AM reduces capital required for scale & scope

Additive manufacturing is an important technology innovation whose roots go back nearly three decades. Its importance is derived from its ability to break existing performance trade-offs in two fundamental ways. First, AM reduces the capital required to achieve economies of scale. Second, it increases flexibility and reduces the capital required to achieve scope.

Additive manufacturing is an important technology innovation whose roots go back nearly three decades. Its importance is derived from its ability to break existing performance trade-offs in two fundamental ways. First, AM reduces the capital required to achieve economies of scale. Second, it increases flexibility and reduces the capital required to achieve scope.

Capital versus scale: Considerations of minimum efficient scale shape the supply chain. AM has the potential to reduce the capital required to reach minimum efficient scale for production, thus lowering the barriers to entry to manufacturing for a given location.

Capital versus scope: Economies of scope influence how and what products can be made. The flexibility of AM facilitates an increase in the variety of products a unit of capital can produce, reducing the costs associated with production changeovers and customisation and/or the overall amount of capital required. Changing the capital versus scale relationship has the potential to impact how supply chains are configured, while changing the capital versus scope relationship has the potential to impact product designs. These impacts present companies with choices on how to deploy AM across their businesses.

Courtesy: “3D opportunity in the automotive industry: Additive manufacturing hits the road” report of Deloitte Services LP

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