November/December 2023 feature, published online in January 2024. Offers and contributor roles refer to that period.
“I know we need an industrial 3D printer but I am not sure if we will be able to amortize the cost of such an investment in our company. Any idea where I should start looking?” an engineer new to the industry once asked me.
Once you know Additive Manufacturing is the right path for you, the next step can be quite intimidating. What’s most intimidating here is the cost consideration that appears at many levels of the decision-making process.
With hindsight, and after many discussions with machine manufacturers, I should have suggested comparing acquisition models. Without knowing the engineer’s requirements, volumes and resources, it was not possible to conclude that buying was the best or worst option.
One of the most common assumptions we make in manufacturing is that we should buy our own AM machine. This is not a bad assumption in itself but when you start thinking about the manufacturing area, the number of operators you would need to operate the machine, the maintenance, and other related equipment (materials, post-processing, software, etc.) needed in your manufacturing value chain, that need can easily become a utopian dream – especially if your company does not have an unlimited budget at hand.
In such cases, it could be smart to explore subscription as well as leasing or renting options.
What does each option involve?
Leasing provides access to equipment in exchange for contractually agreed payments over a specified term. Rental, finance leases and other financing arrangements are not interchangeable: options to return, renew or purchase a machine depend on the offer and its terms. A discounted purchase option is not automatic.
This 2023 feature cited US-based NCP Leasing for AM equipment financing, with references to ExOne, Renishaw, Stratasys and 3D Systems. These examples describe the market discussed at the time, rather than a list of offers currently available.
Access to a machine can also be arranged through a distributor. Tri-Tech 3D and Additive-X, formerly GoPrint3D, were among the UK examples discussed. Short-term rental availability, technologies, included services and geographic coverage must be checked for each offer.
A subscription may combine printer access, software, support and some maintenance services, depending on the contract. In the Carbon model discussed here, users pay for platform access rather than an outright equipment purchase. Software subscriptions offered elsewhere in the industry should not be confused with subscriptions that include a machine. A meaningful price comparison requires a defined billing period and a clear list of included equipment and services.
For example, HP announced an expansion of 3DaaS Plus in March 2020, combining usage-based payments with a Jet Fusion 340 printer, supplies and services. Service or software subscriptions cited at other manufacturers, including Desktop Metal, do not necessarily represent the same equipment-access model.
“Rent and subscription models can be an appealing way to acquire exclusive access to a 3D printer with reduced risk through low or no initial capital expenditure. Renting may be the most flexible, but of course, this comes at a higher price over the long term. Subscription models can often be extremely competitive, however many are based on a minimum threshold of throughput that may be hard to guarantee without an established market. Purchasing a machine can be a daunting prospect, however, in the long term this can offer the most flexibility to the purchaser. A salient point is that the correct acquisition model for a user will often be determined situationally depending on their circumstances and potential markets,” Tom Cornthwaite, from DiManEx, told 3D ADEPT Media. DiManEx presented a platform for integrating additive manufacturing into digital supply chains.
An outright purchase gives ownership of the equipment. Before ordering, however, the total cost needs to be assessed: machine, any financing, facilities, staffing, consumables, maintenance, post-processing, inspections, downtime and residual value. Cost per part also depends on utilization and actual yield.
To this, Cornthwaite replies: “whilst amortizing capital costs through increased part prices is common in other manufacturing methods, care needs to be taken in doing so for 3D printed parts. Amortization is straightforward if there is a high demand for very similar parts, however, this is unlikely to be the case when utilizing the flexibility afforded by 3D printing! Overall, one needs to establish a part cost model that takes into account machine costs and depreciation whilst allowing flexibility to cope with demand and potential failures that can occur more often when applying 3D printing to new applications.”
“Our foremost consideration is the quality of the part, prioritizing it over the cost of the machine. As a 3D printing bureau, our commitment is to provide the highest standard of parts using cutting-edge AM technology, irrespective of the financial outlay. Additional factors such as material performance and repeatability are crucial, ensuring our clients can rely on consistent results time and time again,” Nick Allen, CEO at 3DPRINTUK states. 3DPRINTUK is a 3D printing service provider that prefers to purchase all their machines.
“Over the past decade, we consistently observed that investing in top-quality equipment has consistently proven to be a wise decision, yielding long-term benefits. Achieving a near injection-moulded finish with Additive Manufacturing (AM) requires not only the right printer but also substantial upfront investment in finishing equipment. Often, the combined cost of the finishing equipment is 2 to 3 times that of the 3D printer itself, a crucial factor not always immediately apparent,” Allen adds.
The finishing-equipment cost of two to three times the printer price is Nick Allen’s experience reported in this interview, not a general rule for every process.
The table below sets out comparison criteria. Accounting and tax consequences do not follow from an offer’s marketing name alone. For example, an entity applying IFRS 16 generally recognizes a right-of-use asset and a lease liability, subject to the standard’s exemptions. Tax deductibility depends on the rules applicable to the business.
| Model | When to consider it | What to check |
|---|---|---|
| Purchase | Long-term needs, sufficiently established volumes and the ability to operate, maintain and qualify equipment. | Initial investment, financing, staff, total cost per part, upgrades and obsolescence risk. |
| Lease or rent | Access for a defined period or preservation of cash, depending on the contract. | Minimum term, cumulative cost, maintenance, insurance, return, termination and any purchase option. Confirm accounting and tax treatment. |
| Subscription | A package combining equipment and services with recurring payments. | Included services, usage thresholds, required consumables, upgrade access, term, notice and exit fees. Eventual ownership depends on the terms. |
If you’re an AM beginner whose business case is not clear yet, I would recommend following DiManEx advice:
“Working with an experienced AM partner in the first instance is a great way to de-risk the process of developing and manufacturing parts for 3D printing. By letting an experienced partner guide the process, a lot of information can be gleaned about the most suitable machines, materials and even design for 3D printing, without the commitment and cost of acquiring a machine in the first instance. This can give the end user an opportunity to prove and grow their demand sufficiently to then potentially consider acquisition of their own machine to improve their costs further. It also gives an opportunity for a business to adapt their systems and processes to working with 3D printing as opposed to traditional methods. Quality systems and process flows may need alteration which can take time!”
In the end, whether you purchase, lease, rent or subscribe to a plan, you should keep in mind that there is no right or wrong answer, there is just one that works for your project or not.
This article has first been produced in the November/December edition of 3D ADEPT Mag.
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