Economies of collaboration in build‐to‐model operations. Issue 8 (1st April 2019)

• Record Type: Journal Article
• Authors: Hedenstierna, Carl Philip T.; Disney, Stephen M.; Eyers, Daniel R.; Holmström, Jan; Syntetos, Aris A.; Wang, Xun
• Other Names: Holmström Jan guestEditor.; Holweg Matthias guestEditor.; Lawson Benn guestEditor.; Pil Frits guestEditor.; Wagner Stephan guestEditor.
• Is Part Of: Journal of operations management. Volume 65:Issue 8(2019)
• Page Start: 753
• Page End: 773
• Publication Date: 2019-04-01
• Subjects: 3D printing -- build‐to‐model -- capacity sharing -- design science research -- empirical study -- general purpose technology -- order book smoothing; Production management -- Periodicals; Management -- Periodicals; 658.5
• DOI: 10.1002/joom.1014
• Languages: English
• ISSNs: 0272-6963

Abstract

Abstract: The direct‐from‐model and tool‐less manufacturing process of 3D printing (3DP) embodies a general‐purpose technology, facilitating capacity sharing and outsourcing. Starting from a case study of a 3DP company (Shapeways) and a new market entrant (Panalpina), we develop dynamic practices for partial outsourcing in build‐to‐model manufacturing. We propose a new outsourcing scheme, bidirectional partial outsourcing (BPO), where 3D printers share capacity by alternating between the role of outsourcer and subcontractor based on need. Coupled with order book smoothing (OBS), where orders are released gradually to production, this provides 3D printers with two distinct ways to manage demand variability. By combining demand and cost field data with an analytical model, we find that BPO improves 3DP cost efficiency and delivery performance as the number of 3DP firms in the network increases. OBS is sufficient for an established 3D printer when alternatives to in‐house manufacturing are few, or of limited capacity. Nevertheless, OBS comes at the cost of reduced responsiveness, whereas BPO shifts the cost and delivery performance frontier. Our analysis shows how BPO combined with OBS makes 3DP companies more resilient to downward movements in both demand and price levels.