3D Printing is the New Industrial Revolution?

With the deflation of the Social Media bubble, people have been asking us where the next bubble is going to be. One that is starting to froth is the "Makers" movement - ever since Chris Anderson's latest book, Makers*, the area has been rocketing up our Bubblewatch, overtaking Internet of Things and Quantified Self. The claims for this area are becoming truly hyperbolic - Chris Anderson in the Grauniad recently:

The nascent Maker movement offers a path to reboot manufacturing – not by returning to the giant factories of old, with their armies of employees, but by creating a new kind of manufacturing economy, one shaped more like the web itself: bottom-up, broadly distributed, and highly entrepreneurial. The image of a few smart people changing the world with little more than an internet connection and an idea increasingly describes manufacturing of the future, too.

It's almost a cliche that anyone with a sufficiently good software idea can create a fabulously successful company on the web. That's because there are practically no barriers preventing entry to entrepreneurship online: if you've got a laptop and a credit card, you're in business. Manufacturing has traditionally been regarded as something else entirely. But over the past few years, something remarkable has begun to happen. The process of making physical stuff has started to look more like the process of making digital stuff.

The problem with a "new kind of manufacturing, shaped more like the web" is that manufacturing "stuff" is a different game entirely, with very different economics in key areas that makes it very very different to Web software. Manufacturing economics is very well understood by those in manufacturing, but sadly seems to have been largely ignored by the prophets of this New New Thing. The key factors to keep in mind are the following:

- Raw Materials - cost money, and have lead times. There is nothing in Webworld like them
- Cost of production of product Numbers 2 to 2 billion is not zero. Its not like software, where a copy is just a "Save As" away. Making something takes large amounts of labour, material, machines, consumables, square footage and energy.
- Machinery and Methods - these vary hugely depending on the size, materials, complexity - and most critically, the volume required
- Stock (or Inventory, if you are American). You don't just press a button and off it goes over t'InterWebz. Ships, Trucks, Roads, Warehouses, Stores etc al are required to shift it from Maker to User

Now to be sure, some of the above applies to ICT products, but it is nothing like the scale of capital required and complexity in manufacturing systems.

To demonstrate, let me look at one example of the Maker Revolution, as it is the one that it is obligatory to quote - the 3D Printer. This is going to revolutionise manufacturing, apparently, by allowing grass roots Makers to produce their own stuff in the Rich West, so no longer do we have to buy mass produced goods from China and India et al.

Lets get very boring and look at the basics of production economics though. Firstly, the good old Product - Process matrix:



What this says is that the more commoditised an item is, the less you are able to price for value, and it is increasingly about lowest cost - which inevitably means mass production techniques, and it is always cheaper to run dedicated equipment flat out in lowest cost economies to make commodities. It also has a corollary - in order to make beautifully crafted or highly personalised artisanal work, you have to be able to charge added value prices to pay for the added costs. But there are limits to how many people will buy the high value (read: up-market) goods and how much they will pay.

So the Product/Process matrix predicts that 3D Printed goods will mainly be low volume, fairly high value goods. Value, of course, does not just mean "above average quality" - people will pay more for the item being available, here, now - or even just available. But there have always been two ways of ensuring something is "here, now" - to wit:

- "Make it here", and
- "Buy it in and stock it here"

The interplay here is between the cost differences of making it here via this 3D process, vs the cost of buying something made far more cheaply elsewhere and keeping it in stock, over here. This is an interplay between the higher cost of production here, vs higher costs of shipping something cheaper from elsewhere and storing it here. Suffice to say that the hollowing out of UK (and US) manufacturing from the 1990's onwards has been due to the costs of "importing and storing" being better than the cost of "making it here". Attractive though the idea of "low cost craftsmen" is, 3D printing is not per se a cheaper way of making something if you look at it as "just another producton device" - i.e. look at it in terms of it's setup time, run time per unit, % downtime, scrap levels - all that boring old fashioned Industrial Engineering stuff the new groovers hatez. It becomes clear then that the labour used has not got any cheaper, unless 3D printing shops are to rely on Freeconomic labour like Open Source (or Music) does these days, ie doing it for free while working or claiming benefits on someone else's ticket. These machines are no more reliable than any others (probably less as they are both early day machines and also very flexible) so will waste (expensive) labour in setup, downtime and maintenance, they will still need to sit in (expensive) real estate (it's not clear there is any great space saving either) and they will still consume (expensive, not bought in bulk) raw materials. The argument that 3D printers use less raw material only applies if you assume either that (i) material cost is a significant component of cost or (ii) your low cost competitor will not use the same 3D printers where appropriate, with their lower labour, land, and overhead costs, and not buy materials in bulk.

In other words, its not a slam dunk that just making it "here" vs "there" will yield an automatic advantage. Just ask the hundreds of British and US manufacturers who have gone to the wall in the last 20 years, or replaced in-country manufacture with out-country imports.

Then there is the "good enoughs" to deal with - you can lovingly craft a 3D printout of that item, but if I can make a "different-but-does-the same-job" similar item using different materials, and if mine is way cheaper for no discernable reduction in utility, I win.

The other challenge 3D printing has is that it is limited to one manufacturing process - deposition and (for metals) follow on sintering (now renamed as "additive manufacturing", I note...) - and currently only a small selection of plastics, resins and sintered metal powders are usable in 3D printing. Many products are made in other ways, of other materials, or of composite materials. Even products potentially made by these 3D materials may need to have them treated in different ways (for example, it is not enough to be able to make an aircraft turbine blade shape, as in this Economist article - you also have to be able to get the correct properties of the titanium for jet blade use, from pre and post working the metal. You do not want a turbine blade coming unstuck in midflight because a 3D printer-layered metal lattice does not have the strength of a properly formed one.

So in summary, yes, 3D Printing is a fascinating new technology, and will be highly effective in certain niches, and will surely get better over time - but it is not going to facilitate a "second industrial revolution" anytime soon, if ever - there is a vast arena of manufacturing processes it cannot do, materials it cannot work, and products it cannot make. There will remain a vast number of products it can make, but that can be made better/cheaper/faster in another way or place. My bet is the biggest medium term sales will be in areas where its damn difficult to get essential spare parts, for artisanal "uniques" where user involvement in design is a huge part of the value proposition, and in large manufacturing plants who will use some 3D printers as flexible and/or prototyping capacity (as with other CNC machines, the minute something is worth making in volume, you set up a dedicated production system of simpler and cheaper gear).

What is far more likely to facilitate any "second industrial revolution" is the increasing cost of "cheap" labour in those offshore countries, so the economics of making it in China plus long shipping lead times and logistics costs - ships, trucks and sheds - plus teaching your competitors how to copy your stuff, starts looking a lot worse an option than bringing it back home. That is what is driving the current "re-shoring" dynamic. And smart OECD States or regions may perhaps start looking at creating "bring it home" incentives in these straightened times....

*Anderson, you may remember, also proseletysed the Freeconomics concept, which we debunked. 3D Printing, like Freeconomics, is something with limited applicability and only works in certain environments, not a new paradigm shift. It is interesting to note that he has moved from editing Wired to making DiY Drones. I happen to think that is going to be a growth industry, but I would argue that it has little to do with new "Maker" style manufacturing economics and everything to do with mass production of cheap, small and light motors, batteries, GPS and other computing systems, which enable the "Internet of Flying Things", as we have discussed before.

Update - actually, DiY Drones are a good illustration of the limitations of the 3D printer and "maker" logic. There is very little on a Drone you would print rather than use another process, and many of its components need significant assembly as well (eg a motor or a PCB card), and they would cost a fortune to make as one-offs. A Drone also has a significant final assembly cost. Anderson's compamy is seling to the early adopter enthusiast today, who is selling his or her time for free to do the drone building - but I'd bet if this takes off - - they will be going for bulk manufacture and assembly of kits in low wage countries.