In this series, we’re looking at the main considerations when designing and implementing a 3D printed product. In this case, we’re using Cathy’s 3D printed brace business as an example. Cathy is renting a place, getting a machine, and wants to do her own production. She’s making a brace that’s around 150 grams and is meant to be comfortable for users. She has around $350,000 to invest, and in the previous step we saw that she got her own post-production equipment and is looking at buying either a Formlabs X1 or three HP 1200s. She wants to use LPBF because she likes the level of detail, appearance, and fit of parts made with this technology.
Please Don’t Buy Machines Until You Know What It Is That You Are Printing
Now, I’d never advise her to do business this way. She should focus all her money and attention on design, testing, validation, and working with users. Then she should go to a few good services and test out results. Then pick one that performs for her and go into production through the service. Only once she’s stabilized on a design, product, production volume, and material should she, in my opinion, look at getting her own machines. Does that even make sense? Is it worth the hassle? Another reason is that, at the beginning, you should be open to using many materials, technologies, and designs. If you lock into a printer, then you think inside that particular box.
Let’s say you make a perfectly rational choice for a printer and then choose the common material PA12. Super straightforward, but this isn’t a regular-over-premium gasoline choice. Advanced3D’s Brent Wright, who makes a lot of prosthetics and orthoses, would advise you to look at PA 11 and would prefer PK5000 for this kind of thing. These materials are stronger and better suited to things like braces, especially if you’d like them to be thin and light. Not all machines may have PA11, and if they do, one could be much cheaper than the other. PK5000 is rare but probably the best material for a brace. If your user or your ultimate product works best with that material, then you should look at printers that can use it. But maybe Cathy comes up with a revolutionary soft brace that uses PP; then again, the best machine for you would be a different one. Maybe Cathy finds out that licensing her design to revalidation clinics that print the braces on site is the way to go. Then a smaller, easier-to-use machine and UX generally may make a different machine stand out. Sometimes (more so in metal LPBF than in polymer), one machine can print a material much better than another. In this example, Cathy is looking at an adult hand brace, but in her trial phase she might listen to customers and find out that full-arm braces are a much better market. These would be too big for smaller desktop SLS systems. If you truly want to solve a problem for someone, then you should explore all available solution sets and develop the one that works best. So keep your powder dry, spend money on design and listening to users, and outsource. Then reevaluate: does it make sense to produce in-house? By then, Cathy’s business may have grown enough that much larger 5600s or P3S make sense for her. We’re in a luxury position in our market where, in many cases, we don’t have to invest in the actual means of production. Cathy, however, pushed ahead and has dropped her money on printers; let’s see how she fares.
Let’s look at our example a little deeper. We’re assuming a relatively low labor rate of $35 per hour, including material price, operating at 10% packing density, factoring in amortization, and spending $180,000 or so on one Formlabs X1 or three HP 1200s. We’re not going to factor in vapor smoothing, etc., or any QA costs (right now!), and we’re assuming we make 100% of parts correctly and don’t have to redo any builds or even individual parts. We’re going to be a 9-to-5, one-person business, but then we’ll contrast that with the workaholic version of the business, where you come in for, like, an hour on Saturday and Sunday as well. I’m including this because a lot of people are looking for an edge, and I think that maybe an insomniac or two or an entrepreneurial security guard could really do more for most services than you’d perhaps expect. Maybe you think that you can push harder? Or buy the right equipment, or be a better designer? But, in this case we´ll see that the real secret is working weekends.
We’re going to assume here that we can make 8 braces in every 1200 and 34 on the X1. It’s important to note that if we needed just one more, we’d need an entire new build, plus a cooldown time and a post-processing cycle. So just one more, or a small size increase, can have massive effects, as can variable order sizes, which means I have to build a lot of inefficient builds. Below we can see our yield per month while we´re just printing during the week and what the yield would be if we came in for one hour every Saturday and Sunday as well.
Remember, each of these machines needs to be turned around by hand. With the 1200 coming in on the weekend for one hour on Saturday and Sunday, it has a significant effect on our monthly yield in braces. For the weekend shift, all Cathy has to do is come in for a half hour or so to turn around a machine; she can do the rest on Monday. Now, if we imagine this is Cathy’s Braces and she’s alone, this is a considerable production rate. But there will be additional shot peening, maybe another dying or vapor smoothing step, putting things in boxes, QA, and more. And there’s a huge issue here: post-processing. Overall, with the X1 we’d spend over 16 hours sieving. Now let’s imagine we’re selling these things for $50.
Now, the important thing here is that we’re all going to be millionaires! It’s like an ATM, but I put in powder. I’m like an investment banker in reverse. No, the important thing is to see the difference in just putting in those extra two hours on Saturday and Sunday. So the machine should not be idle. The machine should be moving. This is also why investment in better cooling, sieving, unpacking, etc. pays off. That helps you turn parts around more quickly and save. And it’s also easy to see that if you could pay a student to come in for one hour every Saturday and Sunday, you’d make a tonne more money with your business. You´d be surprised how many people look for more yield everywhere except in the most obvious places. Can I train someone to come in for an hour on Saturday and Sunday? If you find that person, the differences can be astronomical.
Now the problem, of course, is with the term profit. Let’s use the same model and add rent and utilities; around $100,000 needed for post-processing equipment; 3 minutes of extra cleaning and QA per part; 2 minutes of packaging and general handling per part; and introduce the horror that is the scrap rate, set at 10%. Now this scrap rate is super variable, but you must always include it because you pay for the material and labor; it takes up space; you have to reprint, so it steals from tomorrow as well, so it’s triply annoying. In this initial assumption, we’re just looking at scrap as waste, so we toss the parts.
Here, we can see a couple of profound effects. Powder prices matter. The mid-tier has us as the average Formlabs customer, paying around $65 per kilo for our powder, while the standard list customer pays $100 per kilo. Meanwhile, if we buy 10,000 kilos, we get the maximum discount from Formlabs and pay $45 per kilo. At list price ($100 per kilo), we’re bleeding money, but we bleed less at $65 and are close to break-even at $45. That is a huge impact.
Meanwhile, we’re working our ass off 9 to 5. But imagine you’d do 9 to 3 and just come in for that extra hour on Saturday and Sunday. Bam, $7000 more a month. You are not the factory. You are not the constraint; it’s the utilization of the asset and the ability to effectively put out parts at a given price that are key here.
How weekend machine turnarounds can increase production and revenue in the hypothetical brace business.
OK, so now the same calculation, but we’ve reduced our scrap rate from 10% to 5%.
So you know how those online influencers always have courses where they tell you the secret to becoming rich, and it turns out the secret to becoming rich is having a course that tells people how to become rich? I won’t sell you a course, brother, sister; I’ll give it to you straight. Would you like to make money with 3D printing? Sell powder.
OK, so let’s imagine that somehow our packing density has gone from 10% to 8%. And what the actual- oh my, welcome to manufacturing.
OK, so since the model is based on adding fixed costs like $50 per MJF build, it gets a bit wonky here. But still, what we’re seeing here is a huge effect. An 8% to 10% packing density doesn’t feel like a big change. But if we’re selling items at fixed costs and have obligations, spreading these costs across fewer items is a disaster. In this case, effectively, in the smaller 1200, we’re going from 8 braces to 6 in a build. So, in this case, it’s the larger object that is extra killing. And then a small build volume and lots of work doubly penalize you. The example above is not entirely fair. But it does help us reset ourselves mentally a bit.
If I told you I wanted to make pizzas and could make 10 pizzas an hour, that would be an easy baseline to start from. If I can fit only 8 pizzas in an oven an hour, that’s logical as well. We realize that even though we may be able to make 10 pizzas, we can only heat 8 and produce 8. And if we could cram a ninth pizza in and sell pizzas for $10, with $1 in labor, $1 in ingredients, and $1 in fixed costs, we could understand this model. We’re doing 90 in revenue, and the cramming is good because before we were doing 80. There’s this weird thing with the theory of constraints, though: sometimes it’s super easy to visualize, but other times it gets hazy real fast. The annoying thing about 3D Printing is that we as humans are perfectly capable of seeing how many things will fit in the shopping bag but if the bag gets bigger and the things get visualized in 2D it becomes much harder. And if I then tell you that your packing density has changed or that you need 2CM´s of space around the objects in your bag then the frame of reference goes out the window.
In packing density, we don’t feel just how important these factors are. Also, we don’t think in terms of firing half pizzas either. And we must realize that I could perhaps offer my landlord two days’ rent, but some numbers don’t really work like that. So small differences in scrap rate and packing density have a huge effect on how much money we’re making. Look, the above example is entirely created to show some key concepts, so that the truth will be a bit different, but the idea here is to get you thinking about 3D printing, if you will. And the real lesson is not the scrap rate. It’s that we should never have let poor Sally think of herself as 9-to-5; it’s the weekend shift that has such a huge impact. We should have told her of scrap and packing from the beginning. And if we were her friend, we would have never, ever let her make hand braces for $50. That low price is killing her here. In the next installment of this series, Cathy figures out how to save her business yet again!
Images courtesy of 3DPrint.com/Joris Peels, unless otherwise noted