3D printing’s impact ranges from incremental capability and finance improvements to radically new customer value propositions. Astute managers and technology planners use business models to assess the impacts and prepare their organization for the threats and opportunities brought on by 3D printing.
Gartner predicts that by 2021, 40% of manufacturing enterprises will establish 3D printing centers of excellence. Why? Once limited to a handful of materials, current 3D printers work with plastics, ceramics, glass, composites, hybrids, biomaterials and metals. The objects can be used as a prototype; a tool, jig or fixture used in a manufacturing process; or a finished good, usually after machining or other treatment to get a desired finish or precision. These uses drive new value propositions for customers (e.g., more personalized or customized goods) and financial impacts (e.g., radically reduced cost of goods) that can impact an organization’s business model.
No doubt, you have heard the term and even use “business model” in meetings to justify a request. But can you recite your organization’s formal business model?
Gartner defines a business model as a construct that describes how an organization creates, delivers and captures value. It is a simple, powerful tool for understanding how the enterprise works at a fundamental level. When well-defined and widely understood, a business model provides insight into potential directions for market and organizational change, assessing the scope and impact of the changes, and informing strategies to address and take advantage of them.
For example, planners can use business models to illustrate how 3D printing meets the needs of customers who want small quantities of custom goods. They can also use business models to create new market opportunities to supply what customers want, when and where they want it.
So what are the impacts of 3D printing on business models?
- 3D printing enables a shift from designing for ideal manufacturing to manufacturing the ideal design. Historically, products were designed to be made with high efficiency and low cost, hence, every customer received the same thing as every other customer did. 3D printing changes the classical ROI equation — now very short runs, all the way down to quantities of one piece per order, are practical and cost-effective.
- 3D printing can have a beneficial impact on finances by cutting production, inventory and manufacturing costs. Enterprise-class 3D printers are available for a wide and growing range of providers, who are offering improved performance at lower cost. For example, Admatec, Desktop Metal, Formlabs and Markforged have introduced 3D printers that work with metals or ceramics in an office environment.
- 3D printing can enable new value propositions that transform existing and facilitate new customer relationships. Most organizations, in an effort to assure their value proposition and therefore their customers’ expectations are met, have standardized their offerings to a fault. Such risk avoidance leads to lowest common denominator products, where, to paraphrase Henry Ford, every customer gets the same thing as long as it is black. 3D printing transforms customer relationships from “product push” by marketing to new on-demand “product pull” models. Customer relationships become more agile with 3D printing as they call for on-demand solutions tailored to their exact specifications.
- 3D printing can not only deliver immediate benefits to existing manufacturing business models, but also be a disruptive technology that enables radically new business models such as mass customization. 3D printing can enable low-volume, on-demand, customized production near the point of use. 3D printing also creates a competitive threat if the competition sees additive manufacturing’s potential and acts on it, and your clients switch to their 3D printed offerings.
Prepare for business model change from 3D printing and collaborate with your management and peers to phase in changes by analyzing its impacts on your business model.
My research report, including a table comparing the additive and conventional manufacturing processes, may be accessed here: The IT Impact of 3D Printing on Business Models
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