Bill Poulos is an American investor who began trading in the stock market as a hobby in the early seventies. Today, he shares his financial expertise and opinion on finance related topics and current economic events. Poulos is one of the co-founder and president of Profits Run, Inc. The company works at educating traders on making smart trades with minimal risks. Bill and Profits Run acknowledge citizens who make a difference within their communities by awarding the Profits Run Starfish Award. Learn more about Bill and investing in the YouTube video. Poulos married his high school sweetheart in 1969. They have three boys and two grandchildren. Here, Poulos shares insight on 3-D printing and its implications in manufacturing.
Interest in 3-D printing has waned some in the past few years. At one point it was a “revolutionary” technology, giving people the ability to produce pretty much any object they desired- including, but not limited to simple things like toys, to more complex items like fully-automatic rifles.
And even though the printed rifles could only be shot just a handful of times, they still sparked lots of controversy.
But eventually laws were enacted and 3-D printing turned into more of a hobby than a practical method of production. Basically a basement-dwelling, tech geek’s “toy” used to add to their figurine collections.
In the past, companies have attempted to include 3-D printing a feature of their business, but it always seemed as though significant breakthroughs in the process were still years away. Despite this, many investors put their faith in the technology, causing a peak in stocks focused on the new tech in 2014.
And now they’ve fallen (on average) about 85% as of this year. To put things in relative terms, over that same time period the Dow is up over 75%.
However, that’s all about to change, according to Honeywell International (NYSE: HON). Industrial 3-D printing has done two things investors should love according to the multinational conglomerate: saved the company tons of cash, while also acquiring billions in new business.
But that certainly doesn’t mean that the tried and true methods of manufacturing are going to be killed off by 3-D printing. Rather, it’s become an integral part of a new industry referred to as “additive manufacturing”.
Donald Godfrey, an engineering fellow at Honeywell Aerospace explained, “Additive manufacturing will never replace [high-end] forging.”
“And if you have a high volume part, you’ll never beat the cost effectiveness of casting.”
Although, Godfrey still believes in a future where 3-D printing is a key factor.
“A few years ago we had a part- the casting was wrong- and it was going to take nine months to fix,” he recalled.
“We didn’t have nine months. I said I could have a part in two months. I was [literally] laughed at.”
Though sure enough, in just one month, Godfrey delivered a brand new, working part. Thanks partly to 3-D printing.
When Honeywell executives realized mistakes in production could be corrected quicker and cheaper than ever before, it was certainly a transformative moment for the business. It wasn’t long before additive manufacturing was integrated into the strategy at Honeywell.
But rapid part creation is not the only benefit of additive manufacturing (via 3-D printing). Soon thereafter, Honeywell found other uses like producing “one-off” components for legacy products.
“We have to support every engine we have in the field with spare parts,” Godfrey explained.
Honeywell stopped making some of those engines years ago. In the past it had been a highly inefficient process trying to recreate old parts.
“You can’t case [just] one, you cast 1,000.”
Other companies have their own reasons for falling back in love with 3-D printing. For example, GE (NYSE: GE) have in general been very bullish about the technology, and made a statement in 2017 that they had a goal to eventually 3-D print “$1 billion” worth of products.
Unfortunately, industry engineers maintain that being able to use 3-D printers in that manner is still a “pipe dream” and is slated in more fiction than fact. But that isn’t to say that they’re not exceedingly useful, nor have companies found any lack of new use cases for 3-D printing as time has gone on.
Primarily, the future of the industry lies in additive manufacturing. During the next few years more manufacturers will surely figure this out as Honeywell has.
When they do, the “peak” in 3-D printing stocks from 2014 may end up paling in comparison after investors rush in on the revived technology.
Honeywell engineers won’t be surprised if they do. Particularly not Godfrey, who has firsthand experience on how much money 3-D printing can save a company. Once increasingly efficient corporate earnings allow analysts to realize this too, the nation may be swept by a new wave of manufacturing optimism.