From the course: Additive Manufacturing for Business
The economics of additive manufacturing
From the course: Additive Manufacturing for Business
The economics of additive manufacturing
- We've been talking about the economics of additive manufacturing, and in doing so, we've been taking the perspective of the business. That is, we're thinking about ourselves as managers and trying to decide whether our company ought to invest in this technology and whether we'll see value for that. And that's appropriate. This course is about understanding the business value of additive manufacturing. But there's another discussion that we could have. In fact, it's one that we're probably all considering. And that is, should I buy one of these machines for myself? Now, that could come down to whether or not I think it's cool enough to invest in, but I could also be looking for a payback on that. And interestingly, there's some research in that space as well. One article that I've recently come across with came from Michigan Tech University, and those researchers actually explored this question. They did so by selecting 20 common household objects and then going online shopping for them. They identified both the lowest available cost and the average cost of those items online. They then calculated what it would cost to produce those using an additive manufacturing device that they purchased and assembled themselves. The question, of course, was what's the payback? Is there a return on investment? The findings were pretty surprising, at least to me. When we look at the average cost for those 20 items available online, it came in in total at about $1,943.33. When we looked at the lowest available cost, it was much lower, $312.03. The researchers then figured out what it would cost in terms of time and materials and energy to produce those items additively manufactured. That total came in at 25 hours and $18.11. The researchers then calculated a payback period for the additive manufacturing device itself. Using the average retail cost, that payback period was about four months. Using the lowest available retail cost, that payback period came in just around two years. In terms of ROI, they took the savings, the difference between the retail cost and the material and energy cost and used it to calculate a return on investment for the machine itself. When using the lower retail prices, that return on investment came in between 20 and 40%. When considering the higher average retail cost for those items using both three and five-year periods for the calculation, the return on investment came in excess of 200%. The researchers concluded that using additive manufacturing for simple plastic household components already represents an attractive financial investment for US households. With as little as a single day's printing time and accessing freely downloadable plans for those items, that is we don't have to design them ourselves, we can more than justify the cost of a simple additive manufacturing device. As these devices continue to improve in quality, cost and availability, it's reasonable to expect that the home use of additive manufacturing is going to grow.
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