RISK
FUTURES:
3D PRINTING
The universe
in 3D
Photo: NASA
Imagine being miles out at sea on an oil rig or even in space,
and in urgent need of a spare part. Well, the solution to such
problems may soon be that you just simply print one off.
However, such innovative technology brings a number of risk
and liability challenges...
STUART COLLINS
It sounds like science fiction, but this is the likely shape
of things to come. NASA has been testing 3D printing
technology on the International Space Station as a first
step towards establishing an on-demand machine
shop in space. Meanwhile, the US navy and shipping
company Maersk are both separately looking to 3D
printing to produce spare parts for vessels while at sea.
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Growing application
3D printing is being hailed as a revolution in
manufacturing, offering a faster, cheaper way of
producing bespoke products. And its acceptance is
accelerating. Wohler Associates believes that the 3D
printing industry will grow to $10.8bn by 2021 from
around $2.2bn in 2012.
“Companies must understand the effect of
customization of their products and who is
responsible when it comes to liability”
RISK
FUTURES:
3D PRINTING
NASA has been testing 3D printing technology on the International Space Station.
The technology is now widely used, especially for
creating prototypes and bespoke parts in industries
like aviation, automotive and the medical sector.
Components made by 3D printers already feature in
jet airliners, race cars and rocket engines. 3D printers
are also being used to make surgical implants and
prosthetic limbs, while bio-printing can even create
human tissue.
“3D printing is market-ready. It is now regularly used in
the design and prototype phase, but over the next five
to 10 years we will see the technology make its way into
wider manufacturing and push further down into the
value chain,” explains Michael Bruch, Head of Research
& Development at AGCS.
A new dimension
As commercial 3D printing increasingly moves into
mainstream manufacturing, organizations will have
to address a number of evolving risks, most notably
around product liability, intellectual property and data.
“The implications of 3D printing, as applied in
industries like aviation or for developing prototypes, are
manageable,” says Juergen Weichert, Liability Expert
at AGCS. “However, as the technology evolves and
becomes a greater part of the supply chain, product
liability could become more complex, while the
increased reliance on data will be a new challenge for
manufacturers,” he says.
Printing a new liability landscape
Should a product prove faulty, who is liable will
depend on who is producing and selling the product.
For example, if a company uses 3D printing to
make prototypes, or even components for use in its
own products, there will be little change, Weichert
explains.
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RISK
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3D PRINTING
Photo: Shutterstock
3D printing technology is now widely used – from making plastic moulds to even creating rocket engines.
However, liability would be less clear where processes
are split, such as where one company produces a
component for use in another’s product, or where
one firm provides the design, another the 3D
manufacturing, and another the distribution.
Apportioning liability could become even
more challenging as new business models
emerge – for example, online platforms
3D printing is
have been established for people to
reducing repair
share designs that users can customize
times on some
and then print. “Companies will need to
turbines by 90%
understand the effect of customization of
their products and who is responsible for
that customization when it comes to liability,” Weichert says.
DID YOU KNOW?
Testing times
In addition to who is liable, companies will also have
to consider the implications of 3D printing for product
quality control and traceability.
As companies start to use 3D printing in manufacturing
there will be many questions around the testing of
products. In aviation, each component must be checked
to make sure it is fit for purpose. However, this will not be
common practice in most other sectors, Weichert explains.
“There are many potential grey areas, such as the subtle
differences between prototypes and a mass produced
product. However, no matter how a product or component
is produced, it must be shown to be fit for purpose,” he says.
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will need to be answered when a company is seeking to
purchase product liability insurance,” Weichert explains.
Insurance implications
Insurance policies most effected by the development of
3D printing will be product liability and product recall,
although there are also implications for general liability,
errors’ and omissions’, directors’ and officers’, workers’
compensation, as well as cyber insurance.
However, insurance products are already doing a good job
of covering the existing use of 3D printing, according to
Weichert. “From an insurer’s perspective, the legal framework
is already in place to deal with product liability and recalls, and
there are no real issues for underwriters when it comes to low
volume production with sufficient quality control,” he notes.
However, insurers will have to keep an eye on how the
materials used in 3D printing perform in the longterm. For example, products made on 3D printers use
new materials, new techniques, and are used in new
applications, all of which are untested over time.
There could also be wider implications for business
interruption insurance, both positive and negative. For
example, 3D printing could play a positive role in addressing
rising business interruption exposures, but it could also
make it harder to trace products through the supply chain.
3D printing will enable manufacturers to produce
personalized or customized products – which raises
the question as to whether each individual product will
need to be tested.
“The application of 3D printing could have important
ramifications for the supply chain, although how this may
pan out is still unclear,” says Bruch. “On the one hand,
it could reduce an over-reliance on key suppliers and
bring down the time and cost of providing replacement
parts. On the other hand it could add complexity to some
supply chains and make it harder to trace faults.”
“Will every part be considered bespoke or a mass
product? These are just the kind of key questions that
Risk management review
While insurance coverage does not have to be an
RISK
FUTURES:
3D PRINTING
issue, companies will need to review risk management
processes and show underwriters that they have
addressed key issues, such as maintaining quality
control, advises Weichert.
For more information
visit www.agcs.allianz.
com/risk-consulting/
special-emergingrisks/
The introduction of 3D printing in a well risk
managed industry like the aerospace industry
– where components are continually checked
– is relatively straightforward. Even in other
sectors, like the automotive industry, existing
processes could easily be adapted to meet the
challenges of 3D printing, Weichert says.
However, companies should review their
processes and quality control as they expand
the use of 3D printing. “It’s not really a question of
insurance, but a question of showing that a product is
fit for purpose,” says Weichert.
“It is important to challenge your own risk
management and processes,” says Bruch. “Supply
chain and product safety are part of day-to-day risk
management but you need to challenge them again
and again,” he concludes.
MICHAEL BRUCH
Head of Research & Development, AGCS
[email protected]
JUERGEN WEICHERT
Liability Expert, AGCS
[email protected]
A viable alternative to conventional manufacturing? Not just yet…
As the name suggests 3D printing, also known as
additive manufacturing, creates three-dimensional
objects from a digital design. The printers – which
range from desktop for home use to large high-tech
machines for industry – extrude layers of material,
adding layer upon layer to form a three-dimensional
object.
Advances in 3D printer technology are enabling
manufacturers to more easily produce customized
or complex products, often doing so much quicker
and cheaper than before. For example, aircraft maker
Boeing already produces some 300 airplane parts on
3D printers, at a reported 25% to 50% saving per unit.
Meanwhile, Siemens is reducing repair times on some
turbines by as much as 90% by printing 3D parts.
According to McKinsey, the falling cost of 3D printers
and technological advancements have bought the
technology to a tipping point, which will see it now
emerge from its niche status and become a viable
alternative to conventional manufacturing processes.
The economic implications of such a move are
significant. Benefits like improved production
methods and reduced waste could have a positive
economic impact of up to $550bn a year by 2025.
Some see 3D printing as a disruptive technology
that could really shake up manufacturing. “Why
over-produce parts in factories hundreds or
even thousands of miles away that can be made
on demand, closer to home, using additive
manufacturing technologies,” asks Michael Bruch,
Head of Research & Development, AGCS.
“3D will represent a big change for industry, but not
just quite yet. There are specific applications, like
in the aviation industry where there have been big
steps forward and where we already see the impact
of 3D printing. However, economies of scale mean
that mass manufacturing is likely to continue along
similar lines for many more years to come, although
3D printing will have a role in improving these
traditional modes of manufacturing,” he says.
3D printing should also not be seen in isolation – its
development is linked to those in material sciences,
bio-science nanotechnology, big data, scanning and
the emergence of smart machines and factories. For
example, there is now talk of 4D printing which uses
advance materials that change shape or properties
to suit their environment – such as pipes that change
according to pressure or sports shoes that change
shape in response to how they are being used.
“3D printing is truly a game-changing technology
that will have an important place in the evolving
manufacturing landscape,” says Bruch. “Big change is
certainly on the way, although maybe not as rapidly as
some are predicting. But, as the technology becomes
more economically-viable, and more versatile, then
the automotive, aviation, white-goods, architectural
and arts industries will likely be irrevocably changed,”
he concludes.
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