Implementation of 3D printing and the effect on decision making in logistics management

• Date: 17 November 2020
• DOI: https://doi.org/10.1108/IJLM-01-2020-0049
• Published date: 17 November 2020
• Pages: 434-453
• Subject Matter: Management science & operations,Logistics
• Author: Stefan Hecker

Implementation of 3D printing and

the effect on decision making in

logistics management

Stefan Hecker

Department of Production and Logistics Management, University of Siegen,

Siegen, Germany

Abstract

Purpose –From a synthesis of literature, the purpose of this paper is to present a conceptual service

development methodology showing the impact of 3D printing as a disruptive technology to the service

portfolio. The methodology is designed to support practitioners and academics in better understanding the

impact of disruptive technologies may have to the service portfolio and participate in the technology.

Design/methodology/approach–A literature review is conducted and based on these findings a conceptual

framework has been developed.

Findings –The design of a methodology for the development of 3D printing services is used to evaluatethe

disruption potential of 3D printing and to implement the technology in the service portfolio of a logistics service

provider. The disruption potential of 3D printing influences a logistics manager by make to order decisions. In

addition, it could be proven the service portfolio was diversified.

Research limitations/implications –Literature directly dealing with technology-based service

development for decision making in logistics management is rare and thus the methodology is built on

insights, compiled from the distinct research areas. Further research should be performed on this nascent topic.

Practical implications –Logistics service providers may use the developed methodology to revise their

service portfolio by the consideration of disruptive technologies, in order to reduce strategic misdecisions

regarding the range of services.

Originality/value –This paper looks specifically at decision making for implementing disruptive

technologies to the service portfolio.

Keywords Logistics management, 3D printing, Service development, Decision making

Paper type Conceptual paper

1. Introduction

From the origins of logistics, the Romans understood an efficient supply and transfer of troops in

military operations under this term, the understanding has shifted to creating value for

customers and other associated stakeholders (Walters, 1999). Logistics, with its task of planning,

implementing and controlling the flow of materials and information from the supplier to the

company, within the company and from the company to the customer, forms the connection

between various players in a value chain. In this context, logistics managers as major players in

the value chain mainly undertake three strategic decisions at firm level (Wanke and Zinn, 2004).

This paper focuses on the first stream of decision making in which decisions are made between

the dilemma of make to order versus make to stock. One key variable affecting this decision is the

process technology (Soman et al.,2004;Van Donk, 2001). A process technology being well-known

especially in the past decade is 3D printing. 3D printing is able to address the problem of

increasing transports of goods and warehousing because goods are produced exactly where they

are needed (Abdul-Jalbar et al.,2003). International flows of goods can be reduced, transport

IJLM

32,2

434

This paper forms part of a special section “Decision Making in Logistics Management in the Era of

Disruptive Technologies”, guest edited by Vijay Pereira, Gopalakrishnan Narayanamurthy, Alessio

Ishizaka and Noura Yassine.

Many thanks for supporting this paper and constructive discussions by Prof. Dr U. Seidenberg,

Dr W. M€

uller, O. Klunk and M. Sieger.

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0957-4093.htm

Received 30 January 2020

Revised 21 July 2020

Accepted 20 October 2020

The International Journal of

Logistics Management

Vol. 32 No. 2, 2021

pp. 434-453

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-01-2020-0049

times and routes can be shortened and inventory levels can be optimized. Regarding the

influence of 3D printing on a supply chain, it seems to be clear productivity of printing increases

in the same way as the implementation of technology increases to the product and service

portfolio of the players across the supply chain (Thomas et al.,2017). There mightbe changes in

constellations and relationships between them and as a result the part of value creation may

change between these players. As shown in the past, the logistics service provider is a player

who always experienced changes by technologies (Soman et al., 2004;Van Donk, 2001).

Depending on the fields of application and maturity of 3D printing, a logistics service provider in

particular may be affected to its main business activities consisting of transport, storage and

transshipment. Some logistics services providers have already recognized a decreasing sales of

warehousing caused by 3D printing (Carey, 2016). 3D printing can therefore being characterized

as a disruptive technology because its impact on existing services in logistics is able to

completely out the market and make investments of previously dominant market participants

obsolete (Danneels, 2004). In this context, a decision to be undertaken by logistics managers is to

evaluate the disruption potential of 3D printing for the service portfolio of a logistics service

provider and how to implement this technology if necessary. Especially the combination of

innovation and technology management on the one hand side and the development of logistics

services on the other side is what keeps logistics service providers struggling (Evangelista and

Sweeney, 2006). In a study conducted by Ernst & Young (EY) in 2019 with a total of 900

companies surveyed, 68% of the companies in the logistics and transport sector stated they were

already using 3D printing, 14% were considering using it and 18% were not interestedin using it

(Karevska, 2019). These data show the great interest in 3D printing in logistics. At the time of the

survey, 65% of the companies surveyed stated they expected the production of end products to

be subcontracted by means of 3D printing (Karevska et al.,2019). Compared to a study of EY in

2016, the experience levelof the companies participating in the survey shifted from level 1 (no

experience) to level 2 (experimentation and testing) in 2019 and represents the largest share with

39%. In the advanced classifications of level 3 (application in various departments) and level 4

(strategic application in the company), the proportion of companies has doubled compared to

2016 (M€

ullerand Karevska,2016;Karevskaet al., 2019). When classifying the barriers mentioned

for the implementation of 3D printing, three groups can be formed: high prices and investments,

lack of skills and competences as well as technological restrictions. The focus of this paper is on

the lack of skills and competences of 3D printing regarding logistics service providers. In this

context, 3D printing is only one characteristic example for a disruptive technology besides

Internet of things, big data, artificial intelligence, blockchain etc. All these disruptive

technologies got in common they are influencing the way logistics managers undertake their

decisions (Forbes Insights, 2018). The research question of this paper is how decision making in

logistics management is impacted by the implementation of 3D printing to the service portfolio

as a characteristic example for disruptive technologies? Logistics managers have to decide

whether the disruption potential of 3D printing impacts the business of a logistics service

provider and how to implement a disruptive technology to the business model. Without the

implementation of 3D printing it may be, the current service portfolio is no longer competitive

any further. The aim is to design a methodology for logistics managers giving support to identify

the potential of 3D printing and to implement its potential by modifying the current service

portfolio. The methodology can be used as a guideline to modify services depending on the

technological maturity of 3D printing.

The structure of this paper is as follows: the next section is a literature review on service

development with particular attention to technology-orientation and logistics. Several

approaches have been analyzed and connecting as well as delimitation points for a

methodologyas a decision support have been identified. The need for actionbecomes obvious

and the research process is also presented in this section. Results are given in section 3 by a

methodologyto evaluate the potentialof 3D printing as a representative technologydisrupting

Implementation

of 3D printing

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