Introduction

In August of 2000 the manager of a New England factory was conducting a walk-through of his plant. The factory was experiencing a surge in production due to rising demand. Their product was used in a consumer niche market and was considered a specialty product and there were only four competitors worldwide capable of manufacturing the product.

As he toured the facility the manager stopped at an old machine. Watching the machine in motion he spotted the manufacturer’s plate on the side and upon saw the year of manufacture – 1918. The equipment had been running for eighty-two years and used small leather belting and wooden rollers to process material.

As production increased at the plant equipment age caused dozens of breakdowns affecting quality, increasing waste and threatening their ability to meet production targets. Even more critical, the manufacturer of the equipment was no longer in business. With nowhere to purchase parts, support equipment, consumables and other items the factory had to use a constant stream of stop gap measures. Use of phenolic and nylon parts made in-house and expensive custom made parts using local contractors became the norm. Cost for maintenance and breakdowns was high and SOPs had to be altered to account for the fact that the parts required to keep things running were not available.

While the age of equipment in the above case is extreme, the problem of obsolete parts is not. A Bloomberg article from October of last year quoted statistics from the US Bureau of Economic Analysis and revealed that the average age of fixed assets in the US in 2015 stood at 22.8 years marking the highest average age of capex equipment in records dating back to 1925. And while the age of fixed assets in the United States will improve over the next few years as businesses ramp up capital expenditures in response to steadily improving economic conditions, it will take years to work through the logistics of replacing older equipment and reducing the average age.

Effect of Obsolescence on Businesses

As the average age of equipment has increased parts on many types of equipment have become scarce or completely unavailable and many businesses have followed the same path producing replacements themselves when they have the skillset and equipment or subcontracting parts to local shops that have the capability. Larger enterprises may have formal programs to manage obsolescence. These programs involve reactive steps such as buying bulk components for future use, cannibalizing equipment in the used market or finding a substitute part and modifying as needed. They may use proactive steps to address End of Life (EOL) or Part Change Notices (PCN) to determine a strategy to allowing maximum time to find replacements.

For a large number of enterprises these formal programs are not always an option as their smaller scale makes resources more scarce due to cash flow, time and mechanical knowledge. They may also have purchased their equipment on the secondary market at a point closer to the end of lifecycle for that machine hoping to upgrade to newer equipment as business grows. In both the large and small enterprises the end result is increased cost of operation and no “right sized” solution for their problem.

Nowhere to go Online

Many businesses use in-house resources or trusted local shops for help when they reach the critical point with an obsolete part. But as average equipment age increases the number of obsolete parts increase and this remedy provides limited relief. For those searching online there may be dozens of companies that supply obsolete parts to an industry. Most are versions of a traditional “machine shop” with a niche supplying parts for that industry. But these industry specific obsolete part suppliers have drawbacks.

First, they are costly and time consuming. Mailing parts back and forth, waiting on prototypes and settling on a workable design can add cost and time to sourcing a replacement. If the equipment needing the part is critical or already down costs can increase with added down time, idle labor or missed delivery.

Second, they may supply several parts for equipment within a specific industry but not every part needed for other obsolete machines in use. This requires additional time and energy from management to repeat the sourcing process for other of parts not serviced. /

The problem in using industry specific suppliers is that while there are many suppliers for a given industry there seems to be no comprehensive solution to address the issue across industries. Using a Google search online for the term “obsolete part suppliers” reveals no cross-industry solutions over several pages of options. Most are electronics, several are articles discussing the problem and the rest are industry specific.

Opening the Door to 3D Printing

With the average age of capital equipment at an all-time high the opportunity exists for manufacturers dealing with part obsolescence to consider additive manufacturing as a solution to their needs. At the core of this opportunity is the development of a strong relationship with an additive manufacturing service bureau. While this relationship could not only reduce cost of expensive obsolete parts it could also help manufacturers reduce related costs by applying a “holistic” approach to the sourcing and management of obsolete parts for their facilities. This approach would include:

Comprehensive Part Management for Obsolete Parts: Often manufacturers dealing with obsolete parts are left with a parts catalog and only expensive and time consuming channels for sourcing them if sources are available at all. A strong partnership with a service bureau creates a variety of options to reduce time and cost for those parts:

  • Digitization of parts within old parts catalogs can produce 3D print ready files for the exact tolerance of the original part.
  • Reverse engineering of custom parts for equipment previously produced in a machine shop.
  • Creation of a file management system allows the parts to be stored digitally in the form of a “virtual inventory” ready for 3D print at the user’s discretion. It consolidates files for digitized parts within a single source under the control and oversite of the manufacturer.
  • Many manufacturers dealing with outdated equipment often buy bulk parts to capture a savings on volume or because of scarcity. On demand 3D printing allows a factory with a high average age of equipment to participate in the type of best business practices of JIT sourcing that previously were not available to them as a matter of practicality.

Cost Reductions: Cost reduction from this approach would accrue not only in the form of the cost of the part itself but in interconnected areas of the enterprise such as purchasing and warehousing:

  • Part production cost is often reduced as parts are 3D printed on demand and premium supplier markups due to scarcity or the modification of a similar part to make it fit the user’s needs are reduced or eliminated.
  • Inventory reductions can be realized as manufacturers can move to a “Just in Time” footing rather than a “Just in Case”. This allows the realization of savings in two key areas:
    • Warehousing: as less space is needed to hold parts and less labor is needed to manage them.
    • Volume of parts purchased: since 3D printing of the part by the service bureau is on demand it can be plotted against frequency of breakdowns over the previous quarter or year.
  • Human capital cost is also reduced in two key areas:
    • Valuable mechanical skillsets can be redirected to breakdowns, maintenance and standard operation rather than “putting out fires” as the 3D printed parts needed are readily available on demand.
    • Non-value added labor such as warehousing, admin (such as constant calls to vendors for volume break quotes, re-orders, secondary sources and spot purchases of bulk parts) and purchasing is reduced by a fully developed file management system developed with the assistance of the service bureau.

Old Equipment in a New Era

While everyone within the manufacturing world would love to always have the newest equipment with the latest advances in technology the reality is that the last few decades have placed many smaller manufacturers in a hole. While economic improvement will mean that the average age of capital equipment will fall it will still take decades to improve the trend to the point where obsolete parts are not the drain on resources and cash flow they are today.

Forging new partnerships between manufacturers and additive manufacturing service bureaus allows enterprises with older equipment to participate in the kind of JIT inventory management environment that larger enterprises with newer equipment do today. It allows smaller older enterprises to put more cash back into new capital investment and product development because the cost of maintaining their equipment and keeping the factory running is reduced. And most importantly it will improve the small manufacturer’s competitiveness and allow them to take advantage of cutting edge tools, technology, skills and advancements within additive manufacturing to improve their operation in ways previously unavailable to them.


IC3D has over fifteen years of combined experience to help you develop the enterprise solution needed to lower costs on parts supply and service and allow you to move your obsolete part supply to a Just in Time (JIT) virtual inventory management system. Our expertise can also help you determine tooling for your R&D needs that will reduce cost and time to market for new products. From our in house base of large format printers developed by IC3D and specifically designed to reduce costs IC3D is a 3D printing service bureau, consumables supplier and partner in your project from concept to prototyping to completion.

IC3Ds superior line of consumables alongside our service bureau capabilities and our rapid prototyping services using our Proto Tool for 3D technology assure that you can create and produce your next project with confidence in both quality and speed.

Check out our line of materials online, or, if you’re looking for consulting, enterprise solutions or design needs, contact us and our staff will be happy to help guide you to the solutions you need.

 


iAmerica is Aging in More Ways than One – by Sho Chandra and Jordon Yadoo https://www.bloomberg.com/news/articles/2016-10-06/america-is-aging-in-more-ways-than-one
ii America’s Equipment is Getting Seriously Old – by Sam Ro http://www.businessinsider.com/average-age-of-private-fixed-assets-2014-9

iii Seven Steps in Predicting Equipment Lifecycle – by Ali Awais http://www.plantengineering.com/single-article/seven-steps-in-predicting-equipment-lifecycle-using-obsolescence-management/547c3ac6da4cc7097fc02cea10c097cf.html

iv Seven Steps in Predicting Equipment Lifecycle – by Ali Awais http://www.plantengineering.com/single-article/seven-steps-in-predicting-equipment-lifecycle-using-obsolescence-management/547c3ac6da4cc7097fc02cea10c097cf.html

v 3D Parts Catalog Technology: A Critical Business Component for Manufacturers” by Tim Thomas Industry Week, http://www.industryweek.com/product-development/3d-parts-catalog-technology-critical-business-component-manufacturers