The Economics of 3D Printing
3D printing is advancing into the realm of production, both in terms of work-holding to assist in machining operations and custom end-use parts. While the value of a printer may not seem apparent at first, executing the calculations will tell a different story. This post will walk you through the economics of 3D printing via cost and Return on Investment calculations. The Return On Investment (ROI) is an evaluation tool used to calculate the return you have gotten on an investment by percentage. This can apply to manufacturing technologies as well, to help determine how much you can save by using something like a 3D printer to justify its cost. While the price of a 3D printer may sound steep, it is the money you are saving by eliminating “routine” product manufacturing costs like work-holding, prototyping, and tooling costs that can make the printer worth the investment. Below, we outline the steps you can take to calculate the ROI for your printer.
Finding your ROI:
1. Calculating the Cost of Your Printed Part
The first step to determining the ROI of your 3D printer is calculating the cost of materials per part. Markforged’s Eiger software provides material estimates to simplify this process. I’ll be using a brake lever, one of our sample parts, for this example. As shown, I use 13.16 cubic centimeters of Onyx and 17.30 cubic centimeters of carbon fiber.
The cost and volume per spool of each material can be found on our materials page, and with this information we can find the price per cubic centimeter. For Onyx, spools currently cost $190 for 800 cc, or $0.24/cc, and carbon fiber, spools currently cost $150 for 50 cc, or $3.00/cc. With the following equation I can determine the material cost of my part:
(cost per cc of plastic * volume of plastic) + (cost per cc of fiber * volume of fiber) = Total Cost($0.24 /cc * 13.16 cc) + ($3/cc * 17.30 cc) = $3.16 + $51.90 = $55.06
So the total cost of this brake lever costs $55.06. For those of you familiar with desktop 3D printing, this may seem on the expensive side. However, as shown in the calculations, much of that expense comes from continuous carbon fiber, which reinforces this brake lever to be as strong as metal. However not all parts need to be packed with carbon fiber just to achieve that strength. As we’ve explained in previous posts, efficient fiber routing can reduce costs and print time.
Additionally, one of the values of a Markforged printer is its versatility. With different fibers, you can achieve different material properties. For example, fiberglass, one of our other continuous fiber options, can achieve about the same strength as carbon fiber, but ends up being heavier and less stiff. If I’m not concerned with weight, just strength, then fiberglass is a more cost effective option at $1.50/cc. With the same file and fiber routing optimized for fiberglass, the numbers change a bit. Here is what I get:
($0.24 /cc * 14.07 cc) + ($1.50/cc * 13.61 cc) = $3.38 + $20.42 = $23.80
With fiberglass, I can achieve about the same strength and save $31.27. This is why it is critical to determine what properties you want in your part. Each material has its own unique properties, and understanding how to use the fibers to your advantage for the strongest parts will help you cut down on costs. Parts don’t have to be packed with carbon fiber to meet the necessary strength needs of your product. While the strength does depend upon the geometry, you can use the geometry and loading conditions of your part to optimize fiber routing throughout your part. For example, if you only need to resist bending in one plane, use a sandwich panel instead of filling every layer with fiber, as explained here. These techniques allow further cost reduction for getting robust, beautiful, and precision parts.
2. Determining Costs of Alternate Production
So now that I’ve determined the final cost of my part is $55.06, it’s time to compare that cost to those of other manufacturing methods. This part is normally CNC milled, so I submitted it to a 3rd party manufacturing service to get a cost estimate. For quantities under 100, the per unit cost is $195.95. For quantities over 100, the per unit cost is $117.11 and further decreases in bulk quantities. These costs may vary depending upon the machining service or method you use. For example, if this part were cast, the initial cost would be extremely high to produce the mold, but the cost per part once the mold is produced would be minimal.
By comparing the two processes, it is immediately clear that 3D printing is the less expensive option. The difference in price (CNC machining cost per part – printing cost per part) is $140.89. However, there is a bit more to it than that. The 3D printer has an initial overhead cost, and the CNC machining service operates only on a per-part basis. This is where many engineers and designers get stuck justifying the cost of a 3D printer. The initial price of our Enterprise Kit is $13,499, while CNC machining a part is only a few hundred dollars each time.
3. Finding Your Break Even Point
The $140.89 you could be saving with each prototype, tool, or product you send to an external machine shop builds up, and you can speculate how many parts it will take to “break even”, which means calculating how many parts it will take to make up for the cost of the machine. Assuming you only print this one part, an Enterprise Kit will pay for itself in 96 parts:
$13,499/$140.89 ≈ 96
4. Return on Investment: The Value of 3D Printing
96 parts may not seem worth it, but this simple calculation contains a lot of abstractions – we are only talking about one fairly simple part here. 3D printing eliminates the overhead manufacturing costs required for every part, for every design change. The same brake lever used earlier has a tooling cost of $2,865 for an injection mold prototype. If any modifications are made to that design, that cost must be included with each design change. The price of a 3D printer you only need to pay once, while tooling and prototyping costs are required for every design. Those overhead costs combined with manufacturing lead time delay the product development cycle make the investment worth it, as some of our customers can attest:
“We’re able to take a part that would have cost $400, with two and a half week lead time of machining from one of our local vendors, we printed it over the weekend and the manufacturing floor likes it just as much, if not a little better…and they’re using it to this day,” says Joe Walters, New Product Design Engineer at Arow Global. “I would estimate that we have seen a full return from printing 5 parts each of 3 different plastic injection molded prototype components, specifically from not having to invest in the soft tooling traditionally used to create injection molded parts.”
5.Calculating Your ROI
Your ROI can be calculated with information about overhead tooling costs from other fabrication methods and the cost of products your printer may produce. This is a function of the number of prints you actually produce – if you buy a printer only to print one part, it won’t be worth the investment. But the more parts you print, with each new design, each iteration, your Markforged 3D printer can push product development to be more time efficient and cost effective.
Let’s say you are designing a part to be injection molded. I’ll use the quote I got on the brake lever for this example. With an overhead cost of $2,865 and an individual part cost of $3.46, each design iteration of the part effectively costs $2869.46 to prototype without a professional 3D printer. Knowing this, your ROI can be calculated with the following equation:
ROI = 100% * (Gain From Investment – Cost of Investment)/Cost of Investment
The Gain from Investment in this case is how much money you saved using additive manufacturing over injection molding. If I am working on three different products I want to fine tune for production, and I know that each product will go through three iterations, that is nine parts each with their own unique mold or machining process. As an abstraction, I’ll use the injection mold quote provided above to calculate the gain from investment. The cost of Investment is the cost of the 3D printer – in this case, a Mark Two Enterprise.
Gain from Investment = (9*$2,869.46) – (9*$55.09) = $25,329.33
Now I can calculate the ROI:
ROI = 100% * ($25,329.33 – $13,499)/$13,499 = 87.6%
This number is the net “amount” you achieve from your purchase of the printer. From 9 product prototypes, not only has the Mark Two Enterprise paid for itself and broken even, but it has returned 87.6% of the cost on top of that as well. This is where the power of additive manufacturing really shines – not only for prototyping but also for creating some of the parts that cause these overhead manufacturing costs. The beauty of the Markforged 3D printer is in the things it can produce with its high-strength materials: the tooling, fixtures, even injection molds, can drastically eliminate overhead manufacturing costs. Its speed and quality improve product development cycle, allowing our customers to produce presentable, high-performance parts in less than a day. The offer of adaptability no matter what the part allows you to produce parts with the strength and quality needed to succeed at a speed and cost unmatched in industry.
Don’t have a Markforged 3D printer yet? Try out our software so you can calculate your own ROI.
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