The economics of additive manufacturing: Towards a general cost model including process failure

The interest in Additive Manufacturing (AM) technology, also known as 3D printing, is unbroken. In many industries, however, stakeholders are struggling to understand AM's potential for manufacturing value creation. Most available literature on the cost of AM stresses the importance of ancillary processes and treats the relationship between process efficiency and capacity utilization. The most recently added - and overdue - aspect included in the extant AM costing literature considers the expected impact of so-called ill-structured costs, mainly relating to process failure and product rejection. Available research has investigated this aspect across a variety of technology types and process elements. This paper develops a new AM cost model that is generally specified so it can represent the probability and expected cost effect of failure events for all existing AM technologies. To demonstrate the implementation of this model, this paper applies it to the manufacture of pharmaceutical products (tablets) using the AM technology variant material jetting. The paper thus provides a robust indication of achievable unit cost levels, the cost effect of process failure, and also broaches the usefulness of cost models in guiding further process improvements.