I'm a big fan of 3D Printing, and have been ever since seeing the Replicator on Star Trek! So, when I heard that one of the Ivaldi, one of the startup companies in the SAP.io New York Foundry was in the 3D Printing space, I was very keen to chat with them.
Espen Sivertsen, the CEO of Ivaldi, graciously agreed to come on the show and we had a fantastic chat about how Ivaldi is helping organisations digitise their inventory (and we got to hear from his 3 year old daughter!).
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It starts with the part which parts are affected, which parts can you go digital with and then you are using those parts around the world and what's the business case? And that's what their software does, is answer those questions for people.Tom Raftery:
Good morning, good afternoon or good evening, wherever you are in the world, this is the Digital Supply chain podcast, the number one podcast focussing on the digitisation of Supply chain. And I'm your host, Global vice president of SAP, Tom Raftery. Hi, everyone. Welcome to the Digital Supply chain podcast. My name is Tom Raftery with SAP' and with me on the show today, I have my special guest, Espen. Espen, would you like to introduce yourself?Espen Sivertsen:
Hi, Tom, hi Everyone. I'm Espen I'm the CEO of Ivaldi group, founder, chief troublemaker. And basically what we do is we help companies send thousands of parts. So digitising aftermarket spare parts, putting them in the cloud and then 3D printing them locally through a collaborative network of local On-Demand manufacturing places.Tom Raftery:
Superb. Superb. So a couple of things before we get into that Espen is we should say that you guys are in the SAP.io Start-Up Foundry. Do you want to talk about that? First of all, what it is and how you got into it?Espen Sivertsen:
Yeah, no, we're super happy to be an accepted. I know that that's something that a lot of companies in our position want to be. And we were lucky enough this year to be part of the New York foundry team. And we're about a month or so into it now. It's pretty intense programme, very diverse this year, focussed on automotive manufacturing and a lot of covid related issues, of course, in the supply chain this year. So we're part of that batch and it's been a lot of fun so far. We're meeting a lot of people at as SAP, getting a lot of really great introductions and getting help to navigate what is otherwise quite a large company. Sure. With a lot of things going on. So that's been very helpful for us as well.Tom Raftery:
Yeah, that's what I'm going to ask because a lot of people don't associate as SAP with start-ups. So what is it that you're getting from the SAP.io Foundry that you couldn't get otherwise?Espen Sivertsen:
Yeah, there's a couple of different things. So this is sort of non-equity an on investment accelerator, which right off the bat that says a lot about SAP priorities right there, because there are a lot of companies that kind of. Take advantage,.Tom Raftery:
They're not called vulture capitalists for nothing, right?Espen Sivertsen:
Yeah, so so so that's been very useful. But what we get out of it is essentially some real help to understand a SAP's business, landscape and ecosystem connected to it in a much more Hands-On way than if we were just to go to that store and try to connect them there. And from this point of view, we're small 12 person team based out to California and some scattering across the US and the rest of the world. But with such a small team and it's kind of hard to navigate large companies in general, and particularly when you're trying to figure out your own role. And a very large ecosystem can be very useful to have some adults in the room to kind of tell us what we've done this before and this works. Here's how we were navigating kind of the not just the the external customer relationships. We've done that in the past by ourselves, but also the internal relationships. How do you create value for SAP? How do you create value for the other partners in the ecosystem, account executives? And so and honestly, what we didn't expect, which we're getting out to the programme, is just a masterclass in everything from pricing to selling to all of the different aspects where we get to have, you know, really help people in their field at SAP come in and tell us what they do, which is amazing.Tom Raftery:
Excellent, excellent. And OK, what is it that you do? Because you mentioned at the start through 3D printing, additive manufacturing, that that's a a growing space. I have to think. I know, for example, that here in Spain we have several big Airbus plants and they do 3D printing of aeroplane components. And where do you fit into that ecosystem? 3D printing?Espen Sivertsen:
Yeah, I mean, look, 3D printing isn't the new technology. It's been around since the early 80s. And what's happened in the last couple of years is some of the IP expired back in 2012, which started bringing a lot more companies into play. And as a consequence, the prices started going down. And then as a consequence of that, more tooling and more more sort of on the production systems, material costs and so on has gone down so steadily since really 2012. We've seen prices go down in the space pretty dramatically. And our role in it is really as a technology partner. We started the company in after having spent almost a decade building desktop 3D printers and stuff is sort of the first wave of this. We started the company in twenty and the twenty, sixteen, early twenty seventeen really with a question which was how is this going to affect Supply chain? And you know, because it's not just 3D printing, it's all production. Robotics are just getting faster, better and cheaper all the time. And we spent the last couple of years trying to answer that question. So and we've been scouring in the Japanese manufacturing plants. We've crawled through engine rooms on vessels. We've been literally dumpster diving in Norway construction sites to see what they threw away, really trying to understand not just the procurement part, but also what happens to parts afterwards. Because one of the things that we can do with with the modern manufacturing, of course, is do local recycling as well, which is good for the planet. So so we're seeing across the board now increasingly the perspective of parts becomes such that it's now it's now feasible to actually print locally and store parts in the cloud rather than do what's being done at the moment, which is centralised manufacturing, where you have minimum order quantities and the fact that typically China or elsewhere, that's mass manufactured goods. And then the classic Supply chain challenge is how to get parts around the world. So we're flipping up on the set and focussing on and usage printing locally. And that opens up a whole new bunch of opportunities and challenges that I'm sure we'll talk more about.Tom Raftery:
Sure. Yeah, of course. I guess one concern people might have about 3D printing is, I mean, we've all seen the images of them 3D printing parts in the International Space Station, and that's phenomenal. But, you know, you can't 3D print an iPhone, for example. And so there is there is some components that lend themselves to it. Others that don't buy it because of complexity or because of the materials used or a mix of both. How does that so how does that affect you guys, where how do you solve that?Espen Sivertsen:
Yes, that's one of the big takeaways we've had from last couple of years, right is you can't 3D print everything. You manufacture everything on the mountain, nor should you. It's not cost effective and it's not necessarily good for the environment either. So. So the way to think about that is there's an increasing number of particularly plastic and metal parts in your spare parts inventory that for various different reasons, ranging from end of life time challenges to distribution challenges to at risk challenges around being vulnerable and their supply chain and so on, that it might be more cost effective to put it into the cloud than print locally. And what it really does is will connect into your procurement data sets and supply chain data and then using our own machine learning and sort of natural language processing tool kit and big data sets there, we will essentially be able to tell you with a high degree of confidence, which parts are good candidates for digital distribution and what the business case is. So we really help you answer two questions. One is what can be printed and two is what should be printed. And the second question is more important than the first one from a procurement and particularly a cost point of view.Tom Raftery:
OK, so you're doing an analysis of what people have or what people purchase and then telling them what they shouldn't.Espen Sivertsen:
Yeah, yeah, pretty much. Yes. So well that we kind of flip it around. So we'll give you real time intelligence on your on your procurement situation because it's changing on an ongoing basis. And then you can choose which parts, given our recommendations you don't want to digitise. And depending on the company and the setup, they may choose to take that themselves and go digitise it. Or they can work with our team who are experienced now in a range of industries, from automotive to mining to maritime, where we will be able to make sure that parts are compliant in terms of qualification, quality control, certification and so on, and then link in to local distribution networks that are capable of producing parts on demand and the cost effective and quality controlled manner.Tom Raftery:
OK, so that because that was going to be my next question, how do you know that the 3D printed part, whether it's a spoon or a spanner or whatever it is, how do you know it's as good as the original?Espen Sivertsen:
Yeah, that's the that's that's a great question. So because, you know, with any new technology, there's a whole bunch of misses. And what we've spent a lot of time, actually two and a half years on is working with cost authorities. And we started off in the maritime and offshore space. So we've been working with some very big companies there to put in guidelines for how to answer that question. How do you know? And the answer is you have to certify the materials. You have to certify the equipment. You have to certify the operator. You have to certify the entire manufacturing toolchain and have checks and balances the whole way through. And then when you actually print the part, depending on the level of criticality, you may do additional testing on the part or on, you know, Doug Burns are copies of the part locally in order to verify that that is indeed up to spec and capable of doing what it does. And depending on the business case, that can actually be quite cost effective, because really what it comes down to is, you know, what are the costs of the alternatives. And so for for a lot of companies, the alternative right now is having a whole bunch of parts inventory physically on site. There's a lot of capital tied up into that. And then once in a while, typically, it's what you didn't expect that that scrutiny over. And so once in a while, there's a part that they didn't plan for, maybe because it's not even in the original manual or really listed. And and now you need that partner to keep your equipment up and running. And that downtime can be really, really expensive. So that's where on the manufacturing can really kick into gear and help you, provided you've done some certification work in advance, you're ready to do that type of category. But if you have done that work, then you can really change uptime or unscheduled maintenance time from typically several days. If you had to fly in the part or at least twenty four hours to just a couple of hours or even minutes, depending on the size of the part.Tom Raftery:
Yeah, that was another thing I was going to ask is I guess it depends on on the printer and it depends on the part. I was going to say how long does it take to to print a 3D part? But that's I guess that's like how long is a piece of string really, isn't it?Espen Sivertsen:
Yeah, unfortunately, we're not quite there. It's the Star Trek replicator that I think a lot of people back in twenty fifteen thought it would be and then disappointed when it wasn't. But but it's at all. But like any tool, it takes anything from minutes to hours to even days if you're printing something really large, but what really matters is what's the alternative? So if you're competing with FedEx and looking at getting it apart from, say, Rotterdam to Singapore and fighting it, we did the maths on this for for for a part we had to send. So therefore, you're still looking at two to three days because you have to get it to the airport and plane has to take off and you have to get through customs and so on. And it'll cost you easily one hundred and thirty bucks to just get it through the through the system used. But if you send it digitally well in this case, the part I think something like nine hours and and it cost us a fraction of that. There is no transportation cost. You're just paying for the part up front. And importantly, we saved about 90 percent plus on the emissions because you're not spending any CO2 other than server time transporting the part. And it really is is quite significant in terms of what you're doing. I think for for this particular part, too, with something like seven kilos of CO2 by air freight versus 20 grams of CO2 digitally. Right. Well, so what's the future of logistics if you can hit the price points? I think sending thousands of parts, which is kind of what we do in the future.Tom Raftery:
OK, and that's a good point. Hitting price points because are there any particular parts that lend themselves specifically to this kind of distribution as opposed to others which specifically don't?Espen Sivertsen:
Oh, yeah, for sure. So parts with complex internal geometries or complex geometries in general are typically easier to to manufacture using 3D printing. There's also parts that you can combine. And so partly because of complexity is again and traditional manufacturing, you may have a component or a pump or something that consists of twenty one, twenty three different pieces. But then with 3D printing, it actually combined quite a few of them. So you end up with maybe four or five pieces and then there's less that can go wrong with the pump as well, which is kind of interesting. So so, you know, there's all kinds of different things on the new design side that a lot of people are doing. But look, there's not just about 3D printing and milling. It's about injection buildings. About doing all these things in a local regional capacity is never going to fully replace full assembly plants. Sure, you still need that to some extent. But I think the on demand aspect is going to move up the toolchain very rapidly. And we're really seeing that in factories as well. Right. They're starting to mass customised more and more. But you still have the challenge of getting the part from wherever it was made to the end user and for an increasing number of business cases is just cheaper to put in local production facility, which is great. And everyone loves being able to bring manufacturing back locally, regardless of where in the world you are, except for maybe the big FedExes of the countries that are doing mass manufacturing today. But I think overall for the world, that's something that we believe will be a good thing and that that totally opens up some new opportunities if you're an OEM today. Pretty much all of your responses and the ability to construct your business is tied into your existing supply chain. So if some if a user in the field has a request or design request, you may have ten thousand parts in your inventory. Can I have to go through some cost efficiency point of view before you can really update your designs? But we don't demand manufacturing. That's no longer the case. And so it's really, if you think about it from from kind of a supply chain point of view, if supply chain today is centralised around the fabrication challenge of getting parts from A to Z. Supply chain going digital can be centralised around the user needs, and then why would you replace a broken part with the exact same part anymore? Why wouldn't you upgrade all that and actually look at the equipment as much more of an ongoing evolving piece of machinery that can get more cost efficient, more environmentally friendly, you know, faster, whatever it is that the end user needs rather than one design fits all, which is the case today.Tom Raftery:
Sure, sure. You mentioned as well that some of the savings were in in that particular example going from I think it was London to Singapore. You said at the some of the savings were in customs duties because obviously that's going to be an interesting one, isn't it? I mean, you you send a physical item. It has to go through customs. You email the same item. Not so much.Espen Sivertsen:
Yeah. So so that's an interesting one. We we looked at that a little bit and from Norway originally and actually been talking to some of the delegations visiting us in the Bay Area. They typically come over once in a while to to learn about new tech, new developments. And of course, in Norway, you a value added tax. So if you print things locally in Norway. The value added tax bill will actually probably be more of a net positive for Norway in terms of what Norway exports is primarily minerals and oil and the stuff that you're not going to see different anytime soon. But then you look at the place like Denmark, which is another country I'm fairly familiar with, and they today have a lot of one of the big experts is, is meat. Of course, are more pigs in Denmark than there are people. And I like to tease my friends with that. What it comes down to is if you're able to do local manufacturing, there's a whole bunch of companies like Memphis Meats and Impossible Foods and so on, that they're looking at being able to create essentially meat like products that are increasingly taking over parts of the supply chain. What's interesting here is one night there's a case again for local on them, on manufacturing increasingly, and that may have significant impact on imports and exports in Denmark. Say England's going through a Brexit situation right now, which is or Britain, I should say, which is again causing some pretty big issues on the borders. And so I think it's one of those issues where we haven't really quite figured out what the complicated consequences of this are going to be. But I think we have an inclination, just looking at what's happened in the movie industry and the music industry in terms of them going digital with the challenges before being physical record sales and then the business model of this being flipped on its head with the advent of the iPod and Napster and all of these other solutions.Tom Raftery:
OK, cool, cool. You mentioned as well, if I remember correctly, you mentioned mining, automotive and Marine. Are those the industries that you have identified as the best candidates? Or they just ones you happen to fall into or are there other industries that you think are also ideal candidates? Or? Dot, dot, dot.Espen Sivertsen:
I mean, there's a bunch say if you look at 3D printing in particular, which is our sort of where we stem from, typically automotive, aerospace, medical have been kind of the classic spaces and primarily prototyping. But as costs have gone down, we believe there are a couple of other industries that are increasingly open up. So we focussed in on heavy industry. And really, when you think about it, if you're printing an impeller pump or engine components, if you can do that for one industry observer, you can do it for other industries as well. But you have to understand the particulars of that industry in terms of their supply chain regulations and so on. And so we're focussed in fairly narrowly to begin with. So for us, it's maritime offshore activities, mining and automotive that we've started out into. And now and we really only started with maritime. We've just been sort of pulled into some of these other spaces now that we're starting to get a handle on some of those. We're also looking at other energy activities. So gas turbine power plants and so on. But but really, it starts with the part which parts are cost effective, which parts can you go digital with? And then who are using those parts around the world? What's the business case? And that's what our software does, is answer those questions for people. And there are really three steps that you have to figure out. First, what's the business case? What parts in my inventory can be taken digital? Then you have to actually take them digital. So it's not just enough to have a 3D file. You have to have what we call a performance envelope, understanding the sort of boundary requirements of the park. What are the qualifications, the quality control aspects, mechanical, chemical, environment departments to operate then what are the equivalent materials you're going to be using, the equipment you're going to be using all that stuff. And then the final step is actual implementation of a distributed manufacturing chain. So that's where we come in. We can help you with tailored solution, either with existing facilities or if you are out in the middle of nowhere and you need your own facility in your own warehouse, we can make recommendations and help you set up local on demand capabilities and upgrade to training and so on your inside. And that's once you have that, then you're then you're ready to go. Nice. But it takes a little bit to get there. And it's kind of cool is it's happening faster and faster because we're doing it more and more now. OK, and so this is where it gets interesting is we're now looking at cases where you may save multi million dollars at the single site. And then once you've figured out how to do that, now you can do it for all the other sites around the world. And that's just across the couple. Categories of parts, so it's very interesting for us, you know, it's been a sort of slow build up to the point where I think we've kind of figured out now what the Supply chain may look like. We're still figuring out the whole bunch of stuff. But at the end of the day, it comes down to is, can these parts be printed? Can they be certified? Can they be quality control? And with all of that, is it cost effective to go digital? The answer now is yes for a growing number of parts.Tom Raftery:
OK, and where to from here? Because, OK, you've gotten to where you are today, but what's the kind of five, 10 year plan and where is 3-D printing going in the next five, 10 years? Because it's come on leaps and bounds. The last eight years will say since. Twenty twelve.Espen Sivertsen:
Yeah, that's a great question. It's a great questions today. I'm sorry about that. I spent a lot of time thinking about this. Right. At the risk of geeking out this year, where next can as a couple of different levels. But just to to begin with the broad strokes. So today here in the US, at least, if I want to order something for my fridge or for my home, I can just go online that can place in order to be there the next day at the latest. A lot of the time, particularly here in the Bay Area, is just super fast. So if if I'm in heavy industry today, I can't do that. You're typically looking at four to six week lead times for anything you order, and it's quite a slow process. They may have the part locally. It depends on where you are in the world, but it's not unusual to have four to six week lead times quite the across heavy industry. And so there's just a disconnect between what people are experiencing on the consumer side and what people are experiencing in heavy industry. So that needs to change. And then the other thing I think is if you think about it from Supply chain point of view. Going on demand mass customisation, it has some challenges and we can dig into how to certify parts and connect in a whole bunch of different parts that are evolving, we have toolkits for that with a look about how to do that. But really, once you're able to do that and you can optimise for the end user case environmentally in terms of safety, in terms of efficiency on site, things change very rapidly. And spent so much time in the field the last couple of years just talking to engineers, the chief engineers, mechanics, people doing replacement services. And they're all frustrated to some extent by slow supply chains or an inability to get things exactly the way they want. And they're not even used it. They're not even used to. Really talking to the OEM and having a relationship in terms of evolving the design. Today, if you're doing this in heavy industry, that's kind of unusual. You're part of some in a programme. That's my daughter in the background.Tom Raftery:
OK, we're all working from home.Espen Sivertsen:
It's the joys of having a three year old.Tom Raftery:
That's fine. I've lived through that period as well. I have two boys who are now 14 and 17. That brings a whole other range of problems. So.Espen Sivertsen:
Oh, yeah, but, you know, I'm actually going to say working from home with my daughter has been one of the best things this year. It's just absolutely amazing to be able to to to have a digital workforce like this. And, you know, actually bringing it back to what we're doing right now. Going digital is happening in all aspects of life right now. And it can be really, really positive thing, but it has to be managed. Right. And I think one of our concerns is a lot of people, particularly in the heavy industry, looked at 3D printing back in twenty, fourteen, twenty fifteen. And they went like it's too expensive or it doesn't hit their quality. And so they sort of discarded it. And, you know, it's come a long way since then and it's still moving very rapidly. Sure. And what it comes down to for us, you know, if you look forward five or 10 years production robotics is just going to get faster, better, cheaper. And so it's really only a matter of the business case as to when you go digital with their inventory is going to be pretty much a no brainer for for new parts. I think to have it digital, you may still choose to do on demand at your centralised production facility for some parts. But then increasingly, Will says tooling gets cheaper. You're going to want to move it further afield and into kind of the the localised space. And it just gives you a lot more flexibility. It gives you a lot more sort of power in terms of speed. And the environmental impact is also very, very positive.Tom Raftery:
You mentioned sustainability and environmental impact a number of times. You refer to the reduction in CO2 of shipping that part versus printing that part. Obviously, sustainability is something that you think a lot about. But can you can you talk to some of the sustainability advantages of 3D printing parts? I mean, they might be obvious to you and I, but maybe not to some of the people who are listening.Espen Sivertsen:
Yeah, right. So there's a couple of different things about that. One is, if you think about it purely from a transportation point of view, if you're printing parts locally, particularly using recycled materials, which is increasingly feasible, you're able to take away a whole bunch of transportation costs and also a lot of transportation emissions. So that's one of the major savings. And the second one is, which is something I'm quite excited about, is the ability of On-Demand tools. Again, just three different things like hybrid, CNG, milling and so on. They can go and you can take an old car and you can maybe cut out the part that's broken and then just print directly on the part to fix it to refurbishment cases. Or you can melt down the parts and then have three different modes locally that you use costing, for instance. And so depending on the materials and depending on the part, there's actually a whole bunch of things you can do that bring that part more cost effectively locally and therefore save a lot of transportation emissions. But I mean, we're talking at various estimates out about something like seven percent of global emissions could easily be picked up by going digital on on this sort of space. So it's quite significant on the part by part basis as well, being able to involve departure other than scrap it. I think that's a really, really interesting case, because if you look at particularly in maritime and heavy industries, equipment lasts for 15, 20, 30 years. That is late term. Average lifetime of a vessel is twenty four years right now. So you can imagine one by the end of its lifetime. The OEMs may not even be around anymore. Or if they are, they certainly don't want to be replaced, putting out those same parts. And so if you give both the OEM and the end users the ability to evolve their equipment and do retrofits, do things that you can't do today in a cost effective manner, we're looking at them much more rapidly and more sustainable sort of movement towards lower energy, lower emission output and higher efficiencies.Tom Raftery:
Right, the 3D printed component could be better than the original. That's I mean, that's something that a lot of people don't necessarily grok up front. And I love the idea of using recycled materials to 3D print because I can't remember who said it, but I remember a quote from somebody saying that it's only waste, if you waste it. And of course, you know, right there, right there, it's that's it. We are well over the 20 minutes at this point, Espen. So thank you for that. Is there anything that I've not asked you that you think I should have or any points we've not touched on that you think people should be aware of?Espen Sivertsen:
No. I mean, I think the only thing that that's worth mentioning is just the impact on people that this can have as well. So, you know, if you go to a local manufacturing, it opens up a whole new opportunity in terms of local entrepreneurship, getting connected into global distributed manufacturing toolchain that otherwise isn't really available today. And for big companies and small communities, you know, one of the big things for them is maintaining good local relationships. And one of the ways to do that is to create avenues of opportunities for that, you know, for the people who are local. So this is a really great way of doing it. And I think one of the things that keeps me the most hopeful about this is actually in many ways, it could be a grassroots resurgence of innovation as well, not just for the parts that you're printing for that particular mining site or vessel or whatever. But once you have the tools in the local community and you can print a whole bunch of other stuff as well, ranging from fixing plumbing issues or, you know, pumps to wells or whatever it is that you're doing. And that's super exciting as well.Tom Raftery:
Lovely, lovely, fantastic. Espen that's been brilliant. If people want to know more about yourself, are about Ivaldi or about any of the things we've been chatting about today, where would you have me send them?Espen Sivertsen:
The easiest is to go to Ivaldi.io which is our website, or if they want to talk to me or someone else, they can just email our digital assistant, Sam firstname.lastname@example.orgTom Raftery:
Nice, lovely, lovely, brilliant Espen. That's been great Thanks a million for coming on the show today.Espen Sivertsen:
Thank you so much Tom. I really appreciate your time and effort and look forward to hearing it.Speaker:
OK, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about digital supply chain to head on over to SAP dot com slash digital supply chain or or simply drop me an email to Tom Dot Raftery at SAP dot com if you'd like to show, please don't forget to subscribe to it in your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.