DB FPX 8415 Assessment 2 Industry Gap in Practice Executive Briefing

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Capella university

DB-FPX 8415 Strategic Decision Making

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Date

Part 1: Executive Summary

In this analysis, our key findings were:

Insurability

Liability and risk have not yet been fully defined to ensure products, ideas, or transfer of liability if modifications are made by another company to our designs.

Digital Business Models

Few companies have successfully developed a fully digital business model around 3D printing and additive manufacturing. Integrating this type of business model into existing traditional models proves challenging, given the significant differences between digital and traditional manufacturing in various aspects of business development.

Technological Legal Rights and Ramifications

Laws protecting the rights and regulations of products and designs are not yet fully established. Liability, risk, and digital ramifications are still underdeveloped, creating gaps in legal precedence surrounding 3D printing and additive manufacturing.

According to a recent additive manufacturing trend report by Hubs.com, a Protolabs company, the global 3D market grew by 21 percent in 2020 compared to 2019, reaching an estimated $12.6 billion industry, while many traditional manufacturing processes were negatively impacted by COVID-19 and its effects on global production and transportation.

It is expected that the additive manufacturing market will more than double in size over the next five years, making its market value over $37 billion, with more than 73% of engineered businesses producing or sourcing 3D printed parts or materials.

This was confirmed in the GE Additive interview in 2018, with companies like Carbon and Adidas utilizing 3D printing to alter traditional business models and employ new processes to provide cleaner, cheaper, and more individualized products for consumers.

Part 2: Industry Context

According to Kapetaniou et al. (2017), automation technologies like 3D printing are causing drastic changes in how traditional business models are prepared in terms of marketing, resources, supply chain, sustainability, and product development.

With additive materials such as the ability to utilize different polymers, metals, etc., the 3D printing evolution has grown so rapidly that now things like the tiniest plastic part of an airplane can be created to an entire house. According to a lecture by Martens in 2020, the ramifications of this new ability to create endless production capabilities now allow for cheaper, domestic products but come with previously unconceived issues that we must now or in the future contend with.

The widespread adoption of 3D printing by large corporations now gives the availability of individualized products and the ability for companies to decrease expensive mass production and develop a compromise between the two. The GE Additive in 2018 gives the example that instead of Adidas mass-producing 4 million shoes and then putting tons of marketing and money behind that shoe, they can now print a shoe on order and ship it to the consumer, which is inevitably cheaper for a better product.

The Age of 3D Printing

• $10.9 Billion in Market Value increase since 2014
• 1983: Invention of SLA => 3D Printing
• 1987: Invention of SLS => EOS
• 1989: Invention of FDM Stratasys
• 2005: Desktop 3D printing movement
• 2007: Rise of 3DP service bureaus
• 2009-2011: Rise of consumer 3D printing
• 2012-2013: Mass accessibility of 3D printing hubs
• 2013-2015: Widespread adoption of plastic 3DP for tooling, jigs & fixtures
• 2015-2016: Widespread adoption of metal 3DP in high-tech industries
• 2016-2018: Plastic 3DP for low-volume end-part production
• 2018-Present: Widespread adoption of plastic low-volume end-part production
• Adoption of advanced customization
• Multi-market adaptability

Part 3: Industry Gaps in Practice

Industry Gap #1: Insurability

Current State of Practice

According to Fauer and Li (2020), insurability has become a significant gap with the recent increase in 3D printing. For instance, with the 3D printing of a house, one of the criteria for insurability is usually the materials used, which may require different insurability due to varying weather conditions and climates. With some of the polymers or other materials used in home 3D printing, there isn’t enough longitudinal data to support or deny their resilience to certain climates, making it difficult to insure. Another example is the automotive industry, which saw a huge uptick in 3D printing parts in 2013-2015. If a 3D printed part fails, liability becomes complex, involving the manufacturer, the designer, or the automotive team using these parts. This also determines what type of insurance is needed.

Desired State of Performance

Clear-cut insurability for each type of polymer and material used in 3D printing with appropriate liability definitions so all parties involved in development, manufacturing, and utilization of these materials understand their risk and liability in the process.

Gap in Practice

According to Fauer and Li (2020), risk is insurable if it can be measured and liability can be assessed. Due to the lack of longevity in the mass utilization of 3D printing, risk and liability have yet to be fully defined.

Decision to be Made

What factors will be utilized to accept risk for production, development, and utilization of 3D printed products?

Disruptive Business Models

Current State of Practice

Many business models are not set up to adapt to 3D printing and additive material technology. This was evident during the COVID-19 pandemic, where industries dependent on imported goods suffered from decreased importation as ports were limited and resource production halted. According to Braziotis et al. (2019), the current state of 3D printing deployment depends on the configuration a company uses, whether standalone or integrated with traditional warehousing and resources. As most businesses are not fully digital, integrating a fully digital business model remains challenging.

In the GE Additive, Carbon was noted as groundbreaking for its subscriptive 3D printing services. However, the high startup costs for 3D printers deter many companies from moving to this type of manufacturing. Holzmann et al. (2020) note that even with extensive study into developing business models, limitations persist, and incorrect utilization of 3D printing can lead to future issues.

Desired State of Performance

Ideally, a fully developed digital business model centered around primary 3D printing production would be desired.

Gap in Practice

Companies not primarily using 3D printing for manufacturing find it difficult to integrate digital business models with their traditional models.

Decision to be Made

Is the company ready to use 3D printing as the primary source of manufacturing and adopt a more digital-based business model, or will it stick with traditional models, or attempt to combine both?

Technology Legal Rights and Ramifications

Current State of Practice

Martens (2020) discussed a new disruption in traditional business methods related to the legal aspects of utilizing 3D printing services. Legal liability and digital rights are not fully defined. Questions arise regarding ownership, protection, and modification of designs. Additionally, regulating digital information, taxation, licensing, and other business infrastructure elements must be addressed as 3D printing continues to grow.

Desired State of Performance

To uphold the same standard of regulation, liability, and ownership as traditional manufacturing businesses, along with associative rights and patents.

Gap in Practice

Current laws on digital production, trade, and sale, as well as liability and transfer laws for digital designs and modifications, are not fully developed.

Decision to be Made

How will the company ensure the protection and rights of their products, as well as assumption of liability for produced goods?

Industry Gaps in Practice—Summary

Insurability:

• Current State: There is no fully developed identification of liability on 3D printed modifications and manufacturing due to the inability to determine longevity of some productions.
• Desired State: To assign liability and risk to ensure proper insurability and liability of produced goods.
• Industry Gap in Practice: Insurability has not yet been fully defined in terms of 3D printing liability, modifications, and materials used in different markets.
• Decision to Be Made: What factors will be utilized to accept risk for production, development, and utilization of 3D printed products?

Digital Business Model:

• Current State: Few corporations have been able to move to a fully digital business model focused on 3D printing manufacturing. Integrating this model with traditional or mixed models is difficult.
• Desired State: Full development of a digital business model centered around primary 3D printing production.
• Industry Gap in Practice: Companies not primarily using 3D printing for manufacturing struggle to integrate digital business models with traditional models.
• Decision to Be Made: Is the company ready to use 3D printing as the primary source of manufacturing and adopt a more digital-based business model, or will it stick with traditional models or attempt to combine both?

Part 4: Recommendations

Based on the industry gaps identified, we recommend the following actions:

Develop Clear Insurability Guidelines

Establish a framework for assessing the risk and liability of 3D printed products. This should include long-term testing of materials, understanding the resilience of products in different climates and conditions, and clear definitions of liability for all parties involved in the production and use of 3D printed items.

Adopt a Hybrid Business Model:

Transition towards a hybrid model that combines traditional and digital manufacturing methods. This will allow the company to gradually integrate 3D printing capabilities while maintaining the reliability of traditional production methods. Invest in training and technology to support this transition.

Legal Framework Development:

Work with legal experts to develop a comprehensive legal framework that addresses the unique challenges of 3D printing. This should cover aspects such as digital rights, ownership, liability, and regulatory compliance. Advocate for industry-wide standards and regulations to ensure a level playing field.

DB FPX 8415 Assessment 2 Industry Gap in Practice Executive Briefing

Invest in Research and Development: Continue to invest in R&D to explore new materials, production methods, and applications for 3D printing. This will help the company stay ahead of technological advancements and identify new opportunities for growth. 

By implementing these recommendations, the company can better navigate the challenges and leverage the opportunities presented by the growing 3D printing industry.