Identify the Value in an Enterprise-Wide Deployment of Additive - PowerPoint PPT Presentation

Identify the Value in an Enterprise-Wide Deployment of Additive Manufacturing Complex Electronic Instruments & Electrical Medical Devices Chris Krampitz, P.E. Stratasys Consulting Principal Consultant - Americas 1

Objectives  Identify industry challenges addressed by Additive Manufacturing (AM)  Define the potential benefits from enterprise-wide AM deployment  Explain approaches to identify and define enterprise-wide AM value 2

Section One Our Expertise 3

Stratasys at the forefront of digital manufacturing for over 25 years Industrial Machines Global AM Leadership Industrial AM Contract Manufacturer Deployment Innovation Deep Vertical Market Expertise  Over 1,200 granted  $696 MILLION in or pending AM revenue (2015) Technical & Commercial patents globally AM Solution Consulting Services  Over 150,000 Ecosystem systems sold  Over 30 technology Materials Development & leadership awards  Comprehensive ecosystem to AM Software facilitate the adoption and integration Prototyping Machines 4

Depth & expertise to address key obstacles in AM adoption & integration …to apply their expertise to capture the Team of technical & commercial people ready for deployment … maximum value from AM Advanced 3D Printing 3D Printing Design & Materials Technologies Simulation Post Testing & Regulations Inspection & Standards Processing Quality Supply Chain Strategic Management Management Management 5

Section Two Transformation in Product Realization Enabled by AM 6

Transformation in Product Commercialization Current State: Mass Production & Centralized Manufacturing Design for Economies Mass Product Manufacturing Production of Scale Distribution Emerging State: Mass Complexity & Distributed Manufacturing Distributed Design for Mass Economies Manufacturing Use Customization of Scope 7

Rise of Mass Complexity & Distributed Manufacturing Global AM installations are growing rapidly… …fueled by the growth in manufacturing # of installed machines $80,000 450,000 25,000 Expected 30% CAGR 2015 Distribution of Capacity 400,000 (USD million) U.S. 38% 20,000 N.A. 40% 350,000 $60,000 Germany 9% Europe 28% $30B 300,000 Japan 9% 15,000 APAC 27% 250,000 $40,000 China 9% 200,000 $ 9B 10,000 150,000 $ 8B $20,000 100,000 5,000 $ 10B 50,000 $ 11B Industrial Systems 0 0 $- 2008 2010 2012 2014 2016F 2018F 2020F 2022F 2012 2013 2014 2015 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F SOURCES: Wohler's Report 2016, MorganStanley, UL SOURCES: Wohler's Report 2016, MorganStanley, UL Manufacturing networks are allowing mass AM technology is fueling the creation of distributed complexity & better designs manufacturing networks Elements of the Manufacturing Network Independent 20K (2006) to 220K (2016) Designers (US) Innovation Platforms AM contract manufacturer on Development time for new Microfactories $425M (2008) to $3,574M (2015) average uploads & prints 120K designs is over 90% faster new designs per month SOURCES: Wohler’s Report 2016, BLS, UL SOURCES: Shapeways , Wohler’s Report 2015, PDMA, UL 8

AM is catalyzing changes in the conceptualization, design, and production processes (1 of 2) 1  Increases likelihood of product launch success Product  Increase customer loyalty Co-Development  AM prototypes to validate user requirements 2  Rapid identification of worthy product concepts Real-Time  Decreases market research costs Market Testing  AM pre- production prototypes to conduct “split testing” across markets 3  Selective specialization across target markets Optimal Market  Identify modularization across market segments Selection  AM used for small scale production in specialized markets 9

AM is catalyzing changes in the conceptualization, design, and production processes (2 of 2) 4  Rapidly identify product variants warranting large scale Production production across market segments Scale Up  AM used for production of complex parts and for manufacturing tooling 5  AM used to producing low turnover spare parts and to produce Maintenance & tooling for moderate turnover spare parts Sustainment Potential Benefits from AM Technology  Increase speed to market by over 50%  Increase part consolidating by over 20%  Decrease tooling costs by over 50%  Decrease unit total landed cost by over 15% 10

Section Three Market for Complex Instruments and Medical Devices 11

Complex Electronic Instruments & Medical Devices Electromedical Computer & Peripheral Electrical Equipment Navigation & Guidance Equipment Instruments Measurement of Electrical Fluid Flow Semiconductor & Components Batteries Signals Instrumentation High complexity, high value assemblies that must meet strict regulations and standards Irradiation Apparatus Analytical Laboratory 12

Key Trends in the Electronics Manufacturing Industry Increased Level of Outsourcing by OEM Cost Reductions Increased Complexity of Traditional Joint Outsourced Devices (e.g., smart and green) Electronic Development Design Manufacturing Manufacturing Manufacturing Service AM can help address the increased complexity in products, manufacturing, and supply chain to meet business goals Strategic Partnerships to Emphasis on Logistics for Acquire Competencies Rapid Delivery SOURCES: Infor, Euromonitor, RayMing Technology, Technavio, IPC, PwC, Cerasis, Stratasys Consulting 13

Key Issues in the U.S. Electronic Medical Device Segment … enterprise value, and new product introductions despite U.S. medical device industry has experienced a long term decreased in growth… substantial increases in R&D expense 2.5 300 2.09 250 CAGR (USD billions) 2 R&D Expense Revenues CAGR 3.7% 200 1.79 1.5 CAGR 10.5% Revenue 150 FDA Clearances 0.92 5.2% 1 100 50 0.5 0.83 Enterprise Value 0 0 What do you see as the biggest challenge for your How would you describe your company’s strategic business over the next 12 to 24 months? focus? Competition & price pressure Engineering/innovation led R&D Efficiency Sales led Regulations Competitive advantage Manufacturing led (% of Respondents) Supply chain risk (% of Respondents) Supply chain led Product launch 0% 10% 20% 30% 40% 50% 0% 10% 20% 30% 40% 50% 60% SOURCES: Evaluate Group, FDA, Forbes, Stratasys Consulting 14

AM can be a strategic element in addressing industry issues… Potential Decrease in Total Landed Cost from Potential Decrease in Time to Market from Using AM Using AM 23% 100% Estimated 20% Return Concept Proof of Engineering 30% FDA Review Traditional Cost 80% Concept & Design Development On Investment 60% 510(k): 3-5 months 10% 6-12 months 24-36 months 510(k): 0-9 months PMA: 12-24 months PMA: 9-36 months 15% 40% 3-7 years w/o AM 1% 6% 20% 1% 13% 1-4 years w/ AM 0% Life Cycle of Medical Device 18-24 months Patient Benefits: Health Provider Benefits: Manufacturer Benefits:    Diagnosis & therapy choice Improved clinical outcomes Decreased inventory costs    Patient specific medical devices Decreased procedure duration Efficient use of high-value material    New solutions to health issues Decreased total costs Increased productivity (COGS & assembly costs)  Faster time to market SOURCES: U.S. Census Bureau, Department of Commerce, US FDA, Stratasys Consulting 15

…but manufactures have capture only a dearth of the value from AM Manufacturers’ Obstacles to Adopting Additive Manufacturing 50 (% of Respondents) 40 Today’s Focus 30 20 10 0 Quality & Expertise Technology Multiple Material Application Printer Build volume Regulations cost material availability Identification speed AM applications make up only 0.01-0.05% of industry shipments SOURCES: PwC, EY, Department of Commerce, Stratasys Consulting 16

Key Considerations for Enterprise-Wide Deployment of Additive Manufacturing Technologies Deployment Model Key Considerations  Define clear business goals derived from business unit strategy Identify  Develop a digital manufacturing vision & strategy; have the end-goal in mind  Manage change; build momentum Deliver Validate  Build/acquire/borrow expertise & capacity at the right times in your plan  Mind quality and safety (standards and Create regulations) 17

Identify & validate the expected value from AM for new product introductions Product Improvement/Introduction Approach Strategic Plan Sensing & Discovery Portfolio of Opportunities Idea Generation Idea Collisions Select areas with high potential for large contributions towards business goals 18

Identify & validate the expected value from AM across the supply chain Supply Chain Improvement Approach Business Goals Inventory Portfolio of Opportunities Distribution Manufacturing Select areas with high potential for large contributions towards business goals 19

Section Four Case Studies 20