Philips Lighting 3D Printing Research: Can novel AM Technologies boost a Declining Lamp Business?
Recently, Price Waterhouse Coopers (PwC) Belgium investigated the value of additive manufacturing for Philips Lighting’s. The deep-going and multi-disciplinary Philips Lighting 3D Printing Research on the spare part supply chain, is an excellent example how additive manufacturing technologies could renew a traditional business. Therefore, we happily republish a part of the article as published by PwC, for your inspiration!
The Philips Lighting 3D Printing Research – Project Challenges
The fabrication of high-intensity discharge (HID) lamps is an activity within the lighting industry that declines by up to 20% per year. Thanks to the coming of more sustainable and even more powerful LED light sources, conventional lamps – especially those consuming a lot of energy and heat – face a huge backdrop in sales volumes. End users change ‘en-masse’ from energy consuming items to energy savers, a logical and ecology-friendly choice.
Philips Lighting Turnhout Challenges
It places Philips Lighting in Turnhout in front of serious challenges in how to turn it’s conventional HID business into a healthy one. The maintenance budget on its turn, mirrors the global drop in sales volumes. As a result, the business needs to get creative in finding ways to increase efficiency and decrease costs if it’s to not just maintain, but increase its share of the sector, and that’s where novel 3D printing technologies comes in.
Managing SKU’s and Site Complexity
Philips Lighting has a huge portfolio of over 46,000 stock keeping units (SKUs) that are required to keep the site in Turnhout operational. That ties up a massive 5% of the firm’s annual revenue in spare part inventory alone. Next to that, the site’s annual maintenance and repair budget is estimated at 3%. Not only is the massive stock costly keep and manage, it also creates complexity. And when machines are upgraded or changed, some parts become obsolete and can no longer be used, so are simply wasted.
Business Opportunities of 3D printing
To help find a solution – and free up financial resources to use elsewhere in the business, Philips Lighting asked PwC to investigate the business potential for 3D printing in its overall spare part supply chain.
PwC first mapped the supply chain to find where 3D printing could have an impact on supply chain processes. As a basis for the research, four main areas were identified:
Based upon this approach, it became very clear that 3D printing could indeed provide significant opportunities for optimising the spare part supply chain.
Enhanced Shape Complexity, increased Lifetime and Multi-Material Units
3D printing allows to create shapes that aren’t possible with traditional fabrication. It specifically means that functionality of products can be enhanced and the lifetime of a unit can be increased siginificantly. Moreover, it is now possible to create units by using less material, and have less waste at the same time, thus saving cost.
Additionally, units can now be made out of different metals or materials in order to increase the durability. It also contributes to reduce repair time for machines, as parts now get available on site in a minimum timeframe. 3D printing technology also enables rapid prototyping and more fast and flexible design iterations, helping shorten the product development cycle, all resulting in an improved design.
The Unique Capabilities of 3D Printing Applied to the Philips Lighting Business
With 3D printing, it’s also easier to involve internal and external stakeholders in the process. The ability to print a unit on demand as when required means there no longer needs to be a physical stock (the stock is digital, in fact), and no upfront investments are needed. This helps to reduce working capital, reduce the risk of obsolescence and easy iterations can be implemented when the design parts need to be changed, even during the product development cycle.
The short lead times of units is a significant benefit, and with that the need for transport of finished goods is cut away. One of the major advantages of 3D printing is that complex assemblies can be printed in one single process, eliminating points of failure where there were previously joins, again reducing repair time and costs. Complexity is free!
By applying the knowledge of the 3D printing business, as well as bringing the right market players together in this research, PwC proved its added value and expertise in the field of 3D printing technology. Amongst them providers of 3D Printing software, 3D printing services and a specialist in 3D printing materials, such as metals that enriched and facilitated the implementation of the research.
Putting Ideas into Practice
The entire Philips stock level of a total of 46,778 SKUs was filtered according to set criteria to identify which units could be positively impacted by additive fabrication. These criteria included:
♦ Lead time (until delivery);
♦ Minimum order quantity (MOQ);
♦ Intellectual Property (IP) ownership;
♦ Product size;
With such an immense amount of data to analyse, PwC called in their data analytics experts to help, which made the process very efficient and was much appreciated by the client.
The above criteria brought the viable number of units to 9% of the product portfolio, which make up 18% of the inventory value. From these, five spare parts were selected to trial, each with different supply chain drivers. For each of those units, the annual operational costs were mapped, the part redesigned (where deemed necessary), 3D printed and tested. Finally, the business case calculated.
Business Case: Proving the Point
The business case for the five 3D printed parts represented an expected 30% reduction in OPEX costs and saw an increase in the lifetime of the units and an improved quality process. As such, it’s shown that 3D printing offers significant potential to improve the spare part supply chain at Philips Lighting in Turnhout, from both technical and supply chain perspectives. However, given the specific nature of the project and parts in question, the results cannot be extrapolated to the rest of the inventory, each part needs to be investigated separately.
Future 3D Printing Development
The further development of 3D printing capabilities at Philips Lighting in Turnhout is still under investigation with technicians already looking for new units that may be positively impacted by the technology. The aim is to continue to build up a library of viable examples where 3D printing can positively influence the business and save much-needed costs, helping to further increase the buy-in of stakeholders.
Despite the impressive results of the Philips Lighting 3D Printing Research, there are still obstacles to overcome before 3D printing can be further implemented. It takes a lot of time to finalise a full spare part case due to the amount of time required for iterations, testing and capability building. However, the actual project was successful in demonstrating that 3D printing can transform the supply chain for spare parts over the longer term.
Project learnings are also being shared with other Philips Lighting facilities around the world to see if it’s viable to embed 3D printing into the company’s overall parts management approach.
The 3D Printing Eleven for Lighting Profs
Finally, we recommend you reading also The 3D Printing Eleven: a comprehensive range of articles covering the unique benefits of 3D printing for the lighting industry. The Philips Lighting 3D printing research is a perfect example of how lighting companies can optimally benefit from this new way of making. A better understanding of the 3D printing movement will certainly contribute in removing the ‘fear’ factor of the unknown for engineers working with 3D printing in your own company.
The reorganisation of Philips Lighting Belgium into a more efficient and future-oriented organisation also comes with the birth of new initiatives on the site, such as the inspiring Open Manufacturing Campus. High Tech Start-Ups, such as Luxexcel, find their way to the inspiring and well-facilitated industrial environment!
This article about the Philips Lighting 3D Printing Research was inspired by the official PWC publication, pictures in this post are courtesy of Philips Lighting / PWC and 3DPrinting.Lighting.