As we look to a new year, it seems appropriate to think about the current state of the additive manufacturing industry, where it is headed and what future trends are on the horizon. And who better to speak to on such matters than global consulting firm McKinsey & Company. With a broad outlook on many industries and in depth knowledge of many organizations, businesses and institutions, the firm has a unique understanding of AM and how it fits into the global industrial framework.
We had the opportunity to speak to Joerg Bromberger, Director of Strategy & Operations at McKinsey & Company, about how the company’s interest in AM was born, how it is working with customers to drive adoption and how it perceives the next stage of evolution for AM industrialization. Not to give away too many spoilers, but an emerging trend that pops up—which will be crucial to AM’s continued growth—is intra-industry collaboration.
McKinsey, meet AM
McKinsey’s intersection with additive manufacturing began nearly a decade ago, when the company’s curiosity was piqued by some big 3D printing stories popping up in the media. “We started looking into additive manufacturing as an emerging topic back in 2012/13,” Bromberger tells us. “At that time, a number of our clients began asking us what the technology was about and we started looking into the markets and different industries associated with AM, looking at adoption rates to try and understand a bit better.”
The initial questions for McKinsey were centered on the potential timeline for the technology, what key drivers for adoption were, etc. “It was more like technology roadmapping for some of our senior clients at that time, and from there it has actually evolved into a very interesting topic for us.”
Today, McKinsey provides comprehensive support to its clients interested in learning more about and adopting additive manufacturing. “We help our clients along the entire journey. We have done a lot of introductory awareness workshops and we use our Digital Capability Center Network with locations in Aachen, Atlanta, Venice, Singapore and Bejing to showcase additive manufacturing applications,” Bromberger says. “We also help our clients understand how to look into business cases, how to find parts to print and how to get started. We’re also very much involved in later stages of the process when companies are further down the road.”
“We help our clients look at additive manufacturing, not necessarily just from a user perspective, but more from a player perspective. We have lots of clients that have identified additive as a very interesting market going forward as a new business opportunity. For example, we have clients that are very deep into materials that want to know how they can leverage their knowledge to provide tailored materials for the additive market. There are also companies that don’t know exactly where to go and how long long it will take to get to full adoption of AM. This is where we´re also closely collaborating with technology partners.”
A collaborative spirit
Key to McKinsey’s consulting role in the AM space is its partnerships. The company works with a range of technology partners and research institutes who provide vital technical insights and advice. Bromberger explains that these partnerships inform how it works with clients on choosing the right technologies, training teams, finding valuable business cases and establishing technology requirements across the entire production chain.
This is one aspect to McKinsey’s work in AM: it has also fostered a collaborative spirit amongst 3D printing companies that themselves offer consulting divisions. “We are seeing a lot of service providers in the market as well as machine manufacturers building up consultancies that can help end users identify parts for AM and business cases as well as train people.”
While it may be somewhat surprising to hear, McKinsey sees these consultancies as potential tech-partners for a few reasons. For one, the AM consulting services tend to cover very specific fields. For another, McKinsey works with them. “They are also open to collaborate and seek our advice,” Bromberger elaborates. “While more technical technology providers or tech consultancies tend to have access to the engineers, we have access to the C-suite and top management. So we create a kind of synergy and can bridge the adoption curve.”
The state of adoption
When asked about whether there is evidence of growing AM adoption, Bromberger is quick to say that the growth rate in the AM market has been steady. What is perhaps more interesting to consider however is where this growth is happening and what trends are discernible. He says: “Currently, most growth in the market is really fueled by new entrants. They’re growing quickly around all the established players. Considering that, I think the next big wave of adoption—if we manage to get to industrial production—doesn’t need to be everywhere, it needs to be in certain areas.”
An important question McKinsey has reckoned with when it comes to AM adoption is about the ideal business model. In other words, how businesses and organizations should think about integrating AM into their existing workflows or using it as a basis for a new production system.
“This is one of the key questions we get from our clients,” Bromberger says. “Basically, how do they manage the journey.” One place to start, he continues, is to create a small, centralized team within a company and give them the time and resources to start exploring the company’s ecosystem so they can really understand the needs of different business units. This will help potential adopters or new adopters to identify the first parts for AM and who to talk to to get started.
Another piece of advice for AM newcomers is to find a good collaborator. “We always encourage companies to start partnering and to try and understand the landscape of their own products and what can be printed using partners,” he says. “This approach limits the investment risk because if you buy equipment to print some parts and it ends up not being the right business case, you will be stuck with technologies that you might not need in the future. I’ve seen it work very well for OEMs to partner with qualified service providers on the first and second generation of parts and then gradually transfer knowledge to the OEM.”
Bromberger summarizes this strategy by laying out some key steps for newcomers to AM adoption. “This is the way we would go forward: start by exploring the landscape, then build partnerships and then transfer the knowledge gradually to your own company in line with what your vision is.” In other words, if you see AM as a major part of your production operations, it could be worthwhile to weigh the benefits of either bringing it all in house or working with a trusted third party.
“We will probably see a split in terms of companies where additive is not only critical to their business for competition but also will have a pretty large share of the overall production portfolio going forward. In these cases, you would probably be more likely to integrate it. But there are also industries, like electronics for example, where businesses could find trusted third parties to operate almost like micro factories for AM in existing plants. Because for some companies, AM might be a core technology to have, but the share of overall production is so low they would want to outsource it.”
There’s a logic to it
Central to adopting AM in a strategic, beneficial way is finding the right applications for it. It’s not every part in a manufacturer’s inventory that will benefit from being 3D printed, and finding the parts that will be valuable for AM can be a challenge. Bromberger and the team at McKinsey & Company help their customers to understand where AM will be most advantageous.
“I’m trying to convince people that there’s a certain logic behind the industry adoption,” he explains. “The killer application will always come when additive has an additional source of value that is being created. So the way we encourage our clients to think about it is to look for additional sources of value. The first is whether it will increase the performance of your parts. This is really what aerospace is drawing on by designing new parts. Another is clearly customization. Here, I think there are some industries that have really cracked the code, particularly medical and dental. Obsolescence is clearly an increasing problem, and we are seeing asset heavy industries explore additive for spare parts that are not supplied anymore.”
Ultimately, additive manufacturing adoption strategies must be focused on the value the technology adds. Of course, the nature and scale of this value is highly dependent on the business in question: what industry they work in, what types of parts they make or develop and what their goals are. McKinsey & Company is there to illuminate the path and guide them along their AM journey.