{"id":28385,"date":"2018-11-12T11:14:24","date_gmt":"2018-11-12T16:14:24","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/general-electrics-future-with-additive-manufacturing\/"},"modified":"2018-11-12T19:53:31","modified_gmt":"2018-11-13T00:53:31","slug":"general-electrics-future-with-additive-manufacturing","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/general-electrics-future-with-additive-manufacturing\/","title":{"rendered":"General Electric\u2019s Future with Additive Manufacturing"},"content":{"rendered":"

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The figure above shows the tradeoffs between speed, cost, and scope that operations managers have to grapple with when launching new products, but what if they could have it all? Additive manufacturing enables that by fundamentally changing the way products are made. Traditional manufacturing is subtractive\u2014a larger piece of raw material is shaped into a smaller finished product while 3-D printing is additive\u2014layers build on top of one another until the final product is complete. For complex products this saves time, reduces raw material costs, and allows for innovative designs.[1]<\/p>\n

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The trend of additive manufacturing is especially important for the industrial conglomerate of GE. GE has turned to 3D printing to accelerate product releases, improve performance, and reduce development spend. \u00a0For example, in the aviation division, GE has developed as many commercial engines in the past 15 years as the previous 50 years. In addition, GE\u2019s engines continue to lead the industry in performance, reliability and cost of ownership [2] and its most recent three engines have all incorporated components produced with additive manufacturing.[3] GE\u2019s latest propeller engine, the product with the highest usage of additive, consolidated 855 parts into 12 components which cut weight by 5%, improved fuel efficiency by 20%, and reduced production and assembly costs.[4] Additive manufacturing\u2019s benefits for GE go beyond the completed engine. The large size of engine components leads to expensive tooling that have a long manufacturing lead time. 3-D printing provides to ability to cut those costs by 10X and reduce lead time by 4X.[5]<\/p>\n

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GE values additive manufacturing and vertically integrated by spending over 1 billion USD on acquiring OEM manufactures.[6] After the acquisitions, the management team created a separate additive division to address the short term goals of developing next-gen technology, integrating with other GE businesses, and selling with the GE brand. GE noticed a gap in printing large parts and designed ATLAS, a novel machine with the largest build envelope ever offered.[7] The ability to print bigger parts enables GE to access previously untapped customers. GE is also incorporating complementary technologies such as industrial analytics and uninterrupted power supplies.[8] These features were originally designed for other businesses and allows GE Additive to further differentiate its machines. \u00a0Lastly, GE has utilized its sales expertise and created customer experience centers to showcase additive manufacturing\u2019s potential.[9] It also created AddWorks, a consultant service designed to drive value creation from design to full volume production.[10] These offerings provide the opportunity to capture more customers and gain a revenue stream beyond printers. It also solves a knowledge gap challenge within the industry. Cost advantages of additive come from novel designs that the technology enables. By providing the engineering horsepower, GE will allow customers to unlock the full potential of the technology. Overall, GE is working towards its medium term goal of consolidation to be a one stop shop for any application of additive manufacturing in advanced manufacturing.<\/p>\n

Despite the progress GE is making, there remain gaps. First is the intense capital investment required to purchase printers. GE is trying to address this issue by emphasizing the savings in production costs and highlighting financing through its capital business, but that does not solve the underlying issue.[11] The company is developing more capable machines and not focused affordable alternatives. GE risks losing market share to those who started with a lower price point and advanced capabilities from there. I would recommend that GE work on a low cost machine adapted for small to medium size business that is easy to setup and use. I would also bundle the machine with a low cost consulting services that will help the business develop applications. The second gap is the usage of additive within all of GE. GE is forcing each business unit to develop an adoption strategy for additive manufacturing in order to generate sales for its additive business.[12] This will require the additive branch to tailor incremental improvements for various GE application instead of working on breakthrough R&D. This leads to risk in being disrupted by others more focused on the latter. To alleviate this risk, I would allocate a set percentage of the additive team\u2019s R&D budget on long term technological innovations.<\/p>\n

As 2018 draws to a close, additive manufacturing at GE is facing two big questions. Does GE have enough cash to keep investing in additive before seeing returns? Is GE sacrificing too much of its competitive advantage as it begins to roll out machines and consulting services to the industry?<\/p>\n

(753 words)<\/p>\n

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[1] Choon Wee Joel Lim, Kim Quy Le, Qingyang Lu, and Chee How Wong, \u201cAn Overview of 3-D Printing in Manufacturing, Aerospace, and Automotive Industries,\u201d IEEE Potentials,\u00a0 July 2016, \u00a0 19, https:\/\/ieeexplore-ieee-org.ezp-prod1.hul.harvard.edu\/document\/7517429\/<\/a>, accessed November 2018<\/p>\n

[2] https:\/\/www.geaviation.com\/commercial\/engines, accessed November 2018<\/p>\n

[3] https:\/\/www.netl.doe.gov\/File%20Library\/Events\/2017\/utsr\/general\/Rogers.pdf, accessed November 2018<\/p>\n

[4] Alan Brown, \u201cCHAIN REACTION: WHY ADDITIVE MANUFACTURING IS ABOUT TO TRANSFORM THE SUPPLY CHAIN,\u201d Mechanical Engineering, Oct 2018, p. 33, http:\/\/web.a.ebscohost.com.ezp-prod1.hul.harvard.edu\/ehost\/pdfviewer\/pdfviewer?vid=5&sid=a268be3f-7ee3-48fb-9f56-e40ae271d99c%40sdc-v-sessmgr05, accessed November 2018<\/p>\n

[5] https:\/\/www.netl.doe.gov\/File%20Library\/Events\/2017\/utsr\/general\/Rogers.pdf, accessed November 2018<\/p>\n

[6] Kelly O\u2019Brien, \u201cGE looks to complete acquisition of Swedish 3D-printing company\u201d, Bizjournals, December 27, 2017, https:\/\/www.bizjournals.com\/boston\/news\/2017\/12\/27\/ge-looks-to-complete-acquisition-of-swedish-3d.html, accessed November 2018<\/p>\n

[7] https:\/\/www.ge.com\/additive\/additive-manufacturing\/machines\/project-atlas, accessed November 2018<\/p>\n

[8] https:\/\/www.ge.com\/additive\/ge-technology, accessed November 2018<\/p>\n

[9] https:\/\/www.ge.com\/additive\/customer-experience\/customer-experience-centers, accessed November 2018<\/p>\n

[10] https:\/\/www.ge.com\/additive\/additive-manufacturing\/addworks, accessed November 2018<\/p>\n

[11] https:\/\/www.ge.com\/additive\/ge-technology, accessed November 2018<\/p>\n

[12] \u201cGE 2017 Annual Report\u201d, p3, https:\/\/www.ge.com\/investor-relations\/sites\/default\/files\/GE_AR17.pdf, accessed November 2018<\/p>\n","protected":false},"excerpt":{"rendered":"

General Electric is utilizing additive manufacturing to reshape its products. 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