[3DPAM Summit Pittsburgh] 3D Printing and Vertical Integration

ORGANISATIONAL ADAPTATION: VERTICAL

INTEGRATION3D Printing & Additive Manufacturing Summit

Pittsburgh 4!6 June 2014

Prof. Thierry Rayna

Professor of Economics at Novancia Business School Paris

A"liate Professor at Imperial College London

Associate Editor of Int. J. of Manufacturing Technology and Management

[email protected], @ThierryRayna

3D Printing & Additive Manufacturing Research Group

RESEARCH FOCUSBusiness Models

Innovation Ecosystems

Strategies

Market Research & Forecasting

Intellectual Property Right Management

Economic Impact & Foresight

Public policies

VERTICAL INTEGRATION

OR

DISINTEGRATION?

UNDERSTANDING 3D PRINTING & AM

‘Additive’ adoption

1980 1990 2000 2010 2020 2030 2040

Adoption

2050

Rapid prototyping

Rapid Tooling

Direct manufacturing

Home fabrication

Rapid Prototyping

‘Historical’ use

Still of critical importance

Many new materials:

Fully functional prototypes

Gain of time

Simulated overmoulding

Actual colour and moving parts

Subtly blended coloursFinal product realism

Rapid ToolingSecond oldest use of AM

Appeared with heat#resistant prints

Aim: rapid production of casts and moulds used for mass#manufacturing

Advantages:

Cheaper $%100s vs %1000s&

Faster $hours vs weeks or months&

Faster and cheaper

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(Digital) Direct Manufacturing

Decreasing costs and increasing quality have enabled printing of end use part and products

Trigger for mass#customisation

No market is ever small enough $economies of one&

Nowadays, mainly parts and niche applications

Home/Local Fabrication

‘Ultimate’ stage of Additive Manufacturing

Relies on home 3D printers and local ‘print shops’

Home printing nowadays is a hobby

Still expensive and low quality

Recent advances on local manufacturing front $ASDA, La Poste, etc.&

3D PRINTING & BUSINESS MODELS

Business Model Components

Value PropositionProduct offeringService offeringPricing model

Value CaptureRevenue modelCost structure

Profit allocation

Value DeliveryDistribution Channels

Target market segments

Value Communication

Communication channelsEthos and story

Value CreationCore competencies

Key resourcesGovernance

Complementary assetsValue networks

Business Model Components

Value PropositionProduct offeringService offeringPricing model

Value CaptureRevenue modelCost structure

Profit allocation

Value DeliveryDistribution Channels

Target market segments

Value Communication

Communication channelsEthos and story

Value CreationCore competencies

Key resourcesGovernance

Complementary assetsValue networks

Value PropositionProduct offeringService offeringProduct offeringService offeringPricing model

Revenue modelCost structure

Profit allocation

Value CreationCore competencies

Complementary assets

Rapid prototypingRapid Tooling

Value PropositionValue Proposition

Revenue model

Profit allocation

Distribution ChannelsTarget market segmentsTarget market segments

Direct manufacturing Service offering

Target market segmentsTarget market segments

Value DeliveryDistribution Channels

Target market segments+/!

Value Capture+/!

+/!

Home fabrication

+/

+/!+/!+/+/+/

+/+/+/!

+/!

CommunicationCommunication channelsCommunication channelsCommunication channels

SO WHAT ABOUT INTEGRATION?

Design

Manufacturing

Distribution

Own MarketRelated Market New Market

Dynamic Integration

3D Printing = Pay As You Go!3D Printing = Pay As You Go!3D Printing = Pay As You Go!3D Printing = Pay As You Go!

EFFECT ON VERTICAL INTEGRATION

Vertical Integration?

Overall e'ect

Rapid Prototyping

Rapid Tooling

Direct Manufacturing

Home Fabrication

Greater integration

Greater integration

Ambiguous

Lower integration

VERTICAL INTEGRATION

Some Economic Considerations

Cost p.u.

Units

Direct manufacturingMass manufacturing

Small Large

Direct Manufacturing Mass Manufacturing

Rapid tooling +

Mass Manuf.

!Small series" !Large series"

!Medium series"

Units

Online 3D Platform

Direct contract

Self Printing

Most Economical Production?

Series

Online 3D Platform

Self Printing

Most Economical Production?

Number of series

Number of units

Direct contract

Self printing

Online 3DPrintingPlatforms

© Thierry Rayna 2014. Some rights reserved.Except where otherwise noted, this worked is licensed underhttp://creativecommons.org/licenses/by/4.0/

IS THE CONCEPT OF INTEGRATION

OBSOLETE?

Food for thoughts…

QUESTIONS? trayna@novancia.!@ThierryRayna