3D Printing vs. Injection Molding

3D Printing vs. Injection Molding

One of the biggest developing technologies emerging in the modern era is 3D printing, an additive form of manufacturing that seeks to alter the way companies go about producing new products and possibly even manufacturing itself. As like any other new technology, as it develops, the overall usage price drops to a point of commercial viability. Today, 3D printing has found itself a market where it can be used appropriately to facilitate prototyping and even reduce lead times. It has the potential to accelerate production and improve productivity. However, the question remains as to whether this technology can replace current conventional manufacturing methods. To explore this idea, 3D printing will be compared to a conventional manufacturing method, injection molding.

Injection Molding and 3D Printing in Manufacturing

Injection Molding plays a big role in producing parts in large volumes and moving a product into mass production. This process has been a staple in the industry for its ability to reduce waste when compared to CNC machining – a process where a block of metal is cut away to create a product. When running an injection molding process, the only waste obtained would be from the runner, sprue, and gates. If a company uses a slightly more expensive thermoplastic material, then this waste can be remelted and reused for other injection molds. Overall, by reusing and reducing waste, this can serve to reduce overall material costs.

However, it must be understood that the mold presents itself as a high entry cost to this manufacturing method. Creating the mold can range anywhere in between $1,000 to an excess of $80,000, depending on the complexity of the model. Before any kind of injection molding can be done, the mold must be manufactured. This alone can lead to long lead times and could delay company productivity until the model can be made. However, this process becomes more economically efficient as production is increased. As economies of scale take its effect, this process gradually reduces the cost per part manufactured. This makes this manufacturing methods ideal for large production companies and for those can afford to pay the high barrier to entry.

The benefits from economies of scale can be amplified for more complex products. With injection molding, a more complex part is coupled with a more complex mold, this of course, causes the cost to rise. Meanwhile, 3D printing has no added costs associated with increasing complexity but lacks the benefit of cost reduction per part as manufacturing increases. As we can see in the infographic below, injection molding proves to be more cost effective in large scale operations. It can also be noticed where the cross over point is for the two processes, showing at what cost per part and what production level the two processes are equal. It can also be concluded that 3D printing is more cost efficient at lower levels of production. This case uses polylactic acid (PLA) as an analysis. The case shown below comes from Sculpteo – a brand of BASF company:

Rex Plastics, an American plastic manufacturer has put together a graph detailing the cost estimates for each mold. Rapid prototyping tooling is a fast and cost-efficient way to carry out low-volume injection molding for several types of plastic parts. Insert tooling combines metal and plastics, or multiple combinations of materials and components into a single mold. This improves wear resistance, tensile strength, conductivity, and allows for tighter tolerances. High production tooling allows for molds to be specifically designed for high production. This means tighter tolerances, endurance, high automated wear maintenance provisions, and process control capabilities. Cost estimates for the three options are listed below.

For smaller companies, 3D printing can serve as a good alternative. By either outsourcing or purchasing your own 3D printing machine, the product needed can be printed in a matter of a day or two and can quickly be rushed into production or to wherever needed in the logistics train. Additionally, this process is known for its very low waste turnover with each product manufactured. 3D printing is an accurate form of manufacturing a product, however it does run with a higher risk of failure. Certain estimates place this at around 20%. Due to the high rate of failure, there is a risk of wasting material and time.

A Cost Analysis: Car Frame
Based upon market prices for common materials used for 3D printing and injection molding, we can obtain a preliminary estimate for the cost of materials. Listed below is the cost for each material in terms of euros per metric ton.

Using a cost calculator from Xometry, a company focused on the production of products, we can determine a general estimate for how much a part would cost for both injection molding and 3D printing. For this analysis, a car fender with a 1643.32 cm3 volume will be analyzed with three separate manufacturing techniques – HP Multi Jet Fusion, SLS 3D printing, and injection molding.

SLS printing is a technique that uses a laser as the power source to sinter powdered material such as Nylon or Polycarbonate, often resulting in a rougher but stronger part. HP Multi Jet Fusion is relatively newer way to 3D Print. For this process, printing is done layer by layer as a fusing agent is added with each pass. For both 3D printing studies below, Nylon 12 30% Glass Filled is used as the base material, resulting in 3.22 kg of material used. The results are listed below.

Conclusion

Overall, there are more than just cost factors to consider when deciding to use either 3D printing or injection molding. These factors include time, finish, accuracy, and quantity. It is up to the company to determine what methodology is best in producing what they need. However, the question of whether a company can substitute either forms of manufacturing is clear. 3D printing can serve as a good compliment rather than a substitution. It can be well-used for rapid prototyping or low-scale production levels. It can serve as a proper bridge between the two and ultimately optimize the production cycle of a company.


Customs Warehousing and Free Trade Zones - Case Study

Customs Warehousing and Free Trade Zones – Case Study

When it comes to assessing the lowest costs, a product must be selected in order to obtain more concrete figures. A good case study to analyze costs associated in assembling and distribution of products would be automobiles. In this case study, three different scenarios will be taken into account. The first scenario will consider a finished product moving into a customs warehouse for either export into the U.S. or distribution into Spain. The second scenario would be importing an intermediate product such as steel into a free trade zone that will be used for assembling a car. The third scenario will focus on a hypothetical situation where every part of the production of a car occurs within Spain.

Case Study 1: Finished Product (Export/Import into a Customs Warehouse)

Consider having the car assembled and produced outside of Spain. Initially, this product avoids Spanish regulations and taxes. Once the product is exported to its destination, then the duties and taxes will be subject to the discretion of the final country of destination. Take a Spanish company that wants to access the European or American market with its line of cars, this company will want to store supplies until the market deems it necessary for use. Once an opportunity presents itself, the company will begin distribution of supplies depending on where it is necessary.

To export a finished car to the U.S. the company must pay a 10% VAT tax and a 2.5% tariff. The trader will also incur a merchandise processing fee of anywhere between a minimum of $27.23 to a maximum of $528.33 per entry in a customs warehouse at a rate of 0.3464% of value of a product. Finally, another cost incurred would be the harbor maintenance fee at a rate of 0.125% of the product value. For imports into Spain, the tax process is much simpler – with only two major components to worry about, a 21% VAT tax and a 10% tariff. To put this in numbers, €1,000,000/$1,000,000 worth of cars will be used as an example. The breakdown for numbers is listed below.

This goes hand in hand with the amount of storage costs that a company incurs a day. This process takes place preceding exporting from Spain or following arrival to the customs warehouse. To maintain cars within a customs warehouse, the average cost of storage is approximately €0.15 in Madrid and €0.2267 in Barcelona.

Case Study 2: Intermediate Product – Steel (Export/Import into a Free Trade Zone)

In this case, a company is to import an intermediate product that will ultimately be used in the assembly of the product. This may be a favorable option for companies that wish to take advantage of a free trade zone’s flexibility towards processing. A free trade zone would allow for transformative processing that a customs warehouse would not.

Taking a core component in the production of a car, steel, a rough estimate can be obtained over how much cost a company may incur. For steel being imported into Spain, from the U.S., the product will be subject to no taxes until a final product is manufactured. Once a car is assembled, the product is then subject to an additional 21% VAT tax rate and a 25% tariff. For steel exported into the U.S., the product will be subject to a similar merchandise processing and harbor maintenance fee mentioned in case 1. After a car is produced, the product is then subject to an additional 10% VAT tax. This process would be repeated for all the other differing products needed in a car. This car would then be subject to a storage fee preceding exports to another country or arrival to Spain prior to distribution. To maintain the cars inside a free trade zone, a company must pay anywhere in between €0.01054 – €0.0924 per cubic meter per day. In order to compare between the intermediate and final product, a €1,000,000/$1,000,000 worth of steel will be analyzed with destination or origin to the United States. Once again, the numbers are listed below.

Case Study 3: Production in Spain

For this case, the entire process of putting together a car is done inside Spanish/EU customs zone. Ignoring labor costs and fixed costs, we can determine the effect of VAT taxes on intermediate processes of the car. For this process, a manufacturer must acquire raw materials and pay a 21% VAT tax on the amount purchased. This cost is then pushed down onto the next manufacturer as a new sale price is set. VAT, at this point, is taxed on the gross margin at each point of the manufacturing, adding to the total VAT tax. Finally, this total VAT is then pushed onto the consumer, who ultimately pays for it once a final price is set. Once again, the additional VAT is added due to the gross margin proposed by the retailer.

For a complicated process of putting together a car, it may prove to be too expensive to go about this route. There are too many intermediate points of value added and compound with each middleman. It is always much better to pay VAT once, rather than several times. While the cost of VAT is ultimately recuperated at the sale of the product, it may prove to dig into a company’s cash flow when moving large quantities of products.

Conclusion

Overall, there are three different approaches a company can take to go about processing and creating a car. Based on the options presented, the first two options seem to be the most cost-effective option. However, this is dependent on the product being produced. For a company looking to cut costs while also continue processing, a free trade zone proves to be the most cost effective. A company focused on storage and logistics, then a customs warehouse is more effective.


Customs Warehousing and Free Trade Zones

Customs Warehousing and Free Trade Zones

Taxes and Cost

In the current free market, there are some options an exporter may take to ensure they produce their products efficiently and cost-effectively. For a company considering moving their products abroad, there are some main concerns that a company must consider moving into an international market. The most important factor to a company’s profit in this case would be import taxes, value added taxes, and commercial policy measures. This is where both customs warehouses and free trade zones play an important part in trade. Both customs warehousing and free trade zones provide an opportunity for exporters to defer these taxes and provide special treatment for goods and storage.

In fact, by deferring value added tax until the point of exportation, businesses have reported up to 25% to 30% overall savings. This is due to the high levels of VAT taxes the Spanish government imposes on imports. With the VAT tax rate being at approximately 21% for most goods, the overall total customs estimate totals between 20%-30%. The total customs estimate is just the combination of costs due to duty, VAT tax, and customs fees. In the United States, this burden is less with total customs rate imposed is approximately 10-20%. These are savings that can be allocated into other areas of logistics for the distribution of cargo.

Overview of Differences

While both storage options offer a good tax incentive, there are other variables that make either one of these options more fitting for the right company. For exports in the United States, there is a time limit of five years set for goods to be held in bonded warehouses, whereas they can be held indefinitely in a free-trade zone. However, for this time limit is not present in the European Union. This opportunity allows for companies to delay introduction of a product to market until there is greater demand. Listed below are some important distinctions between the two:

  • Domestic Reach – Custom warehouses allow for quick domestic response to domestic demand.
  • Restricted Goods – Restricted goods are only limited to customs warehouses.
  • Processing – Only processing that does not fundamentally change the product is accepted in customs warehouses. Manufacturing can take place in free zones.
  • Allowable Exports – Custom warehouses are exclusive to only foreign exports while free trade zones are open to both foreign and domestic goods.
  • Duty Payment – Payment of duty is made once the goods leave the customs warehouse or exits non-custom territory. However, movement can be made between free zones.
  • Control of Goods – Local customs officials are in control and supervision of stored goods in customs warehouses and their movement. In contrast, free trade zone officials have full control of the stored product.
    • However, customs warehouses carry the added benefit of offering logistical services for transport, packaging, waste management, etc.
  • Ease of Withdrawal and Removal – Withdrawal from a customs warehouse is done with permission from Customs and must be withdrawn in its entirety. A “as-needed” withdrawal requires special permission. Goods in free trade zones can be withdrawn more freely.

Here is a table summing up the differences between the two options:

Conclusion

Overall, the choice behind what kind of storage option is right for your company is based on what the end goal and necessity is. A customs warehouse is geared more towards a company that has more manufacturing capabilities. A free trade zone is more geared towards international trade. As it stands, it may seem to the average consumer that the more cost-effective and freeing choice is a free zone. However, a company must acknowledge the savings on taxes and its comparative savings on logistics. If the goal is to focus on a more domestic market with an international product, a place where supply needs to be satiated at a moment’s notice, then a customs warehouse would likely be a better option. This allows for less customs red tape and for a more dynamic procedure. For a more international focused trade, free trade zones may prove to be more cost effective. Ultimately, the goal is to reduce the amount of cost a company incurs and maximizing logistical output.


Agriculture - Case study (part 2)

Market Research

As concluded in our last report, there are 4 key aspects triggering a constant decrease in our clients’ sales. The approach to these key aspects is to increase commercial activity and sales.

Our research continued focusing on some of the most consumed vegetables in Germany: potatoes, strawberry, cabbage, salat, asparagus and cucumber, identifying shrinking and growing markets.

Overview

Due to climate change, farms may lose productivity, and new fruits/vegetables may appear and compete against the traditional ones. Also, society is changing, newer generations are moving to urban sites, easing a land concentration in fewer farms.

Change of crops

As shown in the graphs analyzed by Ahead Analytics, nearly most of them have a decresa in the production over the last 20 years.

Basically, the geographic part where the vegetable itself was being harvested, is a key point to analyze for commercial purposes. Furthermore, a company with this analysis go ahead with the further steps: find commercial partners and focus on customer experience.

Conclusion

The agriculture industry is affected by many intangible aspects such as climate change or change in customers behavior. However, it is relevant to analyze the existing market and the main crops that are sold in the domestic market. Therefore, we can state that focusing on the customer (final and intermediary) should be the key aspect.


Agriculture - Case Study

Market Research

Markets Dynamics is about constant change in several directions: clients’ needs change, competitors move their offers, new technologies are created and new trends show up. In June 2020, we developed a market research for a mature market, Germany, focusing on fertilizers as the main product. The challenge: understand the market current trends and find new niche dealers to expand sales.

Overview

We concluded that there are 4 key aspects triggering a constant decrease in our clients’ sales: Climate change, Agritech solutions, Substitute products and change of consumer behaviors. The approach to these key aspects is to increase commercial activity and sales.

Climate change

The temperatures in Germany have had an important increase in the last couple of years. As we can see in the graphs, the last two years have been the hottest and driest in a 60 year timeline:

Companies considering adapting their existing strategies to climate changes, must change their mindset and start developing new products that may satisfy clients’ needs. In this project, the current climate evolution suggests that climate in Germany is going to get even more severe, hotter, and drier, resulting in decreasing planted surfaces.