Rethinking Procurement strategy – 5 principles that unlock the best value from 3D Print Manufacturing

It’s probably fair to say that most “education” out there about adopting 3D printing is centred on the technology and its applications. We’re now in an era, though, when more and more organisations are adopting additive manufacturing for increasingly large batch production requirements. As you move greater volumes of parts and/or product manufacturing over to 3D printing and your annual spend increases, it will become important that you build an appropriate procurement strategy – one that unlocks the true value of adopting the process. 

So, here are the five principles that buyers need to understand if your organisation is going to fully maximise the benefits from the strategic use of 3D print manufacturing.

In most manufacturing processes, injection moulding for example, producing more of a single part in one run is key to getting a lower cost per part, and therefore a lower price. For procurement the trade-off becomes price per part versus the cost of stockpiling what might be many months of actual requirement. To get the true part cost you need to consider the value of the money tied up in all that excess stock which could be sitting on your warehouse shelves for months on end.

With 3D print manufacturing and especially with technologies like HP MJF printing, that’s not the case.

As there’s very little setup time involved with 3D printing, and no expensive moulds that need to be created and then fitted before a production run, there are minimal start-up costs and no downtime for the machine that the print provider needs to amortise. The cost to the manufacturer of making the last part is practically the same as the price of the first.  Yes, you’ll likely be able to negotiate a lower price for a larger value order, but there’s often no cost benefit supporting that. At the same time, for the buyer, there’s now no reason to have money tied up in excess parts on the shelf. The “per part” cost of a 3d printed part is a much truer reflection of the actual total cost to the business.

The real variable cost in technologies such as MJF printing come from running the machines themselves in the most efficient manner possible. In every production run there is a volume of print space to fill. The more efficiently we fill that cube with parts, the lower the overall cost of the production run, and the more attractive the pricing we are able to offer overall.

Now, of course, every contract manufacturer will likely be handling multiple orders from multiple customers at the same time and so can “nest” the various parts together in each run to optimise each time.

But what if, as part of your procurement strategy, you planned for and had more control over that yourself? What if you had an array of parts, big and small, to optimise the production run?

This key concept of machine utilisation has the potential to unlock a completely different approach to your procurement strategy. In each order it actually makes more sense to order lots of different parts at the same time, rather than trying to maximise the volume of a single part and putting the excess on the shelf. It gives your print provider the best possible chance of maximising machine utilisation

Now, for example, you could order every part contained within a bigger product, based on how many of the finished product you want to build – sending each order direct to the production line as it arrives and holding only minimal additional buffer stock.

But understanding this principle, in fact, unlocks even more opportunities..

As soon as you let go of the notion of ordering large volumes of a single variant as the key to getting the best price, then consolidating what might have been separate orders with differing suppliers all into a single manufacturing agreement, and even a single order within that agreement, makes a ton of sense.

• Prototypes – rather than using a lower cost, lower resolution technique such as FDM, prototypes can be made cost effectively, right alongside anything else the business needs, potentially using the same process as the final product.
• Parts – parts for a wide variety of products, or indeed sets of parts needed to complete individual products, can all be made at the same time.
• Products – can be manufactured alongside everything else, and the more you can design in more printed parts, the better the pricing becomes. Small tweaks to the design can improve manufacturing efficiency, and even unique variants can be made based on component availability, just like Synetica does in this case study.
• Process – many customers also find additional applications for 3D printing as they look at their assembly line and other related business processes. Things like jigs, moulds, custom handlers etc. all become super quick and easy to make and incorporate into an overall agreement. A strategic, closer relationship with your 3D Print manufacturer potentially can also unlock their advice and consultancy to spot these opportunities. It certainly does if you work with us!

Adapting your 3D Printing procurement strategy by adopting these principles can only give you a more competitive edge as adoption of this technology continues to grow. And the more you consolidate the 4 P’s into a strategic agreement with a single manufacturer, the greater that competitive advantage becomes.

And, of course, it’s a win for your manufacturer too. The more ‘printed part’ variance in each order you are able to send them, the greater their production efficiency, passing on those efficiencies to you with keener pricing.

Procurement strategy for 3D Printing needs to evolve from the “one off” prototyping approach where it all started, and the high volume, low variance models of technologies, like injection moulding, that it inherited for production volume builds. 

Building a higher value and more strategic relationship between manufacturer and customer can create a depth and visibility into the two organisations that can unlock all sorts of other opportunities that come from a long term relationship. Maybe they are directly related to the “4 Ps”, or maybe it’s about supply chain, manufacturing or product strategy.  An increased use of additive manufacturing can even positively contribute towards reducing your carbon footprint.

It’s all part of the maturation of an industry, still only a decade or two in the making, and one we’re keen to take a lead in helping make happen.