Heinen, Jakob and Kai Hoberg

Assessing the Potential of Additive Manufacturing for the Provision of Spare Parts

Journal of Operations Management, 65 (8): 826-810, (2019).

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Abstract: Spare parts are a particularly interesting application for switching production from traditional manufacturing (TM) to additive manufacturing (AM). Research assessing AM has primarily addressed cost models centering on the production process or the operations management of separate spare parts. By combining case study, modelling, and design science elements, we adopt a holistic perspective and develop a design to examine the systematic leverage of AM in spare parts operations. Contextually grounded in problems faced by a leading material handling equipment manufacturer that is challenged by common characteristics of after-sales operations, we engage with practice to propose a portfolio level analysis examining the switchover share from TM to AM. Using a dataset of 53,457 spare parts over nine years, we find that up to 8% of stock keeping units (SKUs) and 2% of total units supplied could be produced using AM, even if unit production costs are four times those of TM. This result is driven by low demand, high fixed costs, and minimum order quantities in TM. Finally, we present the evaluation by the case company's management and highlight five areas of opportunity and challenge.

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