Benefiting from additive manufacturing for mass customization across the product life cycle
Additive manufacturing (AM) was initially designed for prototyping and product personalization, where high production quantities were not required. Now, it is also implemented for final part production to achieve cost-effective mass customization (MC). Thanks to its tool-less production and extreme...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Elsevier
2021-01-01
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| Series: | Operations Research Perspectives |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2214716021000208 |
| _version_ | 1819319490290122752 |
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| author | Rachel Lacroix Ralf W. Seifert Anna Timonina-Farkas |
| author_facet | Rachel Lacroix Ralf W. Seifert Anna Timonina-Farkas |
| author_sort | Rachel Lacroix |
| collection | DOAJ |
| description | Additive manufacturing (AM) was initially designed for prototyping and product personalization, where high production quantities were not required. Now, it is also implemented for final part production to achieve cost-effective mass customization (MC). Thanks to its tool-less production and extreme flexibility, AM has the potential to address individual customer preferences with custom final parts. Nevertheless, despite its increased competitiveness, AM is not yet likely to replace traditional MC systems, but it can complement them, improving manufacturing efficiency. To broaden our understanding of how AM can complement traditional manufacturing systems, we develop an exploratory quantitative model. First, we leverage customer-centricity in a novel time-varying locational choice model of heterogeneous customers, coupling the Bass and the Hotelling–Lancaster models. Then, we investigate customer-centric marketing and operations decisions, exploring technology-switching scenarios that interchange AM with MC across the product life cycle (PLC). We formulate and solve an optimization problem by jointly deciding on technology-switching times, pricing, and product variety strategies to maximize a manufacturer’s profit and meet individual customers’ diverse and evolving needs. We use a validated Sample Average Approximation approach for the numerical solution of our non-convex optimization problem. Testing different pricing strategies, we show that decreasing and flexible trajectories are optimal. We derive analytical properties for the optimal pricing policy and demonstrate that a manufacturer can benefit from interchanging AM and MC across the PLC, in particular by adopting an AM-MC-AM scenario. |
| first_indexed | 2024-12-24T11:04:31Z |
| format | Article |
| id | doaj.art-fd1f5f15b0e345a1a25a733b90de5a40 |
| institution | Directory Open Access Journal |
| issn | 2214-7160 |
| language | English |
| last_indexed | 2024-12-24T11:04:31Z |
| publishDate | 2021-01-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Operations Research Perspectives |
| spelling | doaj.art-fd1f5f15b0e345a1a25a733b90de5a402022-12-21T16:58:39ZengElsevierOperations Research Perspectives2214-71602021-01-018100201Benefiting from additive manufacturing for mass customization across the product life cycleRachel Lacroix0Ralf W. Seifert1Anna Timonina-Farkas2École Polytechnique Fédérale de Lausanne (EPFL), Technology and Operations Management Chair, Odyssea Station 5, CH-1015, Lausanne, Switzerland; Corresponding author.École Polytechnique Fédérale de Lausanne (EPFL), Technology and Operations Management Chair, Odyssea Station 5, CH-1015, Lausanne, Switzerland; IMD Business School, Chemin de Bellerive 23, P.O. Box 915, CH-1001 Lausanne, SwitzerlandÉcole Polytechnique Fédérale de Lausanne (EPFL), Technology and Operations Management Chair, Odyssea Station 5, CH-1015, Lausanne, SwitzerlandAdditive manufacturing (AM) was initially designed for prototyping and product personalization, where high production quantities were not required. Now, it is also implemented for final part production to achieve cost-effective mass customization (MC). Thanks to its tool-less production and extreme flexibility, AM has the potential to address individual customer preferences with custom final parts. Nevertheless, despite its increased competitiveness, AM is not yet likely to replace traditional MC systems, but it can complement them, improving manufacturing efficiency. To broaden our understanding of how AM can complement traditional manufacturing systems, we develop an exploratory quantitative model. First, we leverage customer-centricity in a novel time-varying locational choice model of heterogeneous customers, coupling the Bass and the Hotelling–Lancaster models. Then, we investigate customer-centric marketing and operations decisions, exploring technology-switching scenarios that interchange AM with MC across the product life cycle (PLC). We formulate and solve an optimization problem by jointly deciding on technology-switching times, pricing, and product variety strategies to maximize a manufacturer’s profit and meet individual customers’ diverse and evolving needs. We use a validated Sample Average Approximation approach for the numerical solution of our non-convex optimization problem. Testing different pricing strategies, we show that decreasing and flexible trajectories are optimal. We derive analytical properties for the optimal pricing policy and demonstrate that a manufacturer can benefit from interchanging AM and MC across the PLC, in particular by adopting an AM-MC-AM scenario.http://www.sciencedirect.com/science/article/pii/S2214716021000208Additive manufacturingMass customizationCustomer preferenceSwitching timePricing |
| spellingShingle | Rachel Lacroix Ralf W. Seifert Anna Timonina-Farkas Benefiting from additive manufacturing for mass customization across the product life cycle Operations Research Perspectives Additive manufacturing Mass customization Customer preference Switching time Pricing |
| title | Benefiting from additive manufacturing for mass customization across the product life cycle |
| title_full | Benefiting from additive manufacturing for mass customization across the product life cycle |
| title_fullStr | Benefiting from additive manufacturing for mass customization across the product life cycle |
| title_full_unstemmed | Benefiting from additive manufacturing for mass customization across the product life cycle |
| title_short | Benefiting from additive manufacturing for mass customization across the product life cycle |
| title_sort | benefiting from additive manufacturing for mass customization across the product life cycle |
| topic | Additive manufacturing Mass customization Customer preference Switching time Pricing |
| url | http://www.sciencedirect.com/science/article/pii/S2214716021000208 |
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