Cost Additive Manufacturing – Make or Buy?
An overview of today’s supplier market and cost structure for metal AM parts.
Cost Additive Manufacturing
The make or buy decision is becomes very important for success of the business case. Especially for SMEs, however, high part cost is still the main restriction for further wide-spread adoption of this production technology. For Laser and Electron Beam Melting (LBM and EBM), a significant part of the (AM) manufacturing/ production costs results from high machine hourly rates of 40-50 €/h paired with relatively slow building speeds.
Ampower Insights gives a detailed calculation of production costs and introduces the ratio of cost per unit of volume for an easy comparison of technologies and materials. Today, the in-house production cost ranges between 0,86 €/cm³ for aluminum alloy AlSi10Mg to 3,20 €/cm³ for light-weight and medical grade titanium alloy Ti-6Al-4V.
Cost of service bureaus
The existing market of metal service bureaus is analyzed for a representative depiction of market prices. The AM capacity at suppliers currently consists of a total of approximately 120 machines installed in service bureaus in the selected study region Germany, Switzerland, and Austria.
The majority of service bureaus is concentrated in Southern Germany. Market prices range between 3-10 €/cm³ for finished aluminum parts, representing a spread of 35-240% around the mean value. The price spread for titanium parts is significantly lower with market prices around 5-7 €/cm³.
Additive Manufacturing Make or Buy?
The surprisingly large spread in market prices persists even when larger lot sizes resembling a continuous serial production are requested. Comparing different materials, aluminum offers the largest margins on the supplier market while stainless steel yields much lower returns.
Ampower Insights closes with procurement guide lines and key factors for a Make or Buy decision. The decision to Make or Buy generally depends on the amount of parts printed per year. For aluminum a profitable in-house production starts at approximately 125 kg per year. For stainless steel, the break-even is reached at 420 kg per year. Therefore, even with in-house production it might be beneficial to secure supply for low volume parts and materials.
