"Perspectives", a monthly column authored by
Todd Grimm and Terry Wohlers
for "Time-Compression Technologies."
This column was published in the
March/April 2002 issue. For more great articles,
visit the "Time-Compression Technologies'"
Web site at www.timecompress.com.
The Real Cost of RP
Terry Wohlers and Todd Grimm
If you have discovered the benefits of rapid prototyping, you may be eager to bring the technology in-house. With some RP systems selling for less than $75,000, this can be an alluring thought and a reasonable option. However, to determine if ownership is the right decision, you must account for expenses beyond the system's purchase price.
The initial investment can easily approach or exceed $1 million, and recurring expenses are often measured in tens of thousands of dollars. This is especially true if your technology evaluation shows that the lower cost systems will not meet your needs.
Even if your needs demand a more expensive solution, it can be, and often is, a good investment. Many organizations worldwide have been successful with their RP installations and have purchased second, third, and even tenth machines. However, what's right for other companies is not necessarily right for yours. Before investing a single dollar, euro, or yen, consider the real costs associated with RP system ownership.
Do your homework
Understanding the true cost of ownership requires a thorough investigation. Whether you work for a Fortune 100 company or a small startup, study the options and investigate the requirements in detail. Perhaps this goes without saying, but it is surprising what has been overlooked in others' evaluations. Too little effort here and you may discover one of the most significant hidden costs; implementing a poor solution. Time and money invested in an inappropriate technology can drain a budget while delivering little or no benefit.
Your evaluation can take many forms: visit websites, join e-mail lists, and attend industry conferences. It is important, however, to go a bit deeper. Visiting user sites will allow you to ask many questions and get detailed answers that may be unavailable elsewhere. Many find it especially advantageous to seek professional advice and guidance. Although consultation can cost several thousand dollars, it can help you make the right decision.
Through research, you will want to discover the organizational demands of equipment ownership. Two critical aspects are related to the concept that you will have internal customers. With these customers, you will need to invest in promoting the use of the technology, and creating awareness of the benefits and limitations. To maintain customer satisfaction, you will also have to invest in building a strong process. As veteran RP users are aware, the dynamics of managing a schedule and delivering a top quality product are challenging when backlogs are measured in days and deliveries expected in hours.
As research will show, it is unlikely that your RP capabilities will accommodate all of the internal demands. This may be due to capacity, lead-time, material properties or the technology's capabilities. So, it is wise to allocate some of the RP budget to the purchase of prototypes from an outside source.
Cost of machine(s)
RP machines have a wide range of options, capabilities and prices. Presently, 15 companies offer more than 50 different systems. With advertised prices of $45,000 to $800,00, the purchase of the equipment does not present a hidden cost. However, support of the machines and long-term requirements can present a few surprises.
RP machines require a bevy of equipment on both the front and back ends of the process. Ensure that you fully account for all of the equipment that other users recommend for the specific processes you are evaluating. For some processes, the ancillary equipment expense can approach, and even exceed, the price of the RP machine. Considering all technologies, the list is too exhaustive to present. However, key areas of consideration include third party processing software, part cleaning equipment (ovens, wash tanks, hand tools, downdraft tables) and uninterruptible power supplies. Furthermore, do not forget to account for power consumption. Past studies of an SLA 500 showed that the cost for electricity could run as high as $6.00 to $8.00 per hour in some areas of the U.S.
For new, rapidly developing technologies, obsolescence is a risk, and it is one that can create significant expense. In the best-case scenario, one can avoid obsolescence with upgrades to the machines. Upgrades can be expensive, but they can extend the effective service life of the system. In the worst-case scenario, the technology is supplanted by newer and better systems or the system vendor ceases to exist. Failures, consolidations and the entry of new players with the latest technology are to be expected. To protect your investment be aware of the latest developments and current trends in the RP industry.
Maintenance
As with most machinery, preventative maintenance is a good idea, but it comes at a cost. An annual maintenance agreement from 3D Systems can cost up to $75,000 for its SLA 7000 machine. A one-year service agreement for a $200,000 FDM Titan machine from Stratasys is $19,000. As a rule, budget about 10% of the purchase price of the machine for full annual maintenance.
Many of the components in an RP machine will wear out or fail. If you choose an option other than full service maintenance, determine the expected life of the major components and budget accordingly. For example, a solid-state laser for stereolithography is warranted to last 5,000 hours - - seven months of use running at 70% of capacity. At this rate, you would need to account for at least one new laser for your Viper si2 or SLA 7000 at a cost of $40,000.
Without a maintenance contract, software maintenance and upgrades will be an additional charge. When using the SLS process, software maintenance costs $6,000 per year per machine.
In general, replacement parts are expensive, especially considering that many of the system manufacturers require that you buy the parts from them to maintain warranties. Many of these parts are specifically manufactured for the technology, so you may have no options other than buying them from the vendor. With no economies of scale, these replacement parts can be pricey.
Cleaning and finishing parts
Many processes such as stereolithography (SL) and FDM require the removal of support structures. This can be tedious and time consuming, can require special tools and equipment, and usually demands some expertise. Some processes eliminate or minimize this effort and the cost associated with it. Parts made with equipment from Objet and Solidscape permit you to wash away or dissolve the supports. Stratasys offers WaterWorks support structures with some of its machines, which similarly eases the support removal process. Powder-based processes, such as SLS from 3D Systems and ink jet printing from Z Corp., usually omit the need for support structures. With or without support structure removal, post-processing requires some labor and supporting tools to raise the prototype to a presentable level of aesthetic appeal and allowable tolerance.
Removing excess material from the surface of the prototype is another consideration. In the case of SL, it is important that you remove all uncured resin prior to any benching operations. Typically, this is done in an agitating tank filled with solvent such as Tripropylene Glycol Methyl Ether (TPM) or propylene carbonate. For SLS, loose powder is removed with compressed air and hand brushing while working over a downdraft table.
If your prototypes require a high level of finish (e.g., for tooling patterns or photo quality models), you will need skilled and experienced technicians to bench the parts and to do the painting. These processes will also require additional equipment, such as spray booths, and it will require additional facility modifications to keep air contaminants from reaching other work areas.
Some of the materials are considered hazardous, so protective equipment may be required. If the supplies are disposable, like protective gloves, the annual expense can be sizable. As a hazardous material, you will also need to consider the cost of disposal of contaminated water, unused resin and cleaning solvents.
Facility improvements
Your new RP machine may require facility changes such as the addition of partitions, ventilation, temperature controls, dehumidifiers, electrical lines, water lines and computer networks for both the machines and the supporting equipment. For some technologies, it is best to consider isolating the equipment to minimize contaminated air (fumes, dust) from reaching the general population in your building.
Material costs
RP materials are expensive, and the cost swells with waste, scrap, inventory and material conversions. Photopolymers, such as those for stereolithography, cost about $200 per kilogram. Although the price can vary with the product you select and the quantity you order, these materials are far from being a commodity. At this price, the initial cost of filling an SLA 250 or Viper si2 vat is $5,000 to $6,000, while an SLA 5000 or SLA 7000 costs nearly $45,000. Also, do not forget to cover the cost of inventory. For example, each SLA material that you plan to offer will require an on-hand inventory of $3,000 worth of material or more.
In most cases, unused material cannot be completely reclaimed. For stereolithography, the cumulative exposure to UV can cause an entire vat of resin to become unusable. With SLS, waste is generated with each build, because the process requires a ratio of 20% to 50% virgin material to recycled powder. A typical prototype will have a volume of 15% of its volumetric (bounding box) extents; so much of the used powder is never reclaimed, creating a stockpile of unusable material.
Scrap material is also generated through bad builds and damaged parts. With so many variables in the art of producing a good prototype, it is unreasonable to expect 100% performance. Although the scrap rate will vary, it would be wise to plan for 10% loss.
With all of these factors, allocate 20% to 30% of the prototype cost to materials alone.
Staffing
RP machines require operational expertise. While the expensive shop floor machines require more training and experience than the less expensive, office friendly machines, each require some level of training. It will take two forms; formal classroom and hands-on. Since RP has yet to become a cookbook process, there is much to learn with each attempt at building a prototype, particularly at first. Allot some time and money for this trial-and-error phase that will ultimately build the expertise within your staff.
To offer consistently good turn-around, budget wisely for staffing. A productive and efficient RP department is rarely a single shift, 8:00 to 5:00 operation. Skimping on the human resources will prove to be penny-wise and pound-foolish. Some RP users actually prefer to over staff in order to deliver quickly at times of peak demand. Independent of the technology that is selected, the primary functions that an operation must address are: data management and file preparation, machine operation and part finishing.
In terms of staffing, the first RP machine will be the most expensive. As your operation grows, you will find that one skilled technician can operate multiple machines. As a result, the multiple machine environments will have a lower percentage of labor to total cost.
A truly hidden cost is the time needed for internal sales and marketing to keep the operation at or near capacity. Some companies have neglected this part of the project and have failed due to a lack of awareness and understanding among potential customers inside the organization.
Benefits of owning equipment
While there is significant cost with equipment ownership, there are also many powerful benefits. As some companies have found, payback periods have been measured in months, not years.
Beyond financial justification, one of the most stated benefits of ownership is that the company has full control over the prototypes. Also, it reduces the risk of proprietary designs falling into the wrong hands. Some organizations feel that their new designs are so sensitive that they will pay the price, whatever it is, to keep them inside the company.
Others believe that owning your own equipment can lead to a reduction in part cost, when compared to buying from a service provider. This can be true, but only if you run the machine(s) effectively. An inefficient in-house operation can be more costly, both in poor lead times and hard dollars.
The last often cited benefit is improved delivery times. With the proper process, staff and capacity, an organization can produce and deliver RP parts faster. With the elimination of shipping, it is possible to deliver the parts the same day they are finished.
Summary
Hidden costs are only hidden when you are unaware of them. With research, these expenses are no longer a surprise. Armed with this information, you can make a better business decision on the purchase of RP equipment.
Clearly, it's possible to build a successful RP facility. Thousands of organizations around the world have done it. Current market research suggests that a growing number of companies are bringing the technology in house. Although there is growth in the service provider market segment, the rate of growth is greater for those that purchase the technology for their own use.
It is not always about the bottom line. Some companies feel that all the benefits of operating an RP system overshadow the cost of ownership. In these cases, it is often the champion of RP technology that effectively persuades the organization to move forward. The champion's role in a successful implementation does not stop after the deal is signed. The "can-do" attitude, motivation and drive of a true champion of RP can be the key to long-term success.
Increasingly, companies will own equipment. Yet, they will continue to use service providers in a fashion similar to how companies use both in-house and outsourced document printing. The odd are good that in the near future your organization will be one of these companies. In the meantime, study your options carefully and be sure you are aware of all the costs, especially those that are hidden.
Contact information:
Todd Grimm
T. A. Grimm & Associates, Inc.
3028 Beth Court, Edgewood, Kentucky 41017
Phone: (859) 331-5340 Fax: (859) 514-9721
tgrimm@tagrimm.com www.tagrimm.com
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