Building the Business Case:

Identifying Criteria to Measure ROI for Additive Manufacturing

Brochure Title

1 Playbook
 A faster return on
investment (ROI) starts
with a business plan.
No longer a newcomer to the industry, metal additive manufacturing (AM) is a growing
technology that gives companies a competitive advantage and a positive ROI. With lower
barriers to entry than ever before, including reduced costs and an increasingly skilled
workforce, more industries can adopt proven processes and begin to map out a plan for
how additive can improve their business.

To realize your additive advantage and ensure your investment pays off, you must first
build a comprehensive business case.

For metal additive, getting to ROI is more than just

assessing the cost of the part.
Manufacturers must look at how additive can impact the whole system—from part cost
to product performance improvements to supply chain impact to new revenue streams.
If manufacturers look only at the cost to make a part, they lose out on the larger ROI and
potential new business opportunities additive can enable while competitors forge ahead.

The four steps to creating an AM business case:

Step Build a Cost Model

1 How can additive technologies reduce the initial part cost?

Step
Evaluate Performance Factors
2 How will additive impact product life and life cycle costs?

Step Identify Supply Chain Disruption “The business case isn’t in a

part-to-part comparison; it
3 How will additive streamline my manufacturing processes
and overcome existing pain points within the business? needs to be justified through
system-wide impact.”1

Step Determine the ROI – Francois Gingras, Director

4 Based on my business goals and in-depth ROI analysis,

does additive make sense for me?
of Industrial Equipment
at CRIQ
For the ready.

2
 Step Build a Cost Model
1 A cost model can include several things, like tooling, infrastructure and the final
component. These factors alone do not constitute a business case but are a key
area to assess as you develop your business case.

The first major step is choosing a part for additive.

The best part for the greatest or fastest ROI isn’t always the costliest or most difficult to
manufacture. Costs influence decisions throughout the design process, from requirements
to conceptual design, process selection and designing for producibility.

How to select possible parts for additive

Design complexity with additive manufacturing

Use conventional
manufacturng
Cost to manufacture

Use additive manufacturng

Degree
With conventional manufacturing, as the degree of complexity
of complexity increases, the cost to manufacture also
increases. Additive manufacturing eliminates this factor, so design innovation is essentially free.

When creating the list of possible parts where additive may make sense, manufacturers
need to consider the design freedom additive offers. Design freedom enables you to think
outside what is possible with conventional manufacturing. Evaluate multiple parts for
their level of complexity (use the chart above as your guide) and assess which ones
deliver the best ROI from design freedom, less labor and more efficient use of materials.

Factors to look for when considering parts for additive:

• Complex castings and geometries • Weight reductions

• High-labor parts • Performance improvements
• Fabricated assemblies • Part obsolescence
• Durability improvements • Customization
• Part consolidations • Low-volume parts
For the ready.

3
 Save on part costs
throughout the process.
For each part you consider for additive, analyze all the
associated expenses that come with manufacturing that
part. Look for opportunities, or challenges, for an ROI.

• How does this material cost compare to conventional

Raw material costs of a single manufacturing methods?
Material component + support structures + • Determine the type of metal powder needed for
costs unused powder not consumed after that component
the reuse limit + scrap parts • How much waste—solid or powder—does the
process create?

• Load build chamber with powder

• Prepare the file to print
Cost of people’s touch time on a part
• Inspect and clean optics and build chamber
Labor and may include associated overhead;
• Remove part from platform and platform from machine
costs higher labor costs = more expensive
• Conduct filter maintenance
final product
• Inspect and test machines and powders
• Program the machine

The plant and equipment expenses • Additive, thermal processes and inspection equipment
allocated to each part over a period, • Support equipment such as powder removal, sieving
Capital
which can be depreciated over and hoists
expenses
time or leased, and may include • Facilities for the machines and additive production
associated overhead • Power backup systems

• Laser/scanner repair and replacement

• Recoater arm inspection/replacement
Expenses for the day-to-day
• Inert gas usage
Operating maintenance and operation of the
• Filter and tooling maintenance
expenses plant and equipment, as well as
• Personal protective equipment (PPE)
machine and process consumables
• Electricity
• Build plates

• Feature resolution
Iterative process that is continuously • Surface finish
Processing refined and considered at the system, • Powder removal
costs component and feature level; • Build size and speed
a data-driven approach • Number of parts per build
• Post-processing requirements

Costs associated with inspecting • Functional testing (pressure, flow, etc.)

Test and
additive parts for performance, • Non-destructive inspections (e.g., visual, X-ray and
For the ready.

inspection
dimensional and geometric CT scans)
costs
specifications, among other qualities • Destructive testing (e.g., cut-ups)

4
 Step Evaluate
2 Performance
Factors
Performance factors quantify the system-level benefits or impact of the product in
terms of their life cycle costs.

With enhanced performance factors, metal additive delivers end results that
traditional manufacturing cannot. Today, manufacturers are leveraging additive
to optimize their parts and products, from improved cooling performance to
patient-specific implant designs.

Once again, businesses need to evaluate the ROI of potential components for additive
from many perspectives—whether that’s reflected in improved parts and extended
product lifetimes, or costs saved with lighter, more complex and more durable parts.

Performance factors across industries

The following is a partial list of performance factors that may pertain to your overall
business plan assessment.

• Freedom of design
“Additive manufacturing
• Enhanced bone ingrowth in orthopedics
makes it possible to
• Reduced risk of delamination of trabecular structures
produce geometries that
• Weight reduction
cannot be achieved using
• Increased fuel economy
traditional manufacturing
• Improved efficiencies
methods. In addition,
• Enhanced reliability
the parts have greater
• Less warpage due to faster cooling time
performance capacity or
• Improved sustainability
functional precision.”2

– Alex Berry, Director and How companies are improving part performance
Shareholder at Sutrue Ltd. with additive
Avio Aero improves 4WEB Medical leverages Gplast reduced warpage
sustainability of turbine freedom of design for of music system part with
engine blades. spinal implants. faster cooling time.

10% lower fuel 75% of implants filled with From: 12% parts rejected
consumption and graft material for maximal To: 3% parts rejected
decreased emissions3 bone incorporation4 with additive5
For the ready.

5
 Step Identify Supply
3 Chain Disruption
Supply chain disruption identifies and quantifies strategies to overcome existing pain
points within the business.

Supply chains add to process steps and the number of human touches a product goes
through from start to finish; this complexity is becoming unnecessary and outdated for
some situations. Moreover, your supply chain comes with its own set of challenges,
like time and expense to create and manage purchase orders, long lead times and
high-cost customization—not to mention recurring expenses, like leased equipment
and indirect materials.

With additive, manufacturers can streamline the supply chain and optimize the process to
make a part by solving current market challenges at a lower cost to manufacturers.

How much does an average purchase order (PO) cost to fulfill?6

$59 (low costs in some industries) PO costs increase for each additional supplier required
$217 (average across industries) to create one part. More suppliers = more labor costs,
manufacturing sources, inspection costs and repair sources.
$741 (high costs in some industries)

Supply chain optimization across industries

The following is a partial list of performance factors that may pertain to
your overall business plan assessment.

• Serial production of mixed • Streamlined supplier base

designs and sizes • In-housing of tooling operations
• Part consolidation • Reduced workflow
• Inventory reduction • Lead-time reduction
• Waste reduction • Maintenance, repair and
• Freight savings overhaul (MRO) improvements
• Purchase order reduction • Single source

Case study
Supply chain optimization with additive
Take a look at how additive simplified the supply chain and overall process
for GE Aviation’s Mid Frame Super Structure.7

Conventional Manufacturing Additive Manufacturing

Part(s): 300 1
For the ready.

Engineers: 60 6–8
Manufacturing source(s): 50+ 1
Data system(s): 40 1
Repair source(s): 5 1

6
 Step Determine the ROI
4 All your research and cost assessments come together in this final step in building the
business case: finding your ROI and path toward production.

Pull together: 

• The analysis completed for the cost model
• Performance factors
• Supply chain optimization

Once you have everything laid out in front of you, confirm your business challenge,
opportunity or industry obstacle you hope to solve with additive. The sum of the above
is the ROI for each of your selected applications.

Based on the ROI for each application, provide recommendations to your management
team as to which part(s) to choose for additive. Use a checklist like the one at the end of
this playbook to help you build your case.
For the ready.

7
 Tips for evaluating
part costs
Develop an assessment spreadsheet in which you analyze 8 to 15 products
for additive. Using your internal ranking system, evaluate the production
modalities and costs associated with each part. Choose up to three of these
as potential candidates for additive.

Case study: How much further did additive take Optisys?8

Business objective: Capture new revenue streams Market obstacle: Traditional antenna manufacturing
by creating a superior antenna that operates up to a consists of complex systems that are large and
90-GHz frequency band. heavy, which can lead to higher launch costs and
inconsistent radio frequency (RF) performance at
higher frequency bands.

Results:
Cost model:
• Optisys breaks even on machine acquisition just one year after purchasing its first metal additive machine
• 75% reduction in non-recurring costs

Performance factors:
• 95% weight reduction
• 80% size reduction

Supply chain disruption:

• 100 parts with subtractive manufacturing to 1 part with additive
• Lead-time reduction: 11 months to 2 months

Business opportunities:
• Increase in sales: 30+ signed commercial contracts with $34M in submitted proposals
• 2 patents awarded, with 10 provisional patents submitted and 20+ additional patents in preparation
• New market expansion: 5 product lines designed for AM

“Its easy to add features to an existing AM design, easier

to assemble the finished components and, long-term, you
have less testing, maintenance, and service when you have
fewer parts.”8

– Rob Smith, COO at Optisys

For the ready.

8
 Checklist: Build Your
Additive Business Case
The goal of writing your business plan is twofold: Choose parts for additive and assess if
additive is going to give you a true ROI.

As you move forward, you can use the following checklist to ensure you factor in all the
key criteria of your analysis.

Step Build a Cost Model

1 Identify possible parts for additive consideration and

gather information for each part based on the following:

Material costs • How does this material cost compare to conventional manufacturing methods?
• Determine the type of metal powder needed for a specific component
• How much waste—solid or powder—does the process create?
• Consider costs savings for reusing unsintered powder

Labor costs • Prepare the file to print

• Inspect and clean optics and build chamber
• Remove part from platform
• Remove platform from machine
• Conduct filter maintenance
• Inspect and test machines and powders
• Program the machine

Capital expenses • Additive, thermal processes and inspection equipment

• Support equipment, like powder removal, sieving and hoists
• Facilities for the machines and additive production
• Power backup systems

Operating expenses • Laser/scanner repair and replacement • Personal protective equipment (PPE)
• Recoater arm inspection/replacement • Electricity
• Inert gas usage • Build plates
• Filter and tooling maintenance

Processing costs • Feature resolution

• Surface finish
• Powder removal
• Build size and speed
• Number of parts per build
• Post-processing requirements

Test and • Tensile and functional testing (pressure, flow, etc.)

inspection costs • Non-destructive inspections (e.g., visual, X-ray and CT scans)
• Destructive testing (e.g., cut-ups)
For the ready.

9
 Step
Evaluate Performance Factors Step
Identify Supply Chain Disruption
How will additive impact product life and life
2 cycle costs? Use the factors that apply to your 3
How will additive streamline your
manufacturing processes and overcome
business. Add others if needed. existing pain points within the business?
Use the factors that apply to your business.
Add others if needed.
o Freedom of design
o Weight reduction o Part consolidation
o Improved fuel economy o Inventory reduction
o Improved efficiencies o Streamlined supply chain
o Enhanced reliability o Waste reduction
o Less warpage due to faster cooling time o Freight savings
o Enhanced part performance o Purchase order reduction
o Improved sustainability o Streamlined supply base
o Supportive of body mechanics in orthopedics o In-housing of tooling operations
o Serial production and mixed designs o Reduced workflow
and sizes o Lead-time reduction
o Reduced risk of delamination of o Maintenance, repair and
trabecular structures overhaul (MRO) improvements
o o
o o
o o

Step
Determine the ROI After the Business Case Development
Based on your business goals and in-depth Once you draft the business plan, you need
4 cost, performance and supply chain data to create a presentation and sell your plan to
you gathered, run a final ROI analysis using senior management. A typical plan includes the
a spreadsheet and data for your company. following areas:
Does additive make sense for this
business case? o Business objectives
o Market obstacles
o Pull together the analysis completed for o Cost analysis (part, process, performance
steps 1–3 factors and supply chain)
o Conduct an ROI analysis to include these o Recommendation*
elements: part cost, process cost and supply
chain impact *In some cases, you might not find a business case for
additive, which is a good reason to write a business case
o System redesign/AM adoption factors before starting down the additive path.
o Rank the parts for additive based on ROI
For the ready.

10
 Success with
metal additive
starts here.
Writing an additive business case helps ensure that the investments you want to make are positioned
to result in a business advantage and a higher return on investment. However, for a business plan to
succeed, a strong representative cost analysis is critical.

Today, the ready are conducting a cost analysis, evaluating performance factors, identifying supply
chain disruptions and calculating the ROI of additive. They are charging forward with additive
technology, disrupting the market and shaping the future of manufacturing.

The additive technology is ready. Are you?

To streamline your path to additive success even further, we’ve included a checklist on pages 9-10 for
building your business case.

When you’re ready to realize your additive advantage,

we’ll be there to help.
As market leaders in additive technology, GE Additive is here to help you discover your ROI potential.
We’ve walked this path and have helped other manufacturers build their business cases so they could
move to production—faster.

Build a successful business case with us.

ge.com/additive

1
Quebec’s CRIQ selects GE Additive Arcam EBM, https://www.ge.com/additive/stories/quebecs-criq-selects-ge-additive-arcam-ebm (accessed June 3, 2020).
2
The additive journey: The Time Is Now, Industry in 3D (accessed June 1, 2020).
3
GE Additive Production Playbook, November 2019 (accessed June 11, 2020).
4
GE Additive, “Orthopedic_Precision_Targeting_GE_Additive_External,” (accessed June 11, 2020).
5
Gplast, 3D Cooling/Additive Manufacturing, http://www.gplast.com/3d-cooling-or-additive-manufacturing.php (accessed June 11, 2020).
6
Inside Supply Management Weekly, The Monthly Metric: Average Purchase Order Processing Cost,
http://ismmagazine.org/the-monthly-metric-average-purchase-order-processing-cost/ (accessed June 11, 2020).
Brochure Title

7
GE Additive, “Aerospace_v19,” (accessed June 9, 2020).
8
The additive journey: The Time Is Now, Industry in 3D (accessed June 11, 2020). ©2020 GENERAL ELECTRIC

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