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One way to calculate business value with AM

Lou Rassey CEO Fast Radius
By Lou Rassey CEO, Fast Radius

For years, companies have struggled to understand how additive manufacturing (AM) can add value to their businesses. This makes sense because for a long time, additive tech didn’t meet the threshold for producing industrial-grade parts.

But today, with advancements in production, materials and digital design, it’s safe to say we’ve entered a new era of manufacturing. Companies will derive value from AM if they are able to reframe their thinking and embrace new skills. This shift needs to happen on two fronts: First, understanding what’s possible in application design and production. And second, adopting new frameworks for calculating ROI.

AM unlocks a host of design and production options that aren’t available with legacy processes. At Fast Radius, we segment these product opportunities under four categories that we call additive archetypes:

1: Making the unmakeable

AM, when coupled with digital tools of design and simulation, lets engineers make parts that once seemed impossible. We’re now able to achieve complicated techniques, like lightweighting parts through lattice design or reducing assembly by printing multiple parts as a single unit. With this process, Fast Radius helped Steelcase design parts for its SILQ office chair, condensing the chair’s entire armrest from three parts into one. By employing lattices, we reduced material usage by up to 70% without sacrificing performance.

2: Mass personalization

AM doesn’t require physical molds for production, which means we can now produce single parts with unique modifiers on demand, no retooling required.

3: Virtual warehousing

Picture it: Instead of having to produce thousands of parts and then store them in a warehouse, waiting for someone to purchase them, you could make parts to meet real-time demand. Companies are starting to move toward this “virtual warehouse” model.

4: Faster product development

Now that additive technology and materials have reached industrial-grade levels, companies can produce prototypes that also function as end-use parts. Instead of taking weeks to make prototypes, additive lets companies get dozens of designs produced in the same amount of time. This can more than halve development timelines.

The additive archetypes demonstrate how AM creates value in application development. However, many companies still grapple with an incomplete set of factors to compare its ROI against legacy processes.

In the 1990s, we saw manufacturers making shortsighted decisions about outsourcing because they solely looked at labor cost arbitrage. They should have been considering total landed costs. “Hidden costs” torpedoed many budgets.

Today, companies are making similar mistakes when they choose to produce parts solely with legacy processes. To solve for this, Fast Radius took the culmination of the cost-saving and revenue-generating factors in the manufacturing process and combined them into a framework called the total value of additive (TVA).

Let’s say a firm is considering transitioning a part’s production to AM. If that firm looked at traditional factors like material costs alone, the case for AM would be weak. Have you calculated savings from avoiding retooling for modifications? Are you thinking about the value of getting to market faster? Have you considered what you’ll save in warehousing by manufacturing on demand? TVA combines all of these factors to give you a true calculation of additive’s ROI.

AM has entered a bold new era, moving into full-scale production. Those who immerse themselves in what’s possible will unlock enormous growth opportunities.

Shifting your thinking is good for more than the bottom line. Manufacturing is important not just for the things it makes but also for the things it makes possible for the world: products that connect, heal and power humanity. As manufacturers, we have a great responsibility to evolve so we can continue this critical pursuit.

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