PWC Says the Future of Spare Parts is Bright and Additive


Aya Bentur  

Siemens Additively Manufactured Gas Turbines

Earlier this year the consulting arm of PWC (PricewaterhouseCoopers, one of the Big Four auditors) released an interesting report examining 3D printing in the spare parts market. If you haven’t had a chance to read it, here are some crib notes highlighting the main points.

Spare parts range from the simple screw to complex parts composed of multiple components. Currently, when a specific part needs to be replaced, the company faces multiple factors to be considered: producing or buying the part? keeping stock of the part? In what quantities? How long is it worthwhile to carry the part? And so on. In the PWC report “The Future of Spare Parts is 3D”,  Dr Reinhard Geissbauer and colleagues write: “22% of the survey respondents said that more than 10% of the spare parts they keep in stock are obsolete or do not contribute positively to margins, and the majority of respondents believe that at least 3% of their spare parts stock loses money” (see below). When deciding to discontinue a part and no longer keep it in stock the company lowers the cost of inventory and yet this decision leads to longer lead times and lower service levels provided to the customers. In previous posts, we discussed additively manufactured spare parts, but this report which surveyed 38 German companies, adds some statistical data in this context.

PWC Report - How 3D Printing will Shrink the Supply Chain
Infographic above: How 3D printing will shrink the supply chain

Make to Order with AM – The Whole Story

“In the future we will not buy spare parts anymore, but data.” —Reiner Rohr of BASF SE is quoted by Strategy& survey in the PWC report.

The immediate benefits of 3D printed spare parts are manifold:

  • the cost of inventory is reduced as the number of spare parts held in inventory decreases
  • additive manufacturing allows the company to shift from make-to-stock to on-demand manufacturing, without affecting lead times
  • tooling changes can be quick and smooth with no interruptions to the production line that would cost time and money

However, the manufacturing benefits listed above do not represent the whole story. When taking into account the full supply chain and calculating the TCO (total cost of ownership) in implementing Additive Manufacturing, the company has even more to gain:

  • lower shipping costs by manufacturing parts where they’re needed
  • increase availability of parts, even obsolete ones
  • decrease the waiting time without increasing costs

The PWC report estimates that implementing 3D printing will ultimately provide companies with about 20% savings in total cost of ownership. This implies that German spare parts companies can save €3 billion annually and in addition, they can add to their top line by costlessly continuing to support parts that would have otherwise been discontinued. And there’s more: if we take into account the TCO and companies consider it at the design stage, thanks to the capabilities of Additive Manufacturing, parts can be (re-)designed with fewer components, which simplifies logistics and further lowers costs.

BMW Metal Spare Parts Production with Additive Manufacturing
BMW spare parts fresh from the printer
In-house or Outsourced?

Claus Emmelmann, CEO of LZN Laser Zentrum Nord GmbH which works closely with Airbus on 3D printing, was interviewed in the report and commented on the metal 3D printing market: ”In the near future, I see this market as mostly driven by the printing of spare parts. Hence, within five years we should see 3D printing gaining 10 percent of the market for spare parts.” The report emphasizes that this is a growing and profitable sector in the industry, expected to grow to €100 billion by 2025, and companies such as Mercedes Benz (below) and Siemens (up top) are already taking action. Brands are not looking to disrupt the ecosystem but they are moving towards an improved end to end process. It doesn’t necessarily mean the company needs to invest in AM machines, this is where a 3rd party provider can come in: the company can collaborate with a 3D printing service to produce the part, the company, in this case, holds a virtual inventory: files of data required to produce a part rather than the physical part itself. With virtual inventory, IP and control over production (the CAD file, manufacturing parameters, and material composition) need and can be protected to create a safe ecosystem (this is what we at LEO Lane do!)

Mercedes Benz Metal 3D printed Parts
A thermostat cover for a Mercedes Benz truck – Additively Manufactured in metal

The results of the PWC survey show that AM technology will have a significant impact on the spare parts market. The need for a smoother and faster supply chain is clear and with it comes the opportunity to reduce costs and increase efficiency. Spare parts companies can answer these needs while improving their own business. “3D printing of spare parts will revolutionize the spare parts business. On the one hand, it will change the use of materials and reduce waste in logistics. On the other, it will increase speed and flexibility.” —Michael Caspar, Caspar GmbH, Strategy& survey.

We’d love to hear your thoughts and impressions on the influence of AM on the spare parts supply chain, share your comments and suggestions below. For more inspiration and information follow us on Pinterest or subscribe to our newsletter for weekly updates.

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