6 Ways 3D Printing Will Disrupt Manufacturing in the Next 5 Years ...

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Uwe Kylau, Kai Goerlich, and Robert L. Mitchell

6 Ways 3D Printing Will Disrupt Manufacturing in the Next 5 Years – and Beyond TODAY, IT’S EASY TO DISMISS 3D PRINTING AS A HOBBYIST’S OBSESSION. BUT IF YOU DON’T BEGIN CREATING A STRATEGY FOR HOW IT FITS INTO YOUR BUSINESS NOW, YOU COULD REGRET IT. HERE’S WHY.

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If you’re worried about the strength of a material or a part, don’t use it in an airplane. Sub-zero temperatures, 500-mile-an-hour (plus) winds, and shear forces that threaten to tear the plane apart at its weakest points are just some of the otherworldly stresses these multiton beasts face as they hurtle through the air, carrying their precious cargo. So why is Airbus planning to use parts made from a 3D printer – considered by most people today simply a hobbyist’s obsession – in the most crucial area of the plane, the wing? Because 3D printing allows Airbus to use designs that, a few years ago, airplane designers could only dream of, such as a wing structure design based on the strong, elegant, and lightweight natural design of a water lily that grows in the Amazon River. But replicating complex designs that have evolved in nature over millennia is just the beginning of the benefits of 3D printing, which itself has been quietly evolving over the past few decades to where it's ready for prime time. For example, the 3D-printed airframe parts will be up to 55% lighter than traditional parts, but they will be stronger. And they will be created with a new manufacturing process that consumes 90% less energy, uses 95% less raw material, and allows Airbus to consolidate components, as well as avoid tooling, cutting the number of production steps in half. “In 2017 we will print aluminum parts, in 2018 we will print things like spoilers, and in 2025 maybe an entire fuselage. We are going through the complete aircraft to see where else it makes sense to use 3D printing,” says Peter Sander, vice president, emerging technologies and concepts, for Airbus. Aerospace isn’t the only business jumping into 3D printing. Research firm Gartner predicts that by 2018, nearly 50% of manufacturers in the consumer products, heavy goods, and life sciences industries will be using 3D printing to produce parts for items they consume, sell, or service. Forecasts for the 3D printing industry are equally bullish.1,2

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Inquiry: 6 Ways 3D Printing Will Disrupt Manufacturing in the Next 5 Years – and Beyond

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A bigger impact than any manufacturing technology before it. 3D printing, also known as additive manufacturing, is still too slow and expensive to replace most conventional manufacturing applications (see “The gist of 3D printing”). However, as equipment and material costs continue to drop as throughput increases and as maximum build sizes expand over the next decade, 3D printing will expand dramatically. And it will disrupt virtually every aspect of manufacturing, from initial design to shop-floor setup and from manufacturing and assembly to supply chain, logistics, and distribution. “Additive manufacturing technology could very well have a larger impact on manufacturing than any other technology,” writes industry analyst and consultant Terry Wohlers in Wohlers Report 2014, a global study on the state of the 3D printing industry. ³ Manufacturers and suppliers up and down the value chain will be affected as the use of 3D printing expands over the next decade. As barriers to entry fall, smaller companies will challenge larger manufacturers with

new business models that create a competitive advantage. To counter that, larger manufacturers should start preparing now with a situational assessment: • Determine the drivers for 3D printing in your industry • Calculate the effects 3D printing could have on the supply chain, manufacturing, assembly, and other areas of the business • Decide which components will benefit from being redesigned to take full advantage of additive manufacturing approaches Not every manufacturing application will be a fit, but companies need to build a strategy, find the sweet spots, and begin exploiting 3D printing within their own unique business contexts before the industry begins changing around them.

The gist of 3D printing 3D printing uses an additive manufacturing process to produce the final product rather than traditional subtractive techniques, such as cutting, filing, or milling. The machines use several additive technologies, such as fusers or lasers, to create objects from glass, metal, plastic, ceramic, and even biological materials. The machines work from digital design files created using 3D modeling software, which cuts the design into slices that the printer can use to build the part, one layer at a time. While there are many variations of 3D printing, the three most common technologies are:

• Fused deposition modeling (FDM). FDM printers deploy a fuser to melt a plastic filament. The material is extruded through a nozzle and applied layer by layer to build the final product.

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• Selective laser sintering (SLS). SLS machines use a laser to sinter, or melt, successively applied layers of powdered build material. As each layer cools and solidifies, a new layer of powder is applied to build up the part. Build materials include metals such as aluminum and titanium, glass, plastic, and ceramic.


• Stereolithography (SLA). The SLA process uses an ultraviolet light guided by a set of mirrors and lenses to cure a liquid, photoactive polymer resin material. The laser traces the shape and hardens each layer to build the final product.

6 Ways 3D Printing Will Disrupt Manufacturing in the Next 5 Years – and Beyond

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RATIO OF 3D PRINTING IN MANUFACTURING PRODUCTION

HIGH

PRODUCT UPGRADES

COMPLEXITY REVOLUTION

Improve known products with better designs and materials

Radically new and complex designs with new features

Focus on component replacement in traditional designs; limited use in classical producution and logistics; high resource optimizatiopn in 3D components

Focus on radical changes of materials, products and use; mass customization becomes widespread; production at point of use; fundamentally changed logistics; new resource landscape

STAGNATION

DISPERSED PRODUCTION

Not going beyond design and prototyping

Some production moves closer to customers

Focus on incremental innovation; low customization; not used in classical production and logistics; low resource optimization

Focus on ﬁnding the right balance between classical production and 3D; customization focuses on supply chain optimization, not customers; increased resource optimization

6 LOW

CENTRALIZED

DECENTRALIZED

DEGREE OF MANUFACTURING AND SUPPLY CHAIN DECENTRALIZATION

SIX TRANSFORMATIVE FORCES

Here are six ways 3D printing will transform the manufacturing business.

1.

Innovation and product design cycles will accelerate

Because 3D printers require no up-front tooling and relatively little setup time, manufacturers can move from initial design to prototype to finished product more quickly than in the past. “It will change the cost of bringing new products to market,” says Andrew Blau, managing director, strategic risk solutions, at Deloitte & Touche. Production machines can switch between different parts as fast as operators can load a new 3D design file and feed in the raw materials, giving manufacturers unprecedented levels of agility and flexibility. The additive process enables the manufacture of highly complex parts that can’t be built using traditional techniques and reduces component counts by allowing complex assemblies to be manufactured as a single part, speeding assembly times and reducing labor costs. With conventional manufacturing of uniform parts, per-unit costs drop sharply as volume increases. However, costs for traditional manufacturing tend to rise sharply as the complexity of parts and products increases, while costs remain relatively flat for 3D printing.

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30%

10

25%

8

20%

6

15%

4

10%

2

5%

0

0 20

20

20

% on Global Trade

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19 20 20 20 21 20 22 20 23 20 24 20 25 20 26 20 27 20 28 20 29 20 30

35%

20 18

14

17

40%

16

16

20 15

Volume of 3D related Trade (on USD)

IMPACT OF 3D ON GLOBAL TRADE

Reduce prototyping time from weeks to days Once initial setup and tooling costs have been completed, the incremental cost to produce parts using conventional manufacturing processes is relatively low. For some items, such as a simple injection-molded plastic part, the cost per part with 3D printing may be 20 to 150 times more than conventional manufacturing methods at high volumes. But the cost to develop one-off prototypes, highly customized products, or lowvolume parts with 3D printers is far more economical because up-front tooling costs don’t exist. Traditional tooling also takes time, so product development iterations that currently take three months using conventional methods are reduced to days or hours with 3D printing. That makes prototyping a sweet spot for 3D printing. As a fail-early, fail-fast mindset takes hold, innovation and prototyping cycles will compress radically, and more prototype iterations will be created in less time. The result? Faster time to market with lighter, better-performing products that may cost less to manufacture. New products will be introduced more quickly, and existing products will see more frequent updates.

Who is using 3D printing today? In 2014, Gartner surveyed 330 individuals in organizations that are using or planning to use 3D printing and that employ 100 or more people. The study revealed that while prototyping, product innovation, and development are the main uses of 3D printing, the technology is also being used extensively in manufacturing applications. ⁴

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REASONS FOR PURSUING 3D PRINTING

Transformed Customer Experience/Service 4.2

Other 1.3

Cost Reduction 9.4

Prototyping 24.5

Improving Supply Chain Logostics 3.1 Improving Supply Chain Sourcing 3.4

Increased Efficiency 9.6

Developed Customized/ Personalized Products 8.0

Product Development 16.1

New Revenue Sources 4.8 Improved or Expanded Product Line 4.5

Innovation (Create New Items That Are Impossible Using Traditional Methods) 11.1

Small production runs become more economical 3D printing won’t play a role in mass-produced automobile components at Ford, where cycle times are measured in the seconds of traditional manufacturing rather than the hours typical of 3D printing. But over the next three years, the industry will adopt the technology in automobile production for vehicles where volumes fall under 10,000 units a year, such as high-end luxury and sports cars, says Wohlers.

2. Barriers to entry will drop Eliminating tooling costs and using the same machine to manufacture many different types of parts are lowering barriers to entry across many industries, enabling new competitors to enter markets with great speed and agility – and far less up-front investment. “You don’t need capital to invest in a factory to start manufacturing,” says Jarrod Bassan, senior consultant at CSC and author of the research paper 3D Printing and the Future of Manufacturing. ⁵

Small companies will become even more disruptive 3D printing won’t play a role in mass-produced automobile components at Ford, where cycle times are measured in the seconds of traditional manufacturing rather than the hours typical of 3D printing. But over the next three years, the industry will adopt the technology in automobile production for vehicles where volumes fall under 10,000 units a year, such as high-end luxury and sports cars, says Wohlers.

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ASSUMPTION VS. REALITY Assumption: 3D printers are the Easy-Bake Ovens and Erector sets of the ’10s: toys with little practical application.

Assumption: 3D printers will never replacetraditional manufacturing.

Assumption: 3D printers will have little impact on the supply chain.

Reality: GE Aviation has already created a 3D-printed part that consolidates 20 parts into one. It cuts down on assembly time and is five times more durable and 25% lighter than the parts it replaces.

Reality: By 2030, 3D printing will affect US$14 billion, or 35%, of global output.

Reality: Freed from traditional economies of scale constraints, manufacturing will move closer to customers and warehouses, and inventory will go virtual.

3.

Manufacturing and assembly will move closer to customers

With traditional manufacturing, production capacity must be consolidated and centralized in order to achieve economies of scale, amortize up-front tooling costs across large volumes of products, and produce uniform parts at the lowest possible cost. Initial setup costs are high, but the cost to produce each part is low – typically a fraction of the cost to produce a 3D-printed part. In the 3D printing economy, the need to amortize setup costs over large production runs disappears. Freed from traditional economies-of-scale constraints, manufacturing and assembly can move physically nearer to the customer and become more responsive to individual customer needs while reducing logistics costs and, potentially, carbon footprints. For some applications, design files and raw materials will be delivered to a local 3D printing service hub where the product is produced, to be picked up by customers in store or shipped to them directly. In other cases, some components may be shipped to local assembly depots, where 3D-printed components will be added the final product. The rise of distributed manufacturing through service bureaus that serve multiple manufacturers will enable these firms to buy materials in bulk, achieving economies of scale that will help to drive down costs of both additive manufacturing equipment and raw materials.

Radically reduce logistics costs Rather than building and shipping parts to assembly plants, some suppliers will begin installing 3D printers on the shop floor, shipping only raw materials for just-in-time fabrication at the point of assembly. Because raw materials consist of packaged pellets and powdered materials that are more compact than traditional raw materials, such as rolled steel, cargo shipment costs will go down. At the same time, fewer finished components will need to be shipped, which will also reduce costs. Any increase in energy prices that drives up cargo transportation costs will accelerate this trend toward distributed manufacturing.

Adding creates less waste than taking away Additive processing also creates less waste. “Today we need 300 tons of material to build 32 tons of parts,” says Airbus’s Sander. “With 3D printing, we only need 30 tons of metal powder.” (See “3D-printed spoiler demo is Airbus’s first step big step.”)

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In the 3D-printing economy, the need to amortize setup costs over large production runs disappears. Freed from traditional economies-of-scale constraints, manufacturing and assembly can move physically nearer to the customer and become more responsive to individual customer needs while reducing logistics costs and, potentially, carbon footprints. For some applications, design files and raw materials will be delivered to a local 3D-printing service hub where the product is produced, to be picked up by customers in store or shipped to them directly. In other cases, some components may be shipped to local assembly depots, where 3D-printed components will be added the final product. The rise of distributed manufacturing through service bureaus that serve multiple manufacturers will enable these firms to buy materials in bulk, achieving economies of scale that will help to drive down costs of both additive manufacturing equipment and raw materials.

Radically reduce logistics costs Rather than building and shipping parts to assembly plants, some suppliers will begin installing 3D printers on the shop floor, shipping only raw materials for just-in-time fabrication at the point of assembly. Because raw materials consist of packaged pellets and powdered materials that are more compact than traditional raw materials, such as rolled steel, cargo shipment costs will go down. At the same time, fewer finished components will need to be shipped, which will also reduce costs. Any increase in energy prices that drives up cargo transportation costs will accelerate this trend toward distributed manufacturing.

Adding creates less waste than taking away Additive processing also creates less waste. “Today we need 300 tons of material to build 32 tons of parts,” says Airbus’s Sander. “With 3D printing, we only need 30 tons of metal powder.” (See “3D-printed spoiler demo is Airbus’s first step big step.”)

3D-printed spoiler demo is Airbus’s first big step By taking advantage of additive design concepts, Airbus was able to use the natural structure of a water lily from the Amazon River as the model for an aircraft spoiler prototype that’s lighter, stronger, and less expensive to manufacture than its traditionally manufactured counterpart. “We are now using that to do prototyping on other aircraft structures,” says Peter Sander, vice president, emerging technology and concepts. The new spoiler may be in production by 2018, and airframes by 2025. The new process will reduce weight by 30%, lead time by 75%, and raw material by up to 95%.

Source: Airbus (2015)

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Retailers begin manufacturing in stores Meanwhile, local retailers, service bureaus, and manufacturer depots will also get into the act. Retailers are already experimenting with using 3D printers to fulfill customer orders for simple parts. In this scenario, only raw materials and the design file need to be shipped, bypassing traditional manufacturing, supplier, and distribution channels altogether.

A hybrid model will emerge Given the contrasting cost advantages between 3D printing and traditional manufacturing, each will have its place in the future. “Decentralization will occur only in cases where the products are fairly simple and don’t require a lot of assembly or finishing,” says Wohlers. Some, including Russ Rasmus, managing director, manufacturing, Accenture Strategy, think that a hybrid model will emerge, in which some components are centrally produced, with final customization added nearer to the customer.6 For example, the GE Aviation business will produce its new LEAP fuel nozzle from both 3D-printed and conventionally manufactured parts. For such applications, where mass customization trumps mass production, the new economies will “radically localize manufacturing as consumers interact more directly with each other and with manufacturers, some of which will act as printer hubs, offering services to anyone with a design to print,” write Irene Petrick and Timothy Simpson in their paper, “3D Printing Disrupts Manufacturing.”7

4. Production speed and quality will increase Because 3D printing gradually builds up a part in additive layers, designers can create very complex structures that are impossible to make with conventional, subtractive manufacturing processes. Suddenly, parts that had to be manufactured separately and welded or bolted together can be manufactured in one operation as a single part. GE Aviation has been consolidating parts like crazy with 3D printing, with the LEAP fuel nozzle being a prime example. “The part is five times more durable, 25% lighter than the parts it replaces, and consolidates 20 parts to 1, cutting down on assembly time,” says Tom Sinnett, applications manager in the Additive Development Center (see “GE consolidates 20 parts into 1”). At Airbus, designers were able to consolidate 126 parts held together with 80 rivets into 1 part. “We have no tooling to maintain, and we don’t have to stock 126 parts,” says Sander.

GE consolidates 20 parts into 1 GE Aviation, considered a leader in the adoption of 3D printing, made a splash last year when it announced its intention to use 3D printing to manufacture a fuel nozzle for its LEAP engine, which goes into production in 2015. That part consolidates 20 parts, is five times more durable, and is 25% lighter than its predecessor, says Tom Sinnett, applications manager in GE’s additive development center. But the company is also pushing forward with a wide range of other parts, including a combustor liner sector, used for testing. The part has thousands of tiny holes that normally would require computerized numerical control machining (see picture at right). “We were able to build them in the 3D-printing process to meet airflow requirements and significantly reduce manufacturing time and cost,” Sinnett says. The part, still in the prototype phase, costs half as much to produce as it would have through conventional methods.

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Source: General Electric (2015)


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5. Manufacturing skills will be redefined In traditional manufacturing, the most valued people on the shop floor are the tool and die makers. They combine the smarts of an engineer with the skilled hands of an artisan, often handcrafting the machines and molds used to make things. In the 3D world, the need for that hands-on artistry goes away. Computer design abilities will reign supreme, and continuous collaboration with manufacturing and end customers will rule the day. “Design talent is going to be a huge constraining factor for the adoption of 3D printing in manufacturing over the next 10 years,” says Mark Cotteleer, research director at Deloitte Services and author of a research report on the use of 3D printing in manufacturing.8 “You’ve got a whole new set of capabilities embedded in these technologies that require a departure from that traditional design mindset.”

Just-in-disaster manufacturing The Achilles’ heel of traditional manufacturing is its inability to respond to rapid changes in demand. This is where 3D printing comes in. With its potential to add new jobs, perhaps even new business models, 3D printing can become an adjunct to conventional manufacturing, says Cotteleer. It offers flex capacity to pick up the slack during an emergency or a demand surge that overwhelms traditional manufacturing capacity. “Yes, it’s more expensive, but the cost of using 3D printing for two weeks is nothing compared to shutting down the entire operation, which can cost tens of thousands of dollars an hour.”

6. Warehouses and inventory will go virtual Warehouse and inventory requirements will lessen due to the ability to produce low-volume parts on demand and in small quantities. “Manufacturers have tens or even hundreds of millions of dollars’ worth of inventory sitting in warehouses,” says Cotteleer. “3D printing will be used to work that down over the next 5 to 15 years.”

Design files will replace bolts Initially, manufacturers will 3D print only items that are ordered infrequently, such as spare parts. But as 3D-printing machines become faster and less expensive and as material quality continues to improve, the number of parts that will be created on demand using 3D printing will expand greatly. Increasingly, warehoused parts will be replaced by virtual inventories and design files that the manufacturer ships electronically to a local manufacturing depot, a service bureau, or even to a 3D printer in the customer’s home or business. “Spare parts and inventory are one of the areas that’s the most advanced right now because of the value of having 3D printers in remote locations,” says Rasmus. With 3D printing, no casts, molds, or other tooling equipment need to be inventoried for each part, and manufacturers will eliminate expensive minimum restocking order requirements.

The end of the 50-year part 3D printing isn’t coming, it’s already here. It’s a disruptive force that reduces barriers to entry, dramatically changes resource use from supply chain to factory floor, and enables new competition. 3D printing speeds time to market, consumes materials more efficiently, and could save manufacturers a boatload of money – especially in areas such as prototyping, customization, and low-volume production. Incumbent manufacturers have time to make decisions: the changes will take hold gradually over the next decade. But now is the time to begin building 3D-printing design and production expertise. “Advantage and opportunity will come to those who adapt early,” says Blau.

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3D printing won’t replace traditional manufacturing for applications where standardized parts need to be manufactured in high volumes and at the lowest possible cost – at least not any time soon. But manufacturers need to discover where 3D printing can be used to create new designs that are superior in some way, such as when consolidating parts counts or when creating a complex part that could only be produced using additive manufacturing techniques. But not every part is a good fit for 3D printing. Assessing parts in production with a printability index is key to determining where 3D printing offers the greatest business value for your organization, says Sunny Webb, senior R&D lead at Accenture Technology Labs. The implications of 3D printing go beyond just aerospace and a few other niche applications, says Sander. “It’s a step change. It’s a revolution. Every industry will be affected.”

How 3D manufacturing will affect the supply chain Hans Thalbauer, Senior Vice President, Extended Supply Chain at SAP 3D printers will affect the design and production of things in the future, but how will these changes affect the sourcing of materials needed to make those goods and the delivery of the final products? The future will support several scenarios. Integrated production In this scenario, 3D printing will be highly integrated in a more classical style of central production and associated supply chain. We might see the biggest impact on slow-moving inventory and service parts: 3D printing could reduce inventories to potentially zero and save resources and reduce weight through improved designs. It would be a moderate change for most existing supply chains. 3D-printer farms (think server farms) would help integrate 3D printing into production. The farms would result in more flexible, more decentralized supply chains on regional and local levels. Order and demand would be in real time, with a 24x7 maintenance model behind it.-

• Retail 3D-printer farms. The farms would be located in shopping

malls or retail locations. They would produce the stores’ products on demand, focusing on consumables and customized products, such as T-shirts and sunglasses. The supply chains would need to be very flexible and real-time oriented to cope with fast-changing consumer demand.

Consumer production In this scenario, individual, highly specialized 3D printers would be located at the point of purchase, in a localized fashion similar to Japan’s ubiquitous vending machines, which have even been spotted on remote mountaintops. Unlike the vending machines, however, the 3D printers won’t just dispense highly customized products, they’ll create them in near real time. The supply chain will reflect the strong need for real-time delivery, as well as an associated predictive maintenance model to keep the highly dispersed machines up and running. 3D printing will affect every type of supply chain, from reducing inventory in traditional manufacturing models to creating a new mode of sourcing and distribution in industries where customization and real-time delivery become the primary drivers. The common thread through all these scenarios is that supply chains will be more digitized, decentralized, resource optimized, and focused on real-time delivery than today’s supply chains.

• Outsourced

3D-printer farms. The 3D-printer farms would be managed by third parties, much as corporate IT infrastructures are today. The farms would create a certain set of products to order, covering a range of industrial goods and parts, with shorter production cycles and significantly reduced production costs and inventory. The supply chains would be more decentralized, with a strong focus on cost reduction. Real time could play a central role in some cases, as well.

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Uwe Kylau is a development expert at SAP, where he manages 3D-printing activities and workshops in SAP’s maker program, d-shop.

Kai Goerlich is Idea Director, Thought Leadership, at SAP.

Robert L. Mitchell is an independent writer and editor focusing on emerging technologies.

The authors gratefully acknowledge the help and guidance of Thomas Odenwald, Senior Vice President and Chief Strategist for Sustainability Strategies, SAP.

There’s more.

TO LEARN MORE ABOUT HOW COMPANIES ARE ADOPTING 3D PRINTING, DOWNLOAD THE EXPERT Q&A WHAT BUSINESS MODELS WILL EMERGE AROUND 3D PRINTING?

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1 Pete Basiliere and Zalak Shah, 3D Printer Market Survey Reveals Enterprise Demand Drivers for Technology, Printer and Vendor Decision Making (Gartner, November 11, 2014), https://www.gartner.com/ doc/2906317 2 Louis Columbus, “Roundup of 3D Printing Market Forecasts And Estimates, 2014,” Forbes, August 9, 2014, http://www.forbes.com/sites/ louiscolumbus/2014/08/09/roundup-of-3d-printing-market-forecastsand-estimates-2014/ 3 Terry Wholers, Wohlers Report 2014 (Wohlers Associates, 2014), http:// wohlersassociates.com/2014report.htm 4 Pete Basiliere and Zalak Shah, 3D Printer Market Survey Reveals Enterprise Demand Drivers. 5 “3D Printing and the Future of Manufacturing,” Computer Sciences Corp., accessed April 16, 2015, http://www.csc.com/innovation/ insights/92142-3d_printing_and_the_future_of_manufacturing 6 3D Printing’s Disruptive Potential (Accenture, September 26, 2014), http://www.accenture.com/us-en/Pages/insight-potential-3d-printingaccenture.aspx 7 Irene J. Petrick and Timothy W. Simpson, “3D Printing Disrupts Manufacturing: How Economies of One Create New Rules of Competition,” Research-Technology Management (November– December 2013), http://strategic-technology-roadmapping.com/pdfs/ Economies_of_One.pdf 8 Jeff Crane, Ryan Crestani, Mark Cotteleer, 3D Opportunity for EndUse Products: Additive Manufacturing Builds a Better Future (Deloitte University Press, October 16, 2014), http://dupress.com/articles/3dprinting-end-use-products/

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