Strategies for Survival: Customers Finally Take Center Stage in Additive Manufacturing

In the dynamic landscape of additive manufacturing (AM), fast innovation used to be the key to attract attention and early success. Currently, however, the industry is experiencing a notable shift in focus from pushing the newest cutting-edge technologies every 12 month to prioritizing customer needs regarding reliability and application enabling solutions. In the early days, Additive Manufacturing machine OEMs dazzled the market with groundbreaking new technologies every couple of months. But as the industry matures, the emphasis must increasingly be on applications, customer requirements, after-sales service and implementing customer feedback. Machine suppliers ignoring this, will not move their machines from the R&D lab onto the production shopfloor and will ultimately not survive the coming years characterized by a fierce competition and consolidation phase.

It is not long ago, that new technology innovations regularly made the headlines of Additive Manufacturing news outlets. Established players and newcomers alike focused on new machine releases, multiplying build envelops and production speeds. Furthermore, completely new printing processes, promising to revolutionize the industry were introduced into the market on a regular basis. Early adopters bought new piece of equipment to investigate and evaluate its capabilities, often left disappointed, while investors pumped cheap money into startups in the hopes of the next breakthrough. This is changing now.

Recently an increased focus on applications has formed, while new technology releases became scarcer. As the latest AMPOWER Insights on the AM startup and investment landscape shows, the number of newly emerging AM companies supplying new hardware, software or printing services has dropped by over 70 % between 2013 and 2021 while the number of startups using AM for innovative applications has increased by 61% in the same timeframe. Additionally, AMPOWER is experiencing an increased interest from the supplier side in customer satisfaction surveys, market positioning analysis and after sales assessments. Machine OEMs, software vendors and part manufacturing service provider are shifting their focus towards scaling and keeping AM production customers, whose priority is to ensure consistent quality and machine availability. “Users are rather increasing utilization of their machines than purchasing new equipment”. This statement from AMPOWER’s Managing Partner Dr. Maximilian Munsch has proven to be true for the market developments in 2022 and remains true for 2023 as the newest survey results show.

The overestimation of possible machine sales, fueled by the magnitude of startups and their desired growth rates, has long been visible in the AMPOWER Report data. Since the introduction of the AMPOWER Report in 2019, its USP is the analysis of the market from the supplier as well as the customer point of view. From the beginning, the forecast of AM machine customers was significantly lower than the supplier predictions. While the gap was largest in 2019, today, the supplier predictions are converging towards user expectations (see PBF Trend graph from the AMPOWER Report 2023). This trend indicates the loss of over-hyped sales expectations from early startups as well as a maturing industry that is increasingly understanding its customer needs from the technology and its realistic potential in industrial applications.

What are the needs of the AM users going forward and how can the suppliers distinguish themselves from the pack? In most cases, the answer is reliability in machine performance and service. Nowadays, when asked what their number 1 purchase criteria is, most customers will refer to service and maintenance. While many AM companies focus on pushing machines into the market, any follow-up sales will depend on how successful the customer is with the first machine. This first success does not only depend on high machine reliability and timely reaction to maintenance and service requests. It also means fulfilling, what has initially been promised. A late 2023 study by AMPOWER on UV resins revealed, that the majority of material specimen tested did not meet the data sheet values communicated by the vendors. Machine OEMs, software vendors and material suppliers are well advised focusing on their existing technology, making the machines reliable and the process robust and repeatable.

The user centric shift does not stop in the hard- and software supply chain. Part manufacturers also must increase manufacturing standards and quality levels if they don’t want to become trapped in a tiresome battle of pricing. As the recent AMPOWER market pricing study showed, Chinese part manufacturing suppliers are capable of pushing cost per part to levels, where western suppliers are not able to operate profitable. Customer focus, service level and quality are levers, western part manufacturing bureaus can utilize to withstand the increased market pressure.

Although many market players will not survive the coming years, the technology and overall market will benefit from this transition phase. It is the true move towards an established manufacturing technology, finally leaving the hype behind. Only companies that will offer the most reliable technology and service offering will turn into profitable businesses on the long run. Today’s Additive Manufacturing user and customer will benefit from this development. After this phase, we will see a more robust technology operating in production environments to the required standards.