Additive Manufacturing Cost Drivers: 4 Key Considerations

Simon Fried

With Industry 4.0 in full swing, more manufacturers in a variety of industries are considering complementing their capabilities with additive manufacturing. If you’re thinking about participating in this new paradigm, you’ll need to know the primary additive manufacturing cost drivers. Let’s examine the four primary drivers of production costs associated with additive manufacturing.

Spur gears manufactured with a 3D printer

The 4 Primary Additive Manufacturing Cost Drivers

The cost drivers associated with additive manufacturing fall into four key areas: machine and tooling costs, labor, materials, and post-processing. Compared to traditional subtractive manufacturing and injection molding, additive manufacturing can help decrease production expenses in three of these critical areas.

Investment in Machinery and Tooling Costs

By far, the greatest additive manufacturing cost driver is the initial investment in production equipment. A recent study by the National Institute of Standards and Technology (NIST) estimates that initial machine costs account for 45 to 74% of the total cost to additively manufacture a product. Precision additive manufacturing equipment can be quite expensive to purchase and install, making the initial investment in machines the greatest driver of additive manufacturing costs.

Although the investment in additive manufacturing machinery is significant, Deloitte cites research showing that the tooling costs associated with this equipment are about 30% that of tooling for injection molding. Tooling expenses account for about 5% of the total production cost of additive manufacturing. In comparison, tooling for injection molding accounts for more than 90% of the total cost of a traditionally manufactured product. Part of this savings lies in the fact that the layer-by-layer printing process makes additive manufacturing equipment extremely adaptable to a broad range of products, whereas subtractive manufacturing tooling must be designed for each product.

Labor Costs

Compared to traditional manufacturing methods, labor costs involved in additive manufacturing account for a similar proportion of total costs. This is largely due to the highly automated nature of both methods. As a result, labor costs can be reduced through part simplification in both traditional and additive manufacturing. In essence, this involves redesigning a product so that the total number of parts to be produced is reduced, thus decreasing production, assembly, and post-processing costs. According to the aforementioned NIST study, labor costs involved in additive manufacturing account for less than 10% of overall production costs.

Materials Costs

Compared to metal ingots or plastics for injection molding, the materials for use in additive manufacturing processes can carry a significantly higher price. According to a 2015 study published by the International Cost Estimating and Analysis Association, the costs of additive manufacturing materials are higher than traditional manufacturing materials by up to a factor of 8 on a per-weight basis. The exact costs depend on a number of factors, including the additive process and the exact materials used during production.

Despite the higher per-weight costs for raw materials, parts produced with additive manufacturing have lower complexity, require less production time, and consume significantly less (up to 90%) raw materials overall. This offsets the high raw material costs—raw materials only account for anywhere from 18% to 30% of total production costs, on average. These costs are expected to decrease as more materials options enter the market.

Post-processing Costs

Any manufactured part will require some level of post-processing. With metal parts, this usually involves some polishing or washing process. With additively manufactured parts, especially those used in precision mechanical systems, this requires removing excess material and surface finishing. NIST found that post-processing costs account for 4 to 13% of overall production costs, depending on the exact process and materials involved. As with the labor cost example above, post-processing expenditures for both traditional and additively manufactured parts are inevitable and similar regardless of the method you choose.

The Business Case for Additive Manufacturing

Despite the cost drivers associated with additive manufacturing, there is one significant benefit: the time saved in producing prototypes and finished products. Although the initial investment can be steep, the time you save boosts productivity and allows traditional manufacturers to expand into new, profitable areas. The flexibility of additive manufacturing processes also gives designers greater freedom to focus on designing for functionality, rather than focusing on manufacturability.

Consider the case of Phytec, a family-owned German electronics manufacturing company. In their mission to produce touch and environmental sensors for IoT devices using an additive manufacturing system, Phytec was able to decrease their production time for PCB rework of a 0.5 mm pitch BGA by 97%, saving the company 34 days.

Phytec’s 3D-printed BGA module. The company offset additive manufacturing cost drivers by reducing production time.

Another excellent use case for additive manufacturing can be found in the aerospace industry. The F-18 Hornet fighter jet, which has been in service for more than 20 years, includes over 100 additively manufactured parts. On the civilian side, airline industry executives have found that the reduced weight of additively manufactured parts in airplanes saves millions of dollars on fuel costs annually. Northwest Airlines was able to save $440,000 on fuel costs for international flights by incorporating additively manufactured parts in their aircraft.

Innovation within the additive manufacturing space has allowed manufacturers to produce progressively more complex products with less waste and less time.

The equipment costs have been decreasing overall as well. NIST found that the average price for additive manufacturing systems has decreased by 51% between 2001 and 2011 after adjusting for inflation. As technology continues to advance, manufacturers in any industry should consider complementing their existing industrial processes with additive manufacturing.

In the electronics industry, additive manufacturing allows designers to create ever-more complex devices with exciting new form factors. The use of nanoparticle-conductive inks in a 3D printing process allows layer-by-layer printing of multilayer electronics devices for additional applications such as wireless sensors, wearable electronics, and IoT applications. The range of applications is only expected to expand as processing capabilities and systems evolve.

If you’re interested in streamlining your prototyping and production processes for advanced electronics, the DragonFly Pro additive manufacturing system is the solution for you. DragonFly Pro is engineered for layer-by-layer fabrication of printed electronics, allowing designers to create advanced, multilayer PCBs. Read a case study or contact us today to learn more.

Simon Fried

A co-founder of Nano Dimension, Simon Fried leads Nano Dimension’s USA activities and marketing for this revolutionary additive technology. With experience working in the US, Israel, and throughout Europe, he has held senior and advisory roles in start-ups in the solar power, medical device, and marketing sectors. Previously, Simon worked as a consultant on projects covering sales, marketing, and strategy across the automotive, financial, retail, FMCG, pharmaceutical, and telecom industries. He also worked at Oxford University researching investor and consumer risk and decision making.