Additive manufacturing to change the existing spare-parts business fundamentally
Spare parts are important to industries such as automotive because they promise higher margins than original car sales. Unfortunately, spare parts can also be a burden for OEMs providing parts for aging equipment that has not been produced for a long time but is still operational. This often results in the nonavailability of critical spare parts, since they’re not stored and need to be manufactured. Some OEMs therefore even refrain from storing or producing these parts because it is too costly, but with negative impact on their relationship with customers. In addition, manufacturing spare current parts can interfere with the production of finished goods, such as machinery, because they need to be integrated into the production process. How can this tradeoff be managed?
Substitution of physical spare-parts delivery by selling copyrights
It comes as no surprise that more OEMs are approaching additive manufacturing as an alternative source of spare parts. 3D-printed parts are a game-changer, especially when it comes to the provision of low-volume, complex high-volume and high-performance parts. Furthermore, it can make the production of spare parts (e.g., for machinery that has well-exceeded its lifecycle) technically and commercially feasible.
For OEMs, the business model will change. They will sell the copyright to use a 3D model of the spare part in scope to their customers instead of producing and shipping spare parts.
The benefits of this new business model are obvious:
- No interference of spare-parts production with finished goods manufacturing
- Reduction of transportation costs because spare parts are printed at customer sites or a nearby 3D printing service provider
- Reduction of inventory on provider and customer sides due to on-demand manufacturing
- No cost for manufacturing tools, and higher flexibility in spare-parts manufacturing
- Since 3D models can be easily updated, spare-parts changes can be quickly incorporated at minimal cost
- Avoidance of overproduction, i.e., because of commercial reasons often more parts are manufactured and stored than would be demanded by customers
Furthermore, the availability of customer equipment is increased based on reduced lead times for spare part provision. This is supported by the example of the US Airforce. The planes in service have an average age of 28 years, which adds to the complexity of spare parts ‘provision. By employing additive manufacturing, the US Airforce could reduce the average acquisition time of a spare part from 1 year to 1 day!
Spare parts are important to industries such as automotive because they promise higher margins than original car sales. Unfortunately, spare parts can also be a burden for OEMs providing parts for aging equipment that has not been produced for a long time but is still operational. This often results in the nonavailability of critical spare parts, since they’re not stored and need to be manufactured.
Three feasible business models
At Atos we have identified three alternative models of how spare parts can be provided in the future:
- The OEM implements 3D-printer capacities at customer sites and prints the parts based on customer demand
- The customer will procure spare parts from nearby printing service providers that have OEM printing rights and will deliver over short distances
- The customer invests in its own additive manufacturing capacities, obtains OEM printing rights and prints the parts in its own facilities
The implementation of each model creates challenges for the OEM and customer. The OEM needs to manage an additive manufacturing network that integrates with customers and 3D-printing service providers. OEM also needs to assure that its intellectual property in the parts is protected. And, important especially in industries like automotive and aerospace, the (certified) quality of the parts printed needs to be assured.
Additive manufacturing platforms such as Atos AIP manage the complete additive manufacturing network, integrating all parties and their printing capacities, managing spare-parts orders and protecting intellectual property rights by employing technologies such as blockchain. Real-time data analytics provides porosity analysis, and anomaly detection assures the quality needed to fulfill industry standards. Clients are increasingly embracing these technologies to achieve a balance between the cost of the spare parts, lead time and the number of parts that must be kept in stock.
Additive macturing will not completely substitute the spare parts business as we know it today. The delivery of mass-produced parts for example will remain unchanged. Thus, the spare parts business of the future will be a hybrid one — a combination of additive manufacturing and holding parts in inventory.