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A New Landscape for Mining Could 3D printing spell profound change for the mining supply chain?

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  • A New Landscape for Mining Could 3D printing spell profound change for the mining supply chain?

  • 1Introduction

  • 2Now, nearly 600 years after Gutenberg invented the printing press, the technology is fast approaching a point of evolution that could turn a century into hours with the latest developments in three-dimensional printing (3DP).

    3DP is the process of making physical objects from a digital model using a printer. Although still in the developmental stages, the technology has advanced swiftly since its introduction in the 1980s, and is already presenting opportunities in new areas, such as in the custom manufacture of prosthetics, dental products and other medical devices that would have been unimaginable just a few years ago.

    Over the next decade, technology observers predict that the pace of change will intensify and more and more applications will be found as sophistication increases and the cost of equipment falls, following the now well-established curve for technology products.

    The technology has the potential to revolutionize consumer and industrial markets, increasing the opportunity to tailor products to individual needs at leads times measured in hours, not days. If the technology has even a fraction of the impact that experts predict, then it will revolutionize supply chainschanging the point of manufacture, shrinking transport costs and introducing potentially limitless product variants.

    For mining companies, often operating in the most remote and hostile environments and requiring a broad array of inputs (notably spare parts required at high frequency), 3DP provides an opportunity to streamline and optimize in-bound supply chains. But there are many practical challenges. How far has the 3DP technology advanced and are the ubiquitous predictions ever likely to be fulfilled in such a complex, challenging and safety-critical environment? This paper explains the 3DP concept and its evolution followed by a discussion of the opportunity of 3DPas it advancesand practical considerations for mining companies and their supply chains.

    Before printing was discovered, a century was equal to a thousand years, Henry David Thoreau postulated.

  • 33DP offers a digital approach to manufacturing by building solid objects on a layer-by-layer basis from a digital model.

    3DP is sometimes referred to as additive manufacturing, rapid prototyping or rapid manufacturing. The approach is very different from traditional manufacturing methods that typically involve subtracting material and performing multi-step processing. In contrast, 3DP products are produced through an additive process involving the successive layering of material into its final structure. At present, there are several 3D printing technologies, some of them are:

    Stereolithography apparatus (SLA) Uses the process of concentrating a beam of ultraviolet light focused onto the surface of a vat filled with liquid photocurable photopolymer, hardening the material layer by layer.

    Fused deposition modeling (FDM) Extrudes powder that hardens when leaving the extrusion nozzle to form layers.1

    Selective laser sintering (SLS) Uses a laser to melt small particle powders that solidify to form a particular layer, working similarly as SLA but applying powdered material instead of liquid photopolymer.

    3DP defined

    The technologies are different in terms of material and process, but the principle is the same in that the 3D printers build solid objects on a layer-by-layer basis, as shown in Figure 1. The most mature methods print hardened plastics, but even metals and ceramics are relatively developed. A vast array of other new materials is being explored for 3DP use, including carbon fiber, wood, foodstuffs, and bio materials.

    3DP can produce anything from tiny accessories, clothing and design items, plastic handles and car dashboards to custom artificial tooth implants and fully functioning parts with moving components. An impressive example is the production of high-precision, safety hoop and air intake systems in titanium alloy materials for the Formula One racing industry, further increasing confidence in the performance of the materials produced by 3D technology.2 Industry leaders predict in the future it will even be possible to print multiple materials simultaneously making composites of materials possible.

    Figure 1. The 3DP process occurs through an additive, layer-by-layer approachSource: Accenture

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  • 43DP has advanced steadily as a technology since it emerged in the 1980s with the continuous progression of 3D printers for industrial and, more recently, for domestic use. With the commercialization of the 3D printers the price tag has gone down from the six-figure range to a few thousand dollars today, as shown in Figure 2.

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    Figure 3. Industries being served by additive manufacturing and 3D printing Source: Wohlers Report 2012

    The core application and impact of 3DP started within industrial product development where rapid prototyping and design visualization have enabled faster and more cost-effective solutions, which are well suited to low-volume production.

    The automotive and aerospace industries have therefore been early adopters, where the driving force is rapid prototyping, cutting cost and lead times within the product development space.

    3DP has since evolved into greater use in the manufacturing domain with the benefits of reduced wastage, minimal setup times and tooling. Today, the largest application for 3DP-produced parts is within the automotive and consumer goods industries. (See Figure 3.)

    With the recent evolution of 3DP and the emergence of printers that can print new and even multiple materials at once producing more advanced and complex objects of increasingly higher resolution and larger scale, it is likely other industries will gradually adopt the new technology. IT research and advisory company Gartner suggests that 3DP is currently at the peak of inflated expectation, anticipating 3DP to be fully adopted and productive within the next five to 10 years.3

    There will be technical limitations as to how advanced products and parts could be produced or even if they would be economically viable. Emerging applications such as biotechnology (e.g. teeth, bone, organ implants, etc.), however, are offering highly advanced tailored health care solutions and are already gaining steady attention suggesting that the 3DP applicability is advancing swiftly. Should 3DP technology succeed in evolving into this capability, the impact will be significant across many industries, including mining. In fact, recent press suggests that in particular the mining industry is literally taking 3DP to the next level by looking to use 3D printers to enable deep-space asteroid mining.

    Figure 2. Indicative evolution of three-dimensional printer price Source: Accenture analysis

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  • 53DP to support mining in space

    Newly formed Deep Space Industries (DSI) announced plans in January 2013 to launch a fleet of space-based mining exploration leveraging 3DP technology. Prospecting trips will begin in 2015, launching spacecraft to search for space rocks that can be harvested for precious metals such as platinum and other resources.

    The company will rely on a patent-pending 3DP technology to help manufacture metal parts in space from pure asteroid that can then be used in the manufacturing of space habitats, platforms and satellites.4

  • While the hype is exciting and the impact in other industries has been significant, the characteristics of a mining operation mean that there are a number of barriers that 3DP must overcome in order to make a meaningful impact.

    First, and most important, product safety and quality features must be proven. Second, suppliers, both international and local, must buy in and have both the capability and desire to enable production in situ. Third, the economic case must be robust: the cost of production at mine site, including equipment, labor and raw materials, must be lower than for shipped goods.

    As with all evolving technologies, there are practical difficulties, also. While a good proportion of items used in mining are relatively simple and generic, many still are precision engineered in order to be able to withstand significant loads and challenging environments. Although production of items made of multiple materials, or composites, has become

    technically feasible, 3DP remains relatively unproven for precision-engineered parts. Furthermore, many spares required for key pieces of mining equipment are proprietary to and supplied by original equipment manufacturers (OEMs) and, as in many sectors, there are likely to be concerns in ceding control of final production to customers with potential implications for equipment warranty. At the same time, the cost of such parts is significant and dependency to the OEMs can become high.

    There are practical application limits within mining given the complex range and varying nature of inputs required. The illustrative analysis outlined in Figure 4 estimates the proportion of spend with third parties for which 3DP could

    apply today. As the diagram shows, the overall proportion is relatively low at five percent to 10 percent of spend. This low proportion is due to the fact that major expenditure is normally on material inputs (e.g., structural steel, concrete, process chemicals, etc.), equipment (trucks, conveyors, etc.), a variety of services (e.g., from shaft sinking to contract mining) and transport. The type of mine (underground vs. open pit) and type of alloy or output are also likely to impact the level of applicability as they demand different processes and equipment.

    However, it is important to recognize that the analysis tells only a partial story. First, it provides no visibility of potential usage by third-party contractors who often undertake a significant proportion of work using their own equipment as it is difficult to estimate this accurately in practice. Second, it focuses on whole life cost including capital projects to establish and expand operations, which therefore skews the impact away from ongoing operations, where the impact may be most significant due to the significant use of spare parts. Therefore, if 3DP techniques could be used to produce equipment relating to 15 percent to 20 percent of an operations ongoing run costs, then its contribution could be significant.

    Nevertheless, if technology continues to eat away at the barriers in a not-too-distant future, 3DP could provide some significant advantages in a mining environment. With high, fixed production costs of both equipment and labor any downtime is extremely costly, especially at points in the cycle where demand is high. In many cases, downtime and production stops are related to equipment parts failure. This situation can mean that very high transport or part costs can be incurred in order to replace parts at short notice, or that operations hold excess inventory to guard against the potential for such a situation, or both, significantly inflating working capital and operating costs.

    3DP at the coal face

    Figure 4. Conceptual estimate of the proportion of mining spend or inputs for which 3DP could be applicable Source: Accenture analysis

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  • 73DP has the potential to challenge the concept of economies of scale, and drive value in an era of scarcer resources, increased volatility and higher demand for flexibility and customization.

    So how would a mining operation look with an advanced 3DP capability?

    There are a number of features of 3DP that are relevant to mining companies and their supply chain and operations:

    On-demand and on-site

    Custom and replicable

    Leaner and greener

    These 3DP features could assist in reshaping mining supply chains and operations by significantly shrinking delivery lead times, removing excessive stock and complexity across the supply chain, impacting manufacturing, transportation, and service and location strategies.

    On-demand and on-site A core feature of 3DP is that it requires no tooling and no minimum batch size for ordering or manufacturing. This feature enables the potential for true on-demand supply chain management. The on-demand concept combined with the mobility of 3DPmaking products wherever and whenever requiredcould effectively enable insourcing manufacturing strategies for equipment and parts.

    For a mine site, where downtime is costly, the impact of 3DP on spares and service parts logistics could revolutionize the concept of parts availability and stock-keeping within the supply chains. At present, redundancies are built into the supply chains either by building physical stock on site, or by having logistic networks in place to enable parts to be dispatched in a short time frame and at high cost, to ensure machines are kept up and running.

    With an advanced 3DP capability available on site, operations in remote locations would only need access to a digital service parts library for production of a required part where and when needed. With spare parts stored digitally, warehousing and inventory costs would be reduced and the lengthy and expensive process of transporting parts to remote sites could be eliminated. As a result, the high cost associated with delivering critical parts long distances, many times by air, could be reduced significantly.

    New requirements to source and manage raw materials would emerge. Rather than sourcing finished goods, 3DP assumes availability of the required raw material. This material would typically be powders in bulk and thus more cost efficient to transport. Releasing cash tied up in finished goods inventory would also be significant considering the value of raw materials versus that of complex finished goods.

    The ability to produce on-demand and on-site would be particularly beneficial when setting up a new mine in a new locationwhere it is difficult to predict all of the restock points if conditions are different from those usually seen with different strains on spares. This possibility is also a potentially advantageous one in times of observed climate changes and increased weather volatility impacting the supply chain. 3DP would provide better ability to get the products on the ground should inclement conditions occur.

    With the growing adoption of an evolved 3DP across industries, the supply chains strategies and inventory policies of mining companies would likely need to be refreshed to optimize supply chain efficiency and operational effectiveness. As a result, stock-keeping could be further optimized across the supply chain postponing the need for purchasing or producing the finished good to the point at which it is required. Following the asteroid mining approach, imagine the opportunities that would open up if traditional miners were able to become self-supplied, sourcing required raw material locally and producing required material on site.

    The 3DP features and potential impact on mining operations

  • 8Custom and replicable Another key feature 3DP offers is the possibility to not only customize specific components, but also the potential to tailor the entire portfolio of equipment made available to an operation site for nearly no additional cost. With supporting technology it becomes very easy to make a digital copy of an existing physical object and replicate the item where needed. This capability brings advantages when applied both as responsive repair and ongoing preventive maintenance, in particular, in an offshore operation with a multiple site setup. In particular, the service strategy of an operation would be impacted as it brings an opportunity to centralize certain services across units.

    In the future with evolved 3DP technology, when a particular faulty part is logged, a central service center could locate a similar functioning part (either on site or elsewhere), and using a three dimensional scanning device, create a digital replica of the needed part and send the digital model with required raw material specification to the location requiring the part for production on site. The role of the service function would change as the diagnostic and design capability could be further centralized to serve more sites, whereas the on-site service function would focus on identifying, reproducing and replacing parts.

    3DP could enable a custom and yet flexible production setup, tailoring the entire portfolio of equipment that is made available to an operation site to support different mining conditions and the specific requirement. A mining site could have a limited set of physical

    products available on site initially with the possibility to produce required components or tooling as required from an existing digital library or to design required items to suit the actual conditions.

    As 3DP technology develops, there could even be a point in time where printers are actually fixed to machinery on site and print fixes directly onto components. With the increasing usage of predictive maintenance this capability would bring many new advantages. Not only would it provide a near-immediate custom part when required, but also offer application for extending product life spans by printing continuously onto base parts to counteract standard wear and tear.

    Leaner and greener3DP also enables a material- and energy-efficient approach throughout a products entire life cyclefrom design to production to in use to end of lifeall important stages in which to gain efficiencies for companies operating in remote locations.

    New design possibilities that would be prohibitively more expensive or impossible to produce with traditional manufacturing setups could be more achievable through 3DP. With 3DP, designs can be made lighter, smaller, and functionally more complex and efficient; advanced forms can be created even to the point of including moving parts. With the evolution of raw material available for 3DPand the right designit is likely products can be designed to last longer and operate more energy or fuel efficiently supporting a greener approach.

    When it comes to the actual production stage, traditional manufacturing techniques typically involve subtracting excessive material from solid objects, which basically entails waste of raw materials and energy. 3DP could potentially optimize material and energy utilization while only consuming the raw material required to build the final product. A mining business adopting 3DPeffectively insourcing manufacturing of certain product categories, equipment and partswould indirectly support a more sustainable approach through this rebalanced supply chain.

    As discussed previously, producing the right material where and when it is required presents opportunities to optimize stock levels and transportation and reduce the environmental impact.

    Furthermore, as 3DP technology and materials develop, with products coming to their end of their working life span, faulty and used parts could be regenerated if they can be decomposed and transformed back to the materials they were originally produced from. This raw material could be used for the production of new parts, thus enabling a self-sustainable approach that would mean a further reduction in material utilization and stock requirements.

  • 9Mining companies face ongoing challenges to bring required supply to the market. 3DP holds the potential to address industry-specific challengesespecially as the technology evolves over the next few years.

    Already, 3DP offers unique features including on-demand and on-site production capabilities, custom and replicable solutions, and a leaner approach throughout the entire product life cycle that can benefit mining companies.

    Adopting 3DPas it evolves as an emerging technology over the next few yearshas the potential of addressing mining specific challenges and brings multiple benefits:

    Reducing working capital through lower inventory levels of purchased material in the form of expensive finished goods, and building virtual inventories of material and equipment.

    Contributing to reducing the cost of inputs (and equipment in particular) through cheaper production of lighter, custom components that have a reduced total landed cost.

    Assisting in minimizing downtimes and the associated risk through on-demand and on-site production of critical spare parts.

    Consolidating certain service and design functions building centralized and more intelligent capabilities serving more sites, more efficiently and more effectively.

    Enabling more sustainable practices through reduction of material and energy waste during the entire life cycle of used material and products from design, manufacturing, transportation and to end of life.

    Many challenges to overcome with 3DP remain, however, to enable the potential benefits, including raw material development, speed of production, size of printing and sophistication of printed products. Yet, assuming the same pace and development as seen over the last several years in the industry and across other similar technology booms, such as with personal computers and the Internet, 3DP is likely to advance into producing ever-refined products at both a larger scale and in highly complex materials.

    Regardless of the maturity of 3DP, it is here to stay and is likely to change the way products are distributed and made available across the supply chain. When refreshing global operations and supply chain management strategies, mining companies should consider the opportunities and address associated challenges that 3DP, as a dynamic disruptive technology, brings.

    Conclusion

  • 10

  • About the authorsAndrew Brimacombe is a senior manager in Accenture Operations Management Consulting. He has more than 11 years of sourcing and procurement and supply chain consulting experience. Andrew has worked extensively with mining and other process industry clients including oil and gas and steel. He has led a number of global transformation programs to deliver significant financial and capability improvements. Based in London, he can be reached at [email protected].

    Henrik Axelsson is a senior manager in Accenture Management Consultings Operations group. He specializes in innovation and product development, bringing more than a decade of experience from industry and consulting. During his career, Henrik has worked with global clients across industries helping transform their go-to-market strategies, supply chain capabilities and processes through innovation. Based in London, he can be reached at [email protected].

    About AccentureAccenture is a global management consulting, technology services and outsourcing company, with approximately 261,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the worlds most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page is www.accenture.com.

    If you have a QR reader installed on your smartphone, simply scan this code to be taken directly to the Accenture Mining page: www.accenture.com/mining

    References1. Note: Fused Deposition Modeling and

    its abbreviation FDM are registered trademarks of Stratasys Inc.

    2. Titanium F1 Roll Hoop proves concept, 3T RPD Ltd., http://www.3trpd.co.uk/case-studies/titanium-f1-roll-hoop-proves-concept.htm.

    3. Gartners 2012 Hype Cycle for Emerging Technologies Identifies Tipping Point Technologies That Will Unlock Long-Awaited Technology Scenarios, Gartner, 16 August 2012, www.gartner.com.

    4. New Asteroid-Mining Venture Aims to Launch Probes by 2015, PC Magazine, 22 January 2013, http://global.factiva.com.

    13-1722 / 11-6486

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