Costs, benefits, and adoption of additive manufacturing: a supply chain perspective

• Published in: International journal of advanced manufacturing technology 2016-07, Vol.85 (5-8), p.1857-1876
• Main Author: Thomas, Douglas
• Format: Article
• Language: English
• Subjects: Additive manufacturing; CAE) and Design; Computer-Aided Engineering (CAD; Costs; Disruption; Engineering; Industrial and Production Engineering; Mechanical Engineering; Media Management; Original Article; Production costs; Supply chains; Technology utilization; Trends; Upgrading; Value added
• ISSN: 0268-3768; 1433-3015
• DOI: 10.1007/s00170-015-7973-6

There are three primary aspects to the economics of additive manufacturing: measuring the value of goods produced, measuring the costs and benefits of using the technology, and estimating the adoption and diffusion of the technology. This paper provides an updated estimate of the value of goods produced. It then reviews the literature on additive manufacturing costs and identifies those instances in the literature where this technology is cost-effective. The paper then goes on to propose an approach for examining and understanding the societal costs and benefits of this technology both from a monetary viewpoint and a resource consumption viewpoint. The final section discusses the trends in the adoption of additive manufacturing. Globally, there is an estimated $667 million in value added produced using additive manufacturing, which equates to 0.01 % of total global manufacturing value added. US value added is estimated as $241 million. Current research on additive manufacturing costs reveals that it is cost-effective for manufacturing small batches with continued centralized production; however, with increased automation distributed production may become cost-effective. Due to the complexities of measuring additive manufacturing costs and data limitations, current studies are limited in their scope. Many of the current studies examine the production of single parts and those that examine assemblies tend not to examine supply chain effects such as inventory and transportation costs along with decreased risk to supply disruption. The additive manufacturing system and the material costs constitute a significant portion of an additive manufactured product; however, these costs are declining over time. The current trends in costs and benefits have resulted in this technology representing 0.02 % of the relevant manufacturing industries in the USA; however, as the costs of additive manufacturing systems decrease, this technology may become widely adopted and change the supplier, manufacturer, and consumer interactions. An examination in the adoption of additive manufacturing reveals that for this technology to exceed $4.4 billion in 2020, $16.0 billion in 2025, and $196.8 billion in 2035, it would need to deviate from its current trends of adoption.