Distributed 3D Printing of Spare Parts via IP Licensing

Problem definition: We consider an OEM supplying a single part to multiple buyers over infinite horizon. study how the can digitize spare parts supply chain by leveraging 3D printing via intellectual property (IP) licensing. Academic/practical relevance: Additive manufacturing, also known as printing, has potential shift chains from global networks that rely on centralized production with traditional manufacturing technologies mainly digital distributed, local printing. Particularly well positioned drive this transition are original equipment manufacturers (OEMs) who design and produce capital goods. Methodology: first set up benchmark model of physical OEM. then propose act IP licensor selling designs, rather than parts. With license agreement, buyer print locally through third-party service provider, enjoying shorter lead time lower setup cost. Given license, each chooses whether switch licensing channel or stay in channel. The selects terms maximize total profit across both channels. Results: characterize OEM’s optimal resulting configuration. show printing’s competency price plays dominant role decentral- ization. conventional wisdom is suitable for slow moving holds only when it competent along several dimensions. In numerical experiment realistic parameter settings, decentralized occurs surprisingly large number cases, proposed new business significantly increase profit. Managerial implications: Our results indicate OEMs become major enabler distributed benefiting all parties involved.