Cost Management in the New Product Introduction Process of TruPrint 1000; A case-study of TRUMPF Maskin AB and its costs of Introducing New Additive Manufacturing Systems to the Swedish Market

Abstract: The current trend within the manufacturing industry is increased digitalization, automation, and customization, known as Industry 4.0 or the Fourth Industrial Revolution. Additive Manufacturing (AM), also known as 3D printing (3DP) can be considered as one spark of Industry 4.0. AM technologies can be applied to a wide range of industries, from manufacturing of steel and metal products to paper and plastic products (Gao et.al, 2015, Thompson et.al, 2016). Their flexibility and speed enables mass customization of products that can have virtually any geometric shape. Products with new complex shapes can be manufacture in one machine and in one-step process which enables fast processing. Furthermore, AM technologies surpass conventional techniques both in terms of low costs and high functionality when used to produce customized and complex products (Theisse et.al, 2015). For example, AM have realized significant cost savings in the aerospace industry by enabling new lightweight components and enhanced features. Thus, 3DPs are highly accommodated for a pull-based, mass customized, decentralized and interactive manufacturing which Industry 4.0. partly aims for (Lasi et.al., 2014). However, demands on these new technologies impose new costs to AM providers, especially in the New Product Development (NPD) process and New Product Introduction (NPI) process. To improve the planning of the NPI process, and as a consequence, help the decision-making process of resource allocation and investments, costs need to be estimated and allocated. Hence, metrics needs to be developed that can support the strategic management and process improvement in the NPI process. TRUMPF Group is one of the leading developers and suppliers of advanced technologies for industrial application and manufacturing. It offers a wide range of technologies and services to manufacturers, allowing them to take advantage of current trends in the manufacturing industry. Among its latest innovations are the 3D printers: TruPrint Series used for industrial application. This product group was announced in 2015 as part of TRUMPF product portfolio and among the products was TruPrint 1000 which can realize many benefits for the metal industry (TRUMPF.com, 2015). However, the development and introduction of new technologies and products affect a company’s cost structure spanning from R&D facilities to Strategic Business Units (SBUs). TRUMPF Maskin AB is one of its SBUs responsible for the NPI process to the Scandinavian market. Examples of activities included in this process are marketing, machine-sales, technical support, logistics and after sales services. New products require both internal and external customer training. Internal customers demand product information and resources to enable and optimize the NPI process. The external customer needs education of how to exploit the opportunities of the new products. Thus, new metrics and cost models are necessary that measure the cost of activities in the NPI process, supports strategic planning and enables improvement of these activities. “If you don’t measure it, you can’t manage it” This thesis examines the cost of activities in the introduction of the metal 3D-printer TruPrint 1000 from TRUMPF Group to the Scandinavian market and analyzes:  The activities in the new product introduction process in TRUMPF Maskin AB, with emphasis on the metal 3D printer TruPrint 1000. The activities are identified and included in a process map.  NPI metrics and time-driven activity based costing (TDABC) are used for developing a novel cost model for the NPI process. This cost model aims to be used as framework in which all costs can be recorded and allocated or apportioned to the activities involved in the NPI process of TruPrint 1000 and similar technologies, supporting strategic management and process improvement.  How the costs affect the business performance of TRUMPF Maskin AB.  Contribution margin for TruPrint 1000. The new product introduction process is used as a synonym to the New product introduction process. These processes look different depending on firm characteristics and context. The new product introduction process is for this study categorized into four activity centers in which related activities in the NPI process takes place: 1. The laser-machine sales department (new product documentation, NPI process development, new product training, new product project management, negotiations, contracting and sales), 2. The marketing department (new product promotion, advertisement, new product event planning and coordination, customer contact, customer relationship management etc.), 3. The after sales services department (new product service and material preparation, technical support training, maintenance training, installation training, customer education services, spare-parts administration, product enhancements, service level management etc.), 4. And the Tech-Days/new product show event.