3D printing market to grow to 12.5 billion by 2018

25 April 2016 Consultancy.uk

The additive manufacturing market, also known as 3D printing, is set to grow from around $7 billion today to around $12.5 billion by 2018, a new report finds. The technology is providing a whole new means to create complex designs – enabling companies to create new geometries and leverage more efficient materials. Barriers to wide scale adoption remain however, including scalability, talent shortfalls and material costs.

For tens of thousands of years, humans have been chipping away at things to create shapes that provide a range of everyday functions – from arrow heads to tables and chairs. The art of casting, once key metals were discovered, created an additional means of forming objects. In the late 80s, the development of laser and computer-aided design functions has delivered a new means of creating forms – known as additive manufacture (AM). In the AM process, rather than whittling away or casting, objects are built up by bonding and layering material. An object designed on a computer is sent to an AM machine which can step-wise add materials – including plastic, metal, living cells – to form ever more complex objects.

Today, the Am market is still tiny in comparison to the total manufacturing market, at around 0.3% of the more than $10 trillion market. In a new report from Bain & Company, titled ‘Five questions to shape a winning 3-D printing strategy’, the consulting firm explores the current benefits offered by 3-D printing and the market growth, as well as the barriers, of the technology  – together with its own key recommendations for companies.

AM Market potential
3D printing and AM technology provides a range of benefits over traditional manufacturing formats. Almost any shape or structure can be created, with few – outside scale – geometric constraints and little marginal costs. Certain structures, such as those resembling bamboo, lattice or trabeculae (thin columns of bone) – are simply not feasible with traditional manufacturing. Through AM, a whole new set of objects can be manufactured, including the printing of cell lines to create organs, as well as the printing of geometric forms that reduce the weight of, for instance, aircraft parts – in one instance saving 40% of the components' normal fuel cost.

The technology, in addition, provides considerable flexibility to the manufacturing process without inefficiencies – like offering a short setup time and lending itself to just-in-time production and low inventories. For the design and development of new parts, AM provides a “complexity for free” characteristic, offering a cost advantage for the development and creation of complex parts, especially for very complex parts with low volumes, as the technology creates not merely a cost advantage but also provides the possibility.

Market growth
The wide range of applications for AM, coupled with demand for new materials to solve a range of issues – such as aircraft weight and new biotech – has seen considerable growth within the industry in recent years. Between 2009 and 2013, the industry booked a CAGR of 30.2% as the market jumped from $1.1 billion to $3.1 billion. Between 2013 and 2016, the market is projected to increase to around $7 billion. Strong growth is set to continue, with the 3D printing market projected to increase significantly in the coming two years, jumping at an annualised rate of 33.6% to a total of $12.5 billion by 2018.

While the technology has considerable promise, a number of barrier remain for wide scale adoption within a range of businesses. The technology, as it stands, does not provide a means for scalable production – the machines themselves are relatively expansive, while the production rate per machine is limited by a range of factors – including material type. Traditional finishing is still required for many parts, which limits efficiency gains, production flexibility and lead time. Many of the materials used in the process are tightly controlled by machine OEMs, resulting in higher costs and lower flexibility. As it stands there are also no major standards or manufacturing guidelines as yet developed regarding the objects produced by AM. The final barrier cited by the consultancy is a lack of AM talent, particularly with regard to the creation of objects.

A number of these barriers, the consulting firm argues, will be overcome with advancement to the arena. Material costs are set to decrease as adoption increases and the market expands – while new laser technologies and machine designs may increase the potential for throughput. Standards are in the process of being developed, while increased demand for talent is likely to see businesses and design schools improve their focus on supporting adoption. Once customers demand better AM systems for lower prices, suppliers will innovate affordable solutions and patents will expire – and as a result the competitive advantage of 3D printing may reshape many industries.


UK manufacturing sees orders slow amid Brexit anxiety

11 April 2019 Consultancy.uk

Manufacturing in the UK saw negative growth for the end of 2018, reflecting a wider slowdown in the UK economy to 0.2% for the quarter, followed by three months at the start of 2019 which saw continued softening in orders. With uncertainty still hitting the sector ahead of Brexit’s deferred deadline, the industry faces a difficult 2019.

Despite a perpetually changing economic landscape, manufacturing remains a keystone industry in the UK. Optimism in the industry has been riding high in recent years, reflecting the perceived potential of automotive technologies, but last year saw a slight dip in business performance, ahead of what seems set to be a turbulent period for British manufacturing. Ordinarily, the sector might have expected to recover its footing relatively quickly, but with the looming spectre of Brexit making the economy’s future completely uncertain, this has not been the case.

The uncertainties of Brexit have continued to create headaches for companies on both sides of the channel. As contingency planning continues, new analysis from BDO and the Make UK explores how manufacturing – a segment likely to be hard hit by Brexit – has fared in the final quarter of 2018.

Output balance stable

Manufacturing remains a key industry in the UK, generating around 10% of total economic output and supporting around 2.7 million jobs. Yet while the industry has seen a number of years of strong optimism as well as demand, Brexit is set to throw a spanner in the works, with a range of manufacturing companies leaving the UK, or considering it. Indeed, UK manufacturing’s output currently sits at a 15-month low as the industry anticipates a cliff edge Brexit.

In terms of growth for various parts of the UK economy, a slowdown was noted in the final quarter of 2018 compared to Q4 2017. Manufacturing, in particular, saw growth declines coming in at almost -1%, with a similar trend in production. Construction saw a sharp contraction, falling 2 percentage points to below 0% growth in December 2018. Only services managed to have positive % growth in the final quarter. The final quarter as a whole saw growth of 0.2% in the UK economy – the lowest level in six years.

Output across most sectors in the industry remains positive, with the percentage balance of change in output at 22%. The result is the tension quarter of positive percentage balance of change, with stagnation on the final quarter of 2018. The firm is projecting a slight softening of output going into Q2 2019. The firm notes that there is some stockpiling taking place, with orders and outputs unaligned going into 2019.

Order balance remains positive but dips further

While there is a broadly positive picture for output, the firm does note considerable differences between subsectors. Basic metals for instance, saw a net 24% fall to -18% over the past three months. Metal production is also seeing relatively poor performance as demand from the automotive industry enters a period of acute uncertainty. However, most industries are to see improved output on balance, with rubber & plastic increasing from a net 11% to net 56%.

Export trade

Having been buoyed by the lowered value of the pound, UK export orders are up slightly on the previous quarter, but remain well below the most recent peak in Q3 2018. Domestic orders were relatively strong, with a year between the most recent peaks for the segment. However, Q2 2019 looks to see domestic orders fall sharply, to half Q1’s result, while export orders too are set to see declines.

The decline reflects a decrease in basic metals, possibly a reflection of changes affecting the auto industry. Meanwhile, export orders are down due to Brexit cross-border uncertainty – the effect of the sterling devaluation unable to continue to buoy the market. Basic metals and metal products are both in negative territory for the coming three months.

Investment and employment intentions

UK employment figures reached new milestones, with total unemployment down to 3.9% while participation rates hit record highs. Employment planning continues to be in net positive territory, with a net positive balance of 22% in Q1 2019. The coming months are projected to see a slight dip, again, largely resultant from uncertainties around Brexit. Basic metals is the sector most likely to see a negative trend, reflecting the expected decline in orders.

Investment intentions meanwhile continue to be in positive territory. However, again, the now acute uncertainty about Brexit – the UK government has boxed itself into a corner – mean that confidence around investment could wane rapidly.

Commenting on the wider economy, Peter Hemington, a Partner at BDO, said, “Manufacturing firms have been ramping up their preparations for a disorderly Brexit, in large part through the stockpiling of imported goods. This has had the effect of inflating activity levels… It’s too late to do anything about this now.  But a disorderly Brexit would be far worse than the current relatively mild slowdown, possibly disastrously so… We are concerned it looks more likely than ever that we will exit the EU without a deal.”