In-house vs outsourced metal additive manufacturing (AM)

Metal additive manufacturing offers a range of benefits, from complex part design to affordable low-volume production. However, getting those benefits requires companies to either make parts with their own metal 3D printer or buy parts from a third-party manufacturer or service bureau. The decision between these two options is often referred to as a “make or buy” decision.

Choosing which route to go down isn’t always clear. On the one hand, owning a metal 3D printer reduces lead times and provides a certain degree of flexibility. On the other, hardware investment costs are high and can take several years to recoup. Many companies struggle to do the math.

This article identifies some of the main considerations when choosing between in-house and outsourced metal AM, looking at the advantages and disadvantages of each strategy.

Incredible structures can be manufactured thanks to metal AM technologies. This demo part was 3D printed with EOS’ DMLS technology. Source: Aniwaa

Make or buy? Main considerations

Scale and frequency of production

How many parts do you need, and how often do you need them? This is perhaps the most important consideration when deciding whether to make or buy 3D metal parts.

Because the cost-per-unit can be higher when outsourcing (since the third-party manufacturer or service bureau is aiming to make a profit), companies that require many parts on a regular basis should consider purchasing in-house systems, while companies that only occasionally need parts have less reason to: they can justify paying a higher cost-per-unit as it would take them much longer to recoup hardware investment costs.

Prototypes or end-use parts

Another important consideration is the function of the parts being made: are they prototypes or end-use parts? In-house prototyping can be preferable to outsourced prototyping, since R&D departments may need to quickly fabricate and test different iterations of a part; if they must wait for each prototype to be shipped over from elsewhere, bottlenecks can begin to form.

EOS and Materialise developed a F1 brake pedal prototype, optimizing its stiffness all while reducing its weight. Source: Aniwaa

Investment costs

Metal AM systems are expensive. Companies must consider the hardware price as well as numerous up-front and running costs. In many cases, the total cost of ownership for metal 3D printing is high.

Companies with their own metal AM systems can recoup investment costs over time and might make higher profits in the long term than they would through outsourcing. However, outsourcing poses a lower financial risk: companies do not need to take on debt to cover initial investments, and they avoid the problems of hardware breakdown and obsolescence.

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Ease of integration

Potential investors must consider the practical and physical implications of operating a metal AM system on their premises. For example, powder bed fusion (PBF) 3D printing requires the storage of metal powders in a controlled environment (some powders, like magnesium, are highly flammable) as well as the installation of safety equipment, ventilation, and air conditioning.

Unlike polymer 3D printers, only a handful of metal 3D printers — the Desktop Metal Studio 2, for instance — can be safely and easily integrated into an ordinary working environment like an office.

A small production series sample from Desktop Metal’s Shop System. Source: Aniwaa

Staff qualifications

Companies choosing between in-house and outsourced metal 3D printing should assess the AM literacy of their workforce. 3D printing requires expertise, and without that expertise, it makes sense to outsource to a competent third party. This can lead to time savings, better final parts, and reduced waste caused by failed prints.

Alternatively, companies can train their staff to a higher level of AM competence or recruit new employees with existing AM skills.

Pros and cons of in-house and outsourced metal AM

The advantages of in-house metal additive manufacturing include lower manufacturing costs and production flexibility, while the decision to outsource metal AM offers a lower level of financial precarity and guaranteed production expertise.

In-house metal AM (make): pros and cons

Pros

  • Shorter lead times: print metal parts and prototypes instantly
  • Flexibility: no minimum order quantity; modify or cease production without penalty
  • Lower cost-per-unit: once initial investments have been paid off, pay only for materials and running costs

Cons

  • High investment cost: metal AM systems can cost hundreds of thousands of dollars
  • Requires expertise: design for additive manufacturing (DfAM) and printer operation require unique professional skills
  • Facility considerations: integrating metal AM systems requires physical space and supplementary equipment

Outsourced metal AM (buy): pros and cons

Pros

  • No up-front investment: lower financial risk in making small payments to a third party
  • Mix and match different AM technologies: order SLM parts one day, binder jetting parts the next at no additional cost
  • Guaranteed expertise: parts made by AM professionals who may be able to help with part design, material choice, etc.

Cons

  • Higher cost-per-unit: the third party must make a profit from the order
  • Longer lead times: parts can take days or weeks to arrive; inconvenient for rapid prototyping
  • Privacy: companies may prefer to keep intellectual property in-house despite standard use of non-disclosure agreements

Decision: Make or buy metal AM?

Even taking all considerations into account, it can be difficult to determine the true value of in-house metal 3D printing compared to outsourcing.

Let’s imagine that a company makes aluminum parts with typical dimensions of 60 x 30 x 50 mm, and is considering buying an in-house metal 3D printer for $150,000. To outsource its parts to a service bureau would cost approximately $200 per unit, so the company would pay a sum equivalent to the value of the 3D printer every 750 units.

If we disregard other costs for simplicity’s sake, a company might therefore consider an investment in the 3D printer to be justified as soon as it has printed 750 units on it — though, in reality, the investment will take longer to pay off due to ongoing material costs, energy expenditure, and other outgoings.

A company for whom the benefit of in-house 3D printing is marginal might consider a low-cost metal AM technology such as metal extrusion (but only if that technology is capable of producing the parts it needs to an acceptable standard). The company may also consider investing in an affordable system for prototyping while outsourcing its final parts.

In the end, each company must assess its own requirements and financial capabilities in order to choose between in-house and outsourced AM.