Additive manufacturing-enabled supply chain: Modeling and case studies on local, integrated production-inventory-transportation structure

Abstract

Additive manufacturing has been adopted in a wide range of application domains (e.g., aerospace, automobile, and consumer goods) owing to its advantages in terms of providing additional manufacturing complexity and enhanced level of customization compared with traditional manufacturing. The adoption of additive manufacturing techniques in production has enabled possibilities for innovating the current supply chain structures by leveraging the unique on-demand and make-to-order production schemes. Current literature on additive manufacturing supply chains is mainly concerned with comparative case studies and simulation-based analyses on centralized and distributed structures; meanwhile, it lacks research that investigates the benefits of unique supply chain structures for additive manufacturing. Hence, in this paper, theoretical models are established to quantify the supply chain costs of traditional and additive manufacturing in the scope of a local, small-sized supply chain for the production, inventory, and transportation of highly customized consumer products. The established models are also applicable for the distinctive, integrated production-inventory-transportation structure enabled by additive manufacturing. Exploratory case studies are conducted, in the context of the insole manufacturing industry. The case study results suggest cost-saving potentials of up to 31.46% when adopting additive manufacturing. Moreover, the case studies demonstrate the impact of some critical parameters and assumptions adopted in the model on the resulting supply chain cost, including order rework rate, rush order ratio, labor’s hourly rate, and raw material price. The results of this research will provide useful insights and guidance on adopting additive manufacturing in production and supply chain operations.