
cost.


3D Printing allows
for customizability ri ng
and complexity to f actu
nu
increase l Ma
independently of iti o na
d
cost. Tra
Cost

3D Printing
3D Printing
eliminates the need
for inventory and
leverages on-
demand
manufacturing and
mass customization. Customizability



Tra
di tion
3D Printing al M
anu
fac
manufacturing Current
tur
ing
3D Printing
costs will
Near-Term
gradually 3D Printing
Cost

decline, but
(mostly)
remain Long-Term Future 3D Printing
uniform.

Volume ( # of Units)


Industrial 3D Printing

On Industrial 3D Printed Parts and Items:

In the US and Europe, many 3D Printing
bureaus have been operating the
technology for as long as 20 years


Example: Industrial Scenario

Suppose a refinery or An on-site engineer Weeks later, a
industrial complex has a takes photos, makes replacement is
broken valve or other some drawings and constructed via casting,
critical part. Further sends these to an milling or other
suppose that this part is engineering firm, where traditional method and,
no longer being another engineer often weeks later,
manufactured, and the interprets the drawings shipped to the location,
original manufacturer is and designs a often going through
no longer in business. replacement. Customs (with possible
delays), across borders
or from overseas.


Solution:
Edge Manufacturing

Immediately
& On-Demand:

An on-site engineer “Winning” Certified
Replacement part is Network automatically locates
uploads manufacturer
designed, anywhere in closest Edge Manufacturers to
drawings/photos (or 3D Prints the part
the world the delivery location and bids for
his own 3D Design)
best deal
to the Cloud

Site is
operational and Locally 3D Printed part, is immediately
productive delivered to nearby customer without delay This example uses the
again quickly by shipping or customs patented Kraftwurx
Edge Manufacturing Network

Solution:
Edge Manufacturing

On demand – only make Ultimate Green: Made local – Not
what is needed, just in Little to no waste, shipped or trucked
time uses less power from distant
manufacturers


Solution:
Edge Manufacturing

Skilled Labor
What used to require a highly skilled operator with a
deep background in many complex methods and
techniques to machine, lathe, mill, etc., has been
replaced by a computer controlled machine. Once
the 3D Design is loaded into the fabricator’s
memory, the machine makes the item the same way,
every time.

Removing the need for skilled labor to operate the
machine, removes much of the barrier to produce
that item at affordable price points.


Global Market

Global GDP ( USD
)
~ 70 Trillion USD

Global
Manufacturing
Value Added ( %
of GDP) 16% =
~ 12 Trillion USD

3D Printing
Market
Penetration (%)
~10% = ~ 1.2
Trillion USD



Example: Military Scenario
Imagine that an Army tank breaks down
and the nearest replacement part is
misfiled at a supply depot, located
somewhere in an endless sea of shipping
containers. The next closest replacement
part is thousands of miles away.
An Edge Manufacturing network could analyze the part, its
destination, materials, and other factors required to produce the part
and find an appropriate facility and deliver it within days instead of
weeks or months.
The army is now deploying helicopter-delivered
mobile fabrication labs, called equipped with
3D printers, computer-assisted milling
machines, and laser, plasma, and water
cutters. Parts can be made of plastic, steel,
and aluminum..

Edge Manufacturing
Profile: Kraftwurx

Kraftwurx CEO Chris Norman:

“We produce everything as close to the
customer as possible, often in the same city
or state. This reduces waste and shipping,
which also gives Kraftwurx a low carbon
footprint.

With our growing network of more than 110+
Smart Grid™ production facilities
worldwide, Kraftwurx is establishing the new
standard for socially responsible,
environmentally friendly Edge
Manufacturing.”


Edge Manufacturing
Profile: Kraftwurx

Kraftwurx CEO Chris Norman:

“Kraftwurx uses EDGE manufacturing ✪ ✪✪
✪ ✪
✪ ✪✪ ✪
✪
✪✪ ✪✪ ✪✪ ✪ ✪
methodology and JIT or Just-In-Time ✪ ✪✪ ✪
✪✪✪✪✪
✪✪✪
✪
✪
✪
✪✪
✪✪✪ ✪ ✪✪ ✪
✪
manufacturing. An Edge manufacturing ✪✪
✪
✪
✪ ✪ ✪✪ ✪ ✪ ✪
✪ ✪✪
✪ ✪
✪ ✪
✪ ✪
✪ ✪
network attempts to place the orders as ✪✪
✪✪✪ ✪✪
✪
✪
✪
✪✪✪ ✪✪ ✪
close to the consumer as possible. It is a ✪ ✪✪ ✪✪
✪ ✪
distributed manufacturing model. 110+ Smart Grid™
production facilities worldwide

Products produced on Kraftwurx are produced at more than 110 discrete
manufacturing facilities located around the world. Facilities are in Germany,
the UK, Canada, the USA, Singapore, Thailand, Russia, Japan, Australia and
New Zealand. Kraftwurx has more than 500,000 sf of manufacturing floor split
between the more than 110 facilities.”


Edge Manufacturing
Profile: Kraftwurx
Kraftwurx’s Digital Factory Provides:

1. Load Balancing-Using AI to make determinations about where and how to
send orders to optimize output
2. Location analysis & Determination: Finding the best location for output
based on many factors typical in manufacturing
3. Part Design analysis and quality checks: Ensuring that the model to be
produced can be produced, will be suitably strong and durable for its purpose
4. Material Optimization: Making sure the best materials are chosen for the
design intent
5. Design Intent analysis: Ensuring that the part is optimized including FEA
analysis(will it break)
6. Nesting of parts: In a load-balanced system, ensuring optimum production
scheduling
7. Global SmartGrid™


Summary & Conclusions
★ 3D Printed parts can be made to be as strong, or stronger, than parts
made via traditional manufacturing methods
★ Parts can be made in hours or days, compared to weeks or even months
with traditional methods, with cost savings up to 10x or more
★ The finished 3D Printed product, such as aviation components, can be
up to 60% lighter, compared to traditionally machined part
★ Can be complete one-piece item, without need for welds or fasteners
★ 3D Printing does not require the tooling, setup and experienced and
skilled labor that traditional manufacturing methods require
★ Can build new classes of items with complex geometries that are not
possible with traditional methods
★ The time to take a digital design from concept to production is dropping,
with some estimates it will drop another 50%-80%

Summary & Conclusions

3D Printing and Edge Manufacturing will change what we make and
how we make it.

Whether the need is for:
★A new and possibly highly customized part or product
★Or, just a relatively small number of them
★Or, you need to support legacy infrastructure with quick replacement of
no-longer-being-made parts
★Or, you need a product with complex features or geometries traditional
manufacturing cannot make
★Or, you simply cannot wait for the longer traditional manufacturing
cycle, and shipping and even customs or similar delays

Edge Manufacturing fundamentally changes the equation.


About the Authors

Chris Norman is CEO of Kraftwurx and Digital
Reality, the first and only B2B & B2C mass-
customization system for 3D Printing. Mr.
Norman is a member of the Direct Digital
Manufacturing sub-committee to the Society of
Manufacturing Engineers and 16 year member of
SME. Mr. Norman earned his MBA in Technology
Management from the University of Phoenix and
a BS in Manufacturing Engineering from Texas
A&M University. Contact Chris at
chris@kraftwurx.com, and
www.linkedin.com/pub/chris-norman/b/7b0/b12.


About the Authors

Patrick Seaman is Chief Technology Advisor to
Pepperwood Partners and COO of the social
publishing platform company WhichBox Media.
Seaman is the former COO of the video
eCommerce company Cinsay, and former
Director of Technology at Broadcast.com. Patrick
serves on the Advisory Board of Kraftwurx Inc,
and Qples, Inc. and on the University of Texas at
Dallas School of Natural Sciences &
Mathematics Advisory Council, and is an IEEE
member. Contact Patrick at
patrick@pepperwoodpartners.com,
patrick@patrickseaman.com and
www.linkedin.com/in/patrickseaman/.

3D Printing News

“3D printing is going to be a
Is this “the PC all over again?”
huge industry because it's much
Machines that turn digital
more efficient than traditional
objects (bits) into physical
manufacturing. The main
objects are “Pioneering a whole
reason is that the current way
new way of making things – one
to manufacture things is to chip
that could rewrite the rules of
away at a block or sheets of raw
manufacturing in much the
material, whereas 3D printing
same way that the PC laid
adds raw material as needed.
waste to traditional computing”
Current manufacturing
– The Economist
processes create as much as
90% waste.”
– Business Insider


3D Printing News

“Why I left Wired
“Honestly, I think that 3D Magazine –
Printing will grow to 3D Printing Will Be
become the biggest, the Bigger Than The
most important, the most Web.”
strategic manufacturing – Chris Anderson
technology ever,” – Terry former
Wohlers, President Wired Magazine
Wohler’s Inc. Editor in Chief


3D Printing News

The Obama “This institute will help make
Administration sure that the manufacturing
invested $1 billion for jobs of tomorrow take root not
in places like China or India, but
the National Network
right here in the United States
for Manufacturing of America. That’s how we’ll put
Innovation (NNMI) to more people back to work and
accelerate research for build an economy that lasts.” –
3D Printing and to President Barack Obama
create a national on the investment into
network of 15 National Additive
innovation hubs Manufacturing Innovation
Institute (NAMII)


3D Printing News

“We may not fully realize it
General Electric yet, but we are at the dawn
(GE) Aviation of the next Industrial
Revolution with 3D Printing. It
purchased Morris
has the potential to
Technologies, one fundamentally disrupt how
of the largest 3D complex products like jet
engines are designed and
Printing companies
made in the future”
that manufactures -Michael Idelchik,
direct parts with VP Advanced Technologies
GE Global Research
metal


About Pepperwood Partners

Pepperwood Partners is a boutique
investment banking advisory firm
headquartered in Dallas, Texas.
Pepperwood provides a suite of
investment banking advisory
services to businesses in the Two Lincoln Centre
technology, media, telecom, 5420 LBJ Freeway, Suite 535
nanotechnology, energy and Dallas, Texas 75240 USA
+1 214.442.6056
alternative asset sectors. With a info@pepperwoodpartners.com
strong focus on institutional
relationships in the Russian, Learn more at:
European, and CIS regions, www.PepperwoodPartners.com
Pepperwood works with businesses
to achieve capitalization and growth
objectives.


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