Quantifying the effects of additive manufacturing on supply networks by means of a facility location-allocation model

Additive manufacturing (AM), or nonstandard 3D printing, disseminates in more and more production processes. This changes not only the production processes, e.g. subtractive production technologies are replaced, but will in all likelihood impact the configuration of supply networks. Due to a more efficient use of raw materials, transportation relations may change and production sites may be relocated. How this change will look like is part of an ongoing discussion in industry and academia. However, quantitative studies on this question are scarce. In order to quantify the potential impact of AM on a two-stage supply network, we use a facility location model. The impact of AM on the production process is integrated into the model by varying resource efficiency ratios. We create a test data set of 308 instances. Features of this test set are different geographical clusters of source nodes, production nodes, and customers nodes. By means of a computational study, the impact of AM on the supply network structure is measured by four indicators. In the context of our study, AM reduces the overall transportation costs of a supply network. However, the share of the transportation costs on the second stage of a supply network in the total costs increases significantly. Therefore, supply networks in which production sites and customer sites are closely spaced improve their cost effectiveness stronger than other regional configurations of supply networks.