Adding Additive to Your Shop

The ups, and possible downs, of additive manufacturing make the technology unique

Additive manufacturing (AM) is one of the most exciting and interesting technological advances that we have seen in the manufacturing industry for a very long time. What’s even more interesting is how manufacturers are using this technology in their shop to make parts and turn a profit.

In many respects, the ability for a laser to create a finished part out of plastic has been around for a very long time. When I was working as a machine tool distributor in the early ’90s, we began working with a manufacturer of stereolithography equipment -- a process for creating 3-D objects in which a computer-controlled laser builds up the required structure, layer by layer, from a liquid polymer that hardens on contact with laser light.

At that time these machines were quite limited in capacity as well as speed. They could produce a plastic model that could fit on a chess board, but it would take the better part of two days.

A large capital cost was associated with these machines, upwards of $500,000, which made it difficult for many shops to justify the cost of what was essentially a plastic model-making machine. We did, however, manage to sell a few units to Tier 1 suppliers for the aerospace and automotive industries.

These shops were well-established machine shops generating plastic models for prototypes, and they saved a lot of time and money in the design phase by not creating the parts out of metal first. This justified the cost of the machine.

Next-gen AM

Now here we are more than 20 years later, and I recently financed a package of used additive machines for a very good customer, coincidentally built by the same company we had represented all those years ago, but the cost of these machines are now a fraction of what they were.

Today the technology is referred to as rapid prototyping, which is loosely defined as a group of techniques used to quickly fabricate a scale model of a physical part or assembly using 3-D CAD data.

The cost/benefit justification was an easy one for my customer. First, like for all new technologies, the cost of the machines, both new and used, has decreased dramatically.  Next, the company was preparing to quote a job for a Tier 1 automotive supplier, and normally this includes the manufacture of a prototype part in metal. The manufacture and machining of a few different dies would cost at least $30,000.

By making the part using AM, my customer’s cost became just a few thousand dollars, and they can make as many changes as they need to get the part to its final design. This, in turn, is how to win business.

Buzz or Boon?

With all that said, what the industry is buzzing about is that the only main difference between model-making machines and new industrial equipment is the latter’s ability to use metal powder and construct metal parts.

The cost for these metal additive machines, however, is significant, in most cases starting in excess of $600,000.

We are pretty much back to where we were in the ’90s with a new and exciting technology with a limited customer base. This customer must generate enough revenue to justify pulling money from its working capital to buy outright, or have financial statements that are strong enough to get approved for financing.

So the question really becomes who are the best types of customers for these machines, and what type of work are thee machines best suited to manufacture?

According to Mark Kirby, additive manufacturing business manager for Renishaw Canada, the ability of these machines can’t be measured by their capabilities because in reality the only limitation is their work envelope.

One of the uses of this new technology is at the design stage. An OEM or a company that purchases the equipment should have significant influence on part design.

It also has to be open to creating parts outside of a conventional machine tool and traditional manufacturing methods.

An AM Example

One of Renishaw’s customers recently used AM technology during the design of a new jet fuel regulator for a large aerospace engine manufacturer. The new additive technology ultimately allowed the design engineers to create a part that not only was stronger and had a longer lifespan, but was lighter, which led to higher performance with lower fuel consumption, said Kirby.

This application had the perfect confluence of factors that made it a great candidate for AM.  First, the part required an internal passageway, which is a feature notoriously difficult to produce with a standard machine tool. Second, the manufacturer controlled the part design, and third, it had the financial ability to purchase the equipment. Most important, though, the manufacturer’s customer was fully prepared to purchase the part at a premium price. All of this put together justified the capital purchase.

When I think about purchasing equipment, I always reflect on the first machinery auction I attended with my grandfather. He was bidding on an old machining centre, which I actually think was one he had originally sold new to a customer.

While he wasn’t the only interested party, the old man, known to be rather tight with a buck, kept on bidding until he got the machine. I even thought he was getting run up, but he never flinched.

After the sale I asked him about it and he said something that I have never forgotten to this day.

“Kenny,” he said, “the cost of the machine is only relevant when compared to what I can sell it for.”

He then proceeded to pull out of his briefcase a purchase order, which had been negotiated prior to the auction. It was for about double what he had paid for the machine.

The lesson is this: There is no doubt that investing in new equipment is a costly exercise whether you are using your own money or funds from your chosen lender. But what is often lost in the exercise is comparing the capital cost against the actual revenue you would then be capable of generating.

It is only then that an informed decision can be made as to whether the equipment, new technology or otherwise, is worth the cost.

Ken Hurwitz is senior account manager, Blue Chip Leasing Corp., 416-614-5878, www.bluechipleasing.com.

About the Author
Equilease

Ken Hurwitz

Vice-President

41 Scarsdale Road Unit 5

Toronto, M3B2R2 Canada

416-499-2449

Ken Hurwitz is the Vice-President of Equilease Corp.