Determining The Value Of 3D Printing

Determining The Value Of 3D Printing

Calculating ROI: Determining the Value of 3D Printing

Determining the value of a 3D printer in your industry can drastically improve your profit margins and eliminate overhead costs, using ROI here’s how it can be calculated.

*Warning, this blog post is extensive. To fully cover ROI we went into detail on equations and explanations. 

It’s clear that any type of equipment in manufacturing technologies is an investment; resources like ROI can better justify the value of equipment, the cost of materials and the profit margin.  With 3D printing, you are eliminating “routine” product manufacturing costs such as work-holding, prototyping, tooling and fixture costs that would normally costs a fortune to produce on traditional manufacturing equipment.

To best understand your ROI, the team at Markforged, broke down the ROI process using a recently printed brake lever and evaluating the costs.

Finding ROI:

  • Calculating the Cost of a Printed Part
  • Determining Costs of Conventional Manufacturing Equipment
  • Find the Break-Even Point
  • ROI: The Value of 3D Printing
  • Calculating your ROI

Calculating the Cost of a Printed Part

You can calculate the cost of your printed part easily with the Markforged’s Eiger software.  Each time you design a part, in the top left corner there is a cost of materials per part analysis.  For the motorcycle brake lever the analysis read: 13.16 cubic centimeters of Onyx and 17.30 cubic centimeters of carbon fiber.

Next refer to the materials page on the Markforged’s website to find out what the cost and volume per spool of each material.

Onyx = currently costs $190 for 800cc, or $0.24/cc

Carbon fiber = currently costs $150 for 50cc, or $3.00/cc

Using this equation, we can determine the material cost of the brake lever:

(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

The final cost of the brake lever is $55.06.  Although this price may seem high, in order to achieve the ‘as strong as metal’ attribute most of the expense comes from the continuous carbon fiber.  Of course, not all parts need to be reinforced to that extent with continuous carbon fiber and to adjust appropriately to the amount of fiber needed, check out Markforged’s blog on Isotropic Patterns.

The Markforged printers are designed to be versatile and to better explain this; one of the other continuous fibers is fiberglass at $1.50/cc. It is a more cost-effective option, if your part requires strength and less weight.

Here is a calculation of the same brake lever using continuous fiberglass:

($0.24 /cc * 14.07 cc) + ($1.50/cc * 13.61 cc) = $3.38 + $20.42 = $23.80

As you can see, using continuous fiberglass instead of continuous carbon fiber, you can save $31.27.  Each part has unique properties, which makes it important for you understand these properties and what is required for your part to be successful and most cost effective to you.

{“Parts do not need to be packed with carbon fiber to meet the necessary strength needs of your product.  You can use geometry and loading conditions of your part to optimize fiber routine throughout your part.” }

Determining Costs of Conventional Manufacturing Equipment

Now, you can compare this cost of $55.06 for the brake lever to other manufacturing methods like CNC milling.  To get an estimate, a 3rd party needed to be involved and normal CNC milling machines price their parts per unit.  For quantities fewer than 100, per unit cost is $195.95 and any quantity over 100, the price per unit is $117.11 and decreases with bulk quantities.  (Keep in mind that this was just one resource – other prices per machine and company may vary.)

By these cost estimates, it’s clear 3D printing is the less expensive option and the difference in price is $140.89 (CNC Machining cost per part v. printing cost per part).

Let’s compare the machines themselves, instead of analyzing parts.  A 3D printer has an initial overhead cost and a CNC machining service operates only on a per-part basis.  Machinists that have to produce small fixtures for testing purposes, it would a few hundred dollars to set up, operate and would produce very little value.  Whereas if a small fixture could be produced on a 3D printer, in half the time and at a fraction of the cost – the part would hold more value than cost.

Find the Break-Even Point

To find your break-even point (the point at which total cost and total revenue are equal) we will use the $140.89.  This is what you could be saving with each prototype, tool or product you would have externally machined that would make up for the cost of a 3D printer (the Enterprise 3D printer kit = $13,499).

Based on fixed cost estimation – assuming you will only be printing this one part, here is your equation:

$13,499/$140.89 = Approx. 96

The Enterprise 3D printer kit will pay for itself in 96 printed parts.

ROI: The Value of 3D printing

A 3D printer has a one-time overhead cost to produce end-use parts overnight or within a few hours.  Other manufacturing methods like injection molding, CNC machining must calculate for every overhead cost: design change, cost of operation, shipping and cost per part.  Those overhead costs can affect lead time to market, product development cycle and make the investment not worth it, but by combining resources of 3D printing with manufacturing alternatives you can improve production costs, time to market and product development.

Calculating ROI

The more you print the more value it will be worth.  With the Markforged 3D printer, you can improve product development to be more time efficient and cost effective.

Let’s try injection molding, using the same brake lever with an overhead cost of $2,865 (Markforged was quoted on the brake lever to be injection molded) and an individual part cost of $3.46, making the initial cost $2,865.46 to prototype effectively.

Here is how it can be calculated:

ROI = 100% (Gain from investment – Cost of investment)/Cost of investment

The gain from investment if how much money can be saved by using 3D printing over injection molding and let’s say I need 3 different products that will need to go through 3 iterations (a total of 9 parts each with their own unique mold or machine process). Using the injection molding quoted amount from above, here is your equation:

Gain from investment = (9*$2,869.46) – (9*$55.09) = $25,329.33

Now calculate ROI

ROI = 100% * ($25,329.33 – $13,499)/$13,499 = 87.6%

The 87.6% is your return on investment from using the Markforged Enterprise 3D printer kit and fixed estimated cost printing the brake levers.  Not only has the 3D printer paid for itself and broke even but also achieves an 87.6% profit on top of that.  For prototyping, 3D printing exceeds expectations and profit margins, as well as eliminates overhead manufacturing costs.

Want to find out your company's ROI?

Request a demonstration of Markforged Eiger software to get a walk through of what 3D printing can do for your business through ROI.

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