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Traditional or Additive Manufacturing? Assessing Component Design Options through Lifecycle Cost Analysis

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  • Westerweel, Bram
  • Basten, Rob J.I.
  • van Houtum, Geert-Jan

Abstract

We consider an original equipment manufacturer that can either design a system component that is produced with traditional technology, or design an alternative component that is produced with additive manufacturing (AM). Designing either component requires a technology specific one-time investment and the components have different characteristics, notably in terms of production leadtime, production costs and component reliability. We support the design decision with a model that is based on evaluating the lifecycle costs of both components, covering design costs, maintenance and downtime costs, and performance benefits. We derive analytic properties of the required reliability and costs of the AM component such that its total lifecycle costs break even with that of its regular counterpart. Through our analysis, a numerical experiment and cases from two different companies, we find that component reliability and production costs are crucial to the success of AM components, while AM component design costs can be overcome to a certain degree by generating performance benefits or by using the short AM production leadtime to lower the after-sales logistics costs.

Suggested Citation

  • Westerweel, Bram & Basten, Rob J.I. & van Houtum, Geert-Jan, 2018. "Traditional or Additive Manufacturing? Assessing Component Design Options through Lifecycle Cost Analysis," European Journal of Operational Research, Elsevier, vol. 270(2), pages 570-585.
    • Handle: RePEc:eee:ejores:v:270:y:2018:i:2:p:570-585
    DOI: 10.1016/j.ejor.2018.04.015
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    References listed on IDEAS

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    11. Lacroix, Rachel & Seifert, Ralf W. & Timonina-Farkas, Anna, 2021. "Benefiting from additive manufacturing for mass customization across the product life cycle," Operations Research Perspectives, Elsevier, vol. 8(C).
    12. Knofius, N. & van der Heijden, M.C. & Zijm, W.H.M., 2019. "Consolidating spare parts for asset maintenance with additive manufacturing," International Journal of Production Economics, Elsevier, vol. 208(C), pages 269-280.
    13. N. Knofius & M. C. Heijden & A. Sleptchenko & W. H. M. Zijm, 2021. "Improving effectiveness of spare parts supply by additive manufacturing as dual sourcing option," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 43(1), pages 189-221, March.
    14. Bram Westerweel & Rob Basten & Jelmar den Boer & Geert‐Jan van Houtum, 2021. "Printing Spare Parts at Remote Locations: Fulfilling the Promise of Additive Manufacturing," Production and Operations Management, Production and Operations Management Society, vol. 30(6), pages 1615-1632, June.
    15. Jing-Sheng Song & Yue Zhang, 2020. "Stock or Print? Impact of 3-D Printing on Spare Parts Logistics," Management Science, INFORMS, vol. 66(9), pages 3860-3878, September.
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