Over the last several years, automotive manufacturers have seen increased demand for improved fuel economy, the use of lighter weight materials, and stricter emission regulations, all of which have contributed to higher costs [2]. On the manufacturing side, there are over 6,000 to 8,000 different parts in each new vehicle, and that number is rising as customers expect more personalization options [3]. For context, the cost of materials and direct labor account for a combined 68% of the cost of manufacturing a car [4]. With new car prices forecasted to remain flat in most global markets for the foreseeable future, automotive original equipment manufacturers (OEMs) have been desperately seeking new ways to cut costs while still remaining competitive and profitable [5]. Enter AM, which was initially used for prototyping and small batch production; however, recent technological advancements have led to mass production capability [1]. The figure below provides a non-exhaustive overview of which parts are currently manufactured using AM and which parts may potentially be in the future [6].<\/p>\n
<\/p>\n Volkswagen Forges Ahead <\/strong><\/p>\n Volkswagen (\u201cVW\u201d) is the world\u2019s largest automotive manufacturer, with over 10 million vehicles sold globally in 2017 [11]. The company is no stranger to AM; as a pioneer of the use of AM technology among automakers, Volkswagen debuted 3D printing at one of its manufacturing plants in Portugal in 2014 [7]. By 2017, the company was using seven 3D printers to mass produce more than 1,000 parts each year, cutting production costs on those parts by upwards of 97% [8].<\/p>\n In September 2018, Hewlett-Packard (\u201cHP\u201d) announced a groundbreaking metallic 3D printing technology which is 50 times more productive than other 3D printing techniques, delivering lower cost and higher quality products [9]. One day later, VW announced that it, in collaboration with HP and auto supplier GKN Powder Metallurgy, would be the first auto manufacturer to use the HP Metal Jet process, with the goal of producing 100,000 metal units per year using this technology in 2-3 years [10]. Key parts to be produced include highly customized tailgate lettering, gear knobs, and keys with personalized lettering for customers (see Figure 3 below) [10].<\/p>\n <\/p>\n <\/p>\n Compelling Case for Scale? <\/strong><\/p>\n While VW management has set short-term goals to incorporate this groundbreaking technology, the longer-term scale benefits remain to be seen. 100,000 units is a commendable goal in the short term, but it represents less than .0001% of the parts going into VW vehicles on an annual basis. Additionally, the parts produced by AM are niche accessories which are largely separate from the \u201cmeat\u201d of the production process. Management even concedes, \u201cComplete vehicle will probably not be manufactured by a 3D printer any time soon, but the number and size of parts from the 3D printer will increase significantly.\u201d [3].<\/p>\n In the long-run, AM could represent a significant cost-out opportunity for VW and its peers. However, in its current state as a fringe technology, and without concrete plans at the management level to scale meaningfully in the medium-term, there is no evidence to support the idea that VW\u2019s bottom line will be materially impacted by the use of AM.<\/p>\n <\/p>\n Charting Volkswagen\u2019s Path Forward <\/strong><\/p>\n For VW and its competitors who are serious about integrating AM into their manufacturing process and benefitting from the increased scale and dramatically reduced costs, partnerships with leading AM technology companies are crucial. In particular, targeted research partnerships with these companies are crucial \u2013 rather than seeking to apply the newest AM technologies to its manufacturing process, VW should work with its technology partners to specifically design solutions tailored to auto manufacturing. This approach would speed innovation and adoption and ultimately generate value for VW and its shareholders through decreased lead times, increased efficiency, and higher profitability.<\/p>\n As VW contends with these decisions, several questions remain. Can AM ever scale to a point where it will materially impact these companies\u2019 bottom line? If so, what will be the impact of increased AM adoption on VW\u2019s and other manufacturers\u2019 workforce? Finally, as the automotive production process continues to shift to a build-to-order model, can AM be adaptive enough to suit customers\u2019 increasing desires for personalized solutions?<\/p>\n <\/p>\n (Word Count: 781)<\/p>\n <\/p>\n Sources:<\/p>\n [1] Wright, Ian. \u201cAutomotive Additive Manufacturing Market to Reach $5.3 Billion by 2023.\u201d Engineering.com, 6 July 2018, www.engineering.com\/AdvancedManufacturing\/ArticleID\/17238\/Automotive-Additive-Manufacturing-Market-to-Reach-53-Billion-by-2023.aspx<\/a>, accessed November 2018.<\/p>\n [2] Weber, Austin. \u201cLightweighting Is Top Priority for Automotive Industry.\u201d\u00a0Assembly<\/em>, 7 June 2018, https:\/\/www.assemblymag.com\/articles\/94341-lightweighting-is-top-priority-for-automotive-industry<\/a>, accessed November 2018.<\/p>\n [3] Ready for Mass Production: Volkswagen Uses the Latest 3D Printing Process for Production. Volkswagen AG, 11 Sept. 2018, media.vw.com\/en-us\/releases\/1072<\/a>, accessed November 2018.<\/p>\n [4] \u201cCar Production Cost Breakdown as of 2015, by Segment.\u201d Statista, www.statista.com\/statistics\/744910\/cost-breakdown-of-car-production-by-segment\/<\/a>, accessed November 2018.<\/p>\n [5] The Road to 2020 and beyond: What\u2019s Driving the Global Automotive Industry? McKinsey & Co. , Sept. 2013, www.mckinsey.com\/~\/media\/mckinsey\/dotcom\/client_service\/ Automotive and Assembly\/PDFs\/McK_The_road_to_2020_and_beyond. ashx<\/a>, accessed November 2018.<\/p>\n [6] Giffi, Craig A., et al. 3D Opportunity for the Automotive Industry. Deloitte, 19 May 2014, www2.deloitte.com\/insights\/us\/en\/focus\/3d-opportunity\/additive-manufacturing-3d-opportunity-in-automotive.html<\/a>, accessed November 2018.<\/p>\n [7] 3D Printing Continues Making Inroads in Auto Industry. National Law Review, 13 Sept. 2018, www.natlawreview.com\/article\/3d-printing-continues-making-inroads-auto-industry<\/a>, accessed November 2018.<\/p>\n [8] O’Connor, Daniel. Can You Jig It? 3D Printing inside Volkswagen Autoeuropa. TCT Magazine, 22 Feb. 2018, www.tctmagazine.com\/can-you-jig-it-volkswagen-ultimaker-3d-printing\/<\/a>, accessed November 2018.<\/p>\n [9] HP Launches World’s Most Advanced Metals 3D Printing Technology for Mass Production to Accelerate 4th Industrial Revolution. The Hewlett-Packard Company, 10 Sept. 2018, press.ext.hp.com\/us\/en\/press-releases\/2018\/hp-launches-worlds-most-advanced-metals-3d-printing-technology.html<\/a>, accessed November 2018.<\/p>\n [10] Ready for Mass Production: Volkswagen Uses the Latest 3D Printing Process for Production. Volkswagen AG, 11 Sept. 2018, www.volkswagenag.com\/en\/news\/2018\/09\/volkswagen_3d_printing.html<\/a>, accessed November 2018.<\/p>\n [11] Porter, Sarah. Car Industry: Who’s the Biggest of Them All? BBC News, 14 Feb. 2018, www.bbc.com\/news\/business-43028005<\/a>, accessed November 2018.<\/p>\n![\"\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2018\/11\/Figure1-1.png\")
<\/a><\/strong>Figure 1: Deloitte University Press [6]<\/strong><\/p>\n<\/a>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Figure 2: HP\u2019s Metal Jet 3D Printers [12]\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Figure 3: Sample VW Part Using AM [12]<\/strong><\/p>\n