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ROI and IRR for your 3D printing investment.

For designers, engineers and product managers, the value of 3D printers for reducing cost and accelerating product development is unquestionable. Yet despite the obvious value, it may be unclear how to convince management teams and accounting departments that the benefits justify the investment.

 

The fundamental advantage of 3D printing is that it enables the cost-effective production of models, prototypes, tooling and production parts. Independent of design complexity, these items can be produced in hours or days rather than days or weeks. That advantage yields the benefits of expediting the product development process, expanding the scope of prototyping work or streamlining production with more effective tooling. However, these benefits may be undermined by the two-fold challenge they might create.

 

For many companies, efforts like prototyping or making new tools are viewed as an expense, not an investment, for which there is no budget. With this mindset, increasing the volume of this work means only that expenses will increase. This translates to a negative impact on the bottom line that becomes hard to rationalize. To justify 3D printing, the value of switching from conventional methods to 3D printing must be quantified in real, tangible ways.

 

Likewise, a justification based on speed must also be rooted in tangible gains that result from making the production process faster. Although “time is money” is an oft-stated platitude, the direct link between time and money can be difficult to establish, at least in terms that are indisputable in a financial justification. Without the time-to-money correlation, 3D printing justifications may be difficult.

 

These scenarios force many to justify 3D printing on the weakest value proposition, saving money by substituting it for current processes. This approach works, and many companies have successfully used it for justification. However, doing so ignores the value of enacting change within the product development cycle — changes such as completing more design iterations, prototyping early and often or making the impractical possible. Excluding these benefits weakens the justification, which makes it more difficult to make the case for an investment in 3D printing.

 

The following discussion provides strategies and guidelines offered by those that have been successful in justifying 3D printer purchases.

 

 

justifying the cost

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