See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/257337095

Additive manufacturing and its societal impact: A literature review

Article  in  International Journal of Advanced Manufacturing Technology · July 2012

DOI: 10.1007/s00170-012-4558-5

CITATIONS READS

394 1,133

4 authors, including:

Samuel Huang Peng Liu

University of Cincinnati Jilin University
117 PUBLICATIONS   4,621 CITATIONS    2 PUBLICATIONS   455 CITATIONS   

SEE PROFILE SEE PROFILE

Hou Liang
Xiamen University
47 PUBLICATIONS   542 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

CMII, CDS Lab, University of Cincinnati View project

Assessment of Crack in Turbo machinery Blade View project

All content following this page was uploaded by Samuel Huang on 03 December 2017.

The user has requested enhancement of the downloaded file.

 Production Planning & Control, 2014
Vol. 25, Nos. 13–14, 1169–1181, http://dx.doi.org/10.1080/09537287.2013.808835

The impact of additive manufacturing in the aircraft spare parts supply chain: supply chain
operation reference (scor) model based analysis
Peng Liua,b, Samuel H. Huangb,c*, Abhiram Mokasdarb, Heng Zhoub and Liang Houc
a
Department of Industrial Engineering, Jilin University, Jilin, P.R. China; bSchool of Dynamic Systems, University of Cincinnati,
Cincinnati, OH 45221, USA; cDepartment of Mechanical and Electrical Engineering, Xiamen University, Xiamen, P.R. China
(Received 4 May 2013; final version received 4 May 2013)

Additive manufacturing (AM) technology has the potential to significantly improve supply chain dynamics, reduce
shipping costs and shorten delivery lead times. Using AM technology, manufacturers can produce parts on demand
Downloaded by [University of Louisville] at 18:13 10 February 2015

and thus reduce the need of maintaining safety inventory. This is especially useful in the aircraft spare parts industry
where currently there is a need to maintain a high level of safety inventory for high-cost long-lead time metallic parts.
Therefore, more and more companies in the aerospace industry are interested in using AM technology. There are dif-
ferent approaches to configure the aircraft spare parts supply chain using AM technology. This paper evaluates the
impact of AM in the aircraft spare parts supply chain based on the well-known supply chain operation reference
model. Three supply chain scenarios are investigated; namely, conventional (as-is) supply chain, centralized AM sup-
ply chain and distributed AM supply chain. A case study is conducted based on data obtained in the literature. The
result shows that the use of AM will bring various opportunities for reducing the required safety inventory of aircraft
spare parts in the supply chain. A sensitivity analysis is performed and some key factors affecting the choice of AM
scenarios are studied.
Keywords: additive manufacturing; supply chain operations reference (SCOR) model; aircraft spare parts; safety
inventory

1. Introduction a design in the form of a computerized 3D solid model

Aircraft spare parts manufacturers are often under great
pressure of the demand of products with high quality
and high cost materials. They have to spend many
machine hours at high cost rates on precision machine
tools machining away anything up to 98% of the original
billet to achieve the desired form (Allen 2006). The
manufacturing lead time for aircraft parts is very long
using such conventional manufacturing processes. It is
not uncommon to have lead time in the range of several
months for these parts. On the other hand, the aircraft
spare parts industry requires a very high cycle service
level (CSL) to meet customer demands. The long pro-
curement lead time and high CSL place a heavy burden
on the aircraft spare parts industry to maintain a high
level of safety inventory, which significantly increases
supply chain cost.
The emergence of additive manufacturing (AM) tech-
nology creates an opportunity to manufacture parts on
demand to improve supply chain dynamics. AM is the
“process of joining materials to make objects from 3D
model data, usually layer upon layer” (ASTM 2010). By
the means of creating the final shape by adding material,
can be directly transformed to a finished product without
the use of additional fixtures and cutting tools. As a
result, manufacturing lead time can be reduced signifi-
cantly. In addition, the high material and resource wast-
age factors are also avoided. It has been pointed out that
AM has the potential to reduce the number of stages in
the traditional supply chain (Reeves 2008). Specifically,
AM technology offers two opportunities: (1) to redesign
products with fewer components and (2) to manufacture
products near the customers (i.e. distributed manufactur-
ing). The net effect is the reduction in the need for ware-
housing, transportation and packaging. Therefore, there
is a need to study the impact of AM on supply chain
performance.
The objective of this paper is to study the impact of
AM in the aircraft spare parts industry, with an emphasis
on the use of distributed manufacturing strategy to
reduce inventory cost. Section 2 reviews prior work in
two areas: (1) the use of AM in the aircraft spare parts
supply chain and (2) supply chain analysis using the sup-
ply chain operations reference (SCOR) model. Section 3
presents three different supply chain configurations for

*Corresponding author. Email: sam.huang@uc.edu

Ó 2013 Taylor & Francis

 1170 P. Liu et al.
the aircraft spare parts industry. The performance of
these three different configurations is analyzed in Sec-
tion 4. Finally, conclusions are drawn in Section 5.
2. Literature review
2.1. Aircraft spare parts supply chain and AM
Companies along the aircraft spare parts supply chain
face significant challenges in providing fast repair and
maintenance services while minimizing costs. A large
commercial airplane is made up of several millions of
parts. Most parts are infrequently needed but they have
to be kept in stock in order to ensure fast service time.
The current supply chain for aircraft spare parts func-
tions as follows. A safety stock of standard replacement
Downloaded by [University of Louisville] at 18:13 10 February 2015
parts is kept at the airline’s in-house warehouse. These
parts can be ordered at regular intervals according to a
maintenance plan. Other less-frequently-used parts are
purchased from suppliers and often require a 24 h deliv-
ery time to ensure fast service. Therefore, suppliers must
keep these parts in stock and use an overnight delivery
service. To keep the stock of those slow moving (i.e.
infrequently needed) parts as low as possible, the strat-
egy of demand aggregation is used which requires cen-
tral warehousing. The trade-off is increased delivery
cost. Another problem is related to the production batch
size of these parts. Current production technology
requires parts to be produced in large batch size to take
advantage of economies of scale. However, for slow
moving parts, it means a long lead time and a large
amount of capital tied up in the form of inventory.
Aircraft spare parts demand pattern follows a 20/80
Pareto curve. This means that 80% of the parts are
needed frequently and make up most of the airline
demands. However, they only account for 20% of the
supply chain expenditure in terms of holding inventory
and moving materials. In other words, the majority of
the supply chain cost is due to the small amount of slow
moving parts. The spare parts supplier often subsidize
the holding cost of these parts with the profits they make
from the fast moving spare parts.
AM technology can cost-effectively produce a small
batch of parts. It also has the potential to reduce the need
of safety inventory. AM describes a collection of produc-
tion techniques that manufacture parts layer-by-layer
using digital data and raw material as inputs (Baumers
et al. 2011). The technology has advanced rapidly since
its inception in the late 1980s. The AM industry is pro-
jected to reach $3.1 billion worldwide by 2016 and
$5.2 billion by 2020 (McCue 2012). AM technology is
capable of producing components using a variety of
materials. Many aircraft manufacturers are already using
AM technology to produce high-cost long-lead metallic
components.
AM technology can potentially change the traditional
supply chain configuration of various industries. The
impact of AM could be complicated, as it not only
impinges on current methodologies but also on the con-
stituent parts of the supply chain (ATKINS 2007). Tuck,
Hague, and Burns (2007) discussed how AM technology
could change supply chain management thinking.
Because AM only requires 3D data and raw material in
order to produce a complex part, it will reduce setup and
changeover time, and the number of assemblies. Several
researchers have investigated the introduction of AM in
the aircraft spare parts supply chain (Walter, Holmstrom,
and Yrjola 2004; Hasan and Rennie 2008; Holmstrom
et al. 2010). However, as AM technology has yet to
reach the level of maturity of conventional manufactur-
ing processes, only a limited range of parts can be pro-
duced economically. Therefore, it is necessary to use a
systematic step by step procedure to determine suitable
applications. The decisions should be revisited periodi-
cally because AM technology is constantly evolving.
Detailed discussion of this procedure can be found in
(Walter, Holmstrom, and Yrjola 2004).
Holmstrom et al. (2010) proposed two different
approaches to integrate AM technology in the aircraft
spare parts supply chain. The first approach is to use
centralized AM capacity to replace inventory holding.
AM machines are deployed in centralized distribution
centres to produce slow moving spare parts on demand.
Producing parts in a centralized location has the advan-
tage of aggregating demand from various regional ser-
vice locations to ensure that the investment in AM
capacity is well utilized. The disadvantage is that the
produced parts need to be shipped to the service loca-
tions, which results in the increase of response time. For
certain parts that are needed in the first line maintenance,
inventory still needs to be carried in the service loca-
tions. This approach is desirable when parts that can be
produced using AM are limited and the required
response time is not critical. The second approach, dis-
tributed AM deployed at each service location, is suit-
able when the demand of AM producible parts is
sufficiently high to justify the capacity investment. The
advantage is the elimination of inventory holding and
transportation costs and a faster response time.
In addition to these two approaches, Holmstrom
et al. (2010) also contemplated the feasibility of mobile
AM but conceded that there are many challenges. The
authors further discussed the trade-off between batch
production and on-demand production, and that between
specialized and general purpose AM. The key variables
considered are material and production costs, distribution
and inventory obsolescence costs and life-cycle costs for
the user. They concluded that on-demand and centralized
production of spare parts is most likely to succeed. How-
ever, the implications of a move toward AM extend far
 Production Planning & Control
beyond the manufacturing process itself. This agile pro-
duction strategy enables a truly distributed supply chain,
where manufacturing can take place concurrently at mul-
tiple locations that are located close to the customer. This
new structure could eliminate many stages of the tradi-
tional supply chain, affecting lead times, inventory man-
agement, and transaction and logistics costs. To better
understand the impact of AM on supply chain dynamics,
it is necessary to apply a systematic modelling and
analysis methodology.
2.2. Supply chain management and the SCOR model
In the past few decades, supply chain management prac-
tice has been adopted by more and more companies to
reduce costs, increase market share and sales and build
Downloaded by [University of Louisville] at 18:13 10 February 2015
solid customer relations (Ferguson 2000). A supply chain
is a network of facilities that procure raw materials,
transform them into intermediate goods and then final
products and deliver the products to customers through a
distribution system. A supply chain has three key parts
(SCW 2012):
• Supply focuses on the raw materials supplied to
manufacturing, including how, when and from
what location.
• Manufacturing focuses on converting these raw
materials into finished products.
• Distribution focuses on ensuring these products
reach the consumers through an organized net-
work of distributors, warehouses and retailers.
Supply chain is very important for all businesses
involved in raw materials acquisition, component manu-
facturing, assembly, distribution, logistics, retailing,
information management and customer relation manage-
ment. Designing a reasonable model to describe the ele-
ments and performance of a supply chain is the research
priorities of many practitioners and researchers. Gener-
ally, there are four categories of supply chain models:
deterministic model (Voudouris 1996), in which the vari-
ables are known and specified; stochastic model (Tzafes-
tas and Kapsiotis 1994), where at least one of the
variables is unknown, and is assumed to follow a partic-
ular probability distribution; economic model (Christy
and Grout 1994); and simulation model (Towill 1991).
Among all kinds of supply chain models, the SCOR
model, intended to be an industrial standard, is the most
widely accepted one. It is a reference model that is used
as a tool to map, benchmark and develop the operations
of supply chains.
The SCOR model was developed by the Supply
Chain Council in 1996. It provides a balanced horizontal
(cross-process) and vertical (hierarchical) view as
compared to the classical process decomposition
models, which are developed to address one specific
1171
configuration of process elements (Wall, Jagdev, and
Browne 2007). The main objective behind developing
SCOR is to help large corporations compare and assess
their different supply chain activities by providing a stan-
dard framework (SCC 2012). This framework incorpo-
rates a set of evaluation metrics and connects business
processes, technology and best practices for effective
exchange of materials and information between different
levels of the supply chain. SCOR identifies five core
supply chain performance attributes: reliability, respon-
siveness, agility, costs and asset management. The SCOR
model provides a common process-oriented language for
communicating among supply-chain partners in the fol-
lowing five distinct management processes: PLAN,
SOURCE, MAKE, DELIVER and RETURN. Based on
the above expression methods, SCOR provides three lev-
els of process detail. Each level of detail assists a
company in defining scope (Level 1), configuration or
type of supply chain (Level 2) and process element
details, including performance attributes (Level 3).
Below level 3, companies decompose process elements
and start implementing specific supply chain manage-
ment practices. It is at this stage that companies define
practices to achieve a competitive advantage, and adapt
to changing business conditions.
SCOR helps companies to examine and measure
their supply chain processes, to determine where weak
links exist and to identify possible improvements. As a
cross-industry standard supply chain model, SCOR
guides the application of analytical tools to the supply
chain on the basis of process, performance evaluation
and best practice (Feng, Wua, and Chia 2010). Along
with today’s higher attention on supply chain perfor-
mance, the role of SCOR is more and more significant
as it can offer a practical approach to determine supply
chain process decisions and performance metrics. In
practice, the SCOR model is typically used by manufac-
turing companies to define their supply chain processes
and activities, and associated performance measures (Li,
Su, and Chen 2011). Building on the terminology and
process definitions provided by SCOR, Verdouw et al.
(2011) modelled demand-driven supply chain configura-
tions as specific sets of transformations, control systems
and coordination mechanisms. Naesens, Gelders, and
Pintelon (2007) used the SCOR model to measure the
strategic fit of inventory pooling in a horizontal
collaborated supply chain. GE used the SCOR model in
its transportation systems unit, which reported sales of
$2.6 billion in year 2001 (Zhou et al. 2011). Huang,
Sheoran, and Keskar (2005) summarized the perfor-
mance improvement achieved by AVON, LEGO and
Siemens Medicals using SCOR. The application field of
SCOR is so wide that over 650 organization members
worldwide have taken the initiative in implementing
such a model.
 1172
3. Configurations and SCOR representations of
aircraft spare parts supply chain
The aircraft spare parts supply chain configuration is one
of the key success factors in achieving desired supply
chain performance. According to SCOR, we can
configure the ‘as-is’ thread-diagram or the ‘to-be’ thread-
diagram of a particular supply chain based on the user’s
input. In order to describe and evaluate the performance
of the aircraft spare parts supply chain, the SCOR mod-
els should be defined depending on the context. Gener-
ally, a supply chain can have either a centralized
inventory holding capacity that distributes goods to a
large number of retailers, or more number of smaller
Downloaded by [University of Louisville] at 18:13 10 February 2015
Figure 1. The as-is aircraft spare parts supply chain.
Figure 2. SCOR thread diagram of the as-is aircraft spare parts supply chain.
P. Liu et al.
distributed inventory holding warehouses that are nearer
to the destination. Therefore, three conceptual configura-
tion scenarios of aircraft spare parts supply chain are
defined in this work; namely, the conventional as-is sup-
ply chain, centralized AM supply chain and distributed
AM supply chain.
The conventional as-is aircraft spare parts supply
chain (Figure 1) is described as follows. The original
equipment manufacturers (OEM) manufacture the spare
parts and supply them to the regional distribution centres
(RDC) of maintenance, repair and overhaul (MRO) com-
panies. The RDCs distribute parts to different service
locations (SL), where the actual maintenance and
 Production Planning & Control
repairing of the out-of-order aircraft subassemblies take
place. These out-of-order subassemblies are received
from line replacement units (LRU) near the aircraft oper-
ators. Inventory of functional subassemblies are kept at
LRU so they can be brought to the installed bases to
replace out-of-order subassemblies of an aircraft quickly.
The SCOR thread diagram of this as-is supply chain is
shown in Figure 2.
In the centralized scenario, AM technology is
introduced into the aircraft spare parts supply chain as
shown in Figure 3. Specifically, AM facilities are built
within the RDCs to manufacture spare parts that can
be economically produced. Although these parts are
Downloaded by [University of Louisville] at 18:13 10 February 2015
Figure 3. Aircraft spare parts supply chain with centralized AM.
Figure 4. SCOR thread diagram of the centralized AM supply chain.
1173
make-to-order, safety inventory is still required in order
to maintain a high CSL. Other spare parts are still manu-
factured by OEMs using conventional manufacturing
facilities. OEMs also supply raw materials to the AM
facilities. The introduction of AM leads to a number of
advantages to the aircraft spare parts supply chain. The
foremost advantage is parts produced using AM will
have a much shorter manufacturing lead time compared
to those produced using conventional manufacturing pro-
cesses. Another advantage is reduced logistics lead time
because the RDCs are closer to the end customers. As a
result, the amount of safety inventory that needs to be
held is reduced, which in turn reduces total supply chain
 1174 P. Liu et al.
inventory cost. The SCOR thread diagram of this central-
ized AM supply chain for the aircraft spare parts indus-
try is shown in Figure 4.
In the distributed scenario (shown in Figure 5), AM
facilities are built within the SLs instead of the RDCs.
Compared to the centralized scenario, this arrangement
has the advantage of producing parts closer to the cus-
tomer. The trade-off is a lower level of inventory aggre-
gation. The SCOR thread diagram of this distributed AM
supply chain for the aircraft spare parts industry is
shown in Figure 6.
Comparing the three thread diagrams (Figures 2, 4
and 6), one can see that configuration of the aircraft
Downloaded by [University of Louisville] at 18:13 10 February 2015
Figure 5. Aircraft spare parts supply chain with distributed AM.
Figure 6. SCOR thread diagram of the distributed AM supply chain.
operators remains unchanged. The differences occur in
the configuration of the OEM and the MRO. Therefore,
our analysis should focus on these two stages of the sup-
ply chain. In the aircraft spare parts supply chain, avail-
ability of parts to ensure fast service is of the utmost
importance. Therefore, supply chain reliability, respon-
siveness and asset management are the three performance
categories that should be emphasized. Under supply
chain reliability, perfect order fulfillment (RL.1.1) is the
most suitable performance metric. However, due to data
availability issues, we use a more generic reliability mea-
sure of CSL, which facilitates the calculation of required
safety inventory under the assumption of normally
 Production Planning & Control
distributed demand. Under supply chain responsiveness,
we select source cycle time (RS.2.1), make cycle time
(RS.2.2) and delivery cycle time (RS.2.3) as the perfor-
mance metrics. For simplicity sake, source cycle time
and delivery cycle time are combined as logistic lead
time. Under supply chain asset management, we select
inventory (AM.2.8) as the performance metric. Specifi-
cally, we focus on the required safety inventory because;
it is a critical issue in the aircraft spare parts supply
chain. In fact, the selection of all of these metrics is
driven by the goal of analysing supply chain safety
inventory.
4. Performance comparison study
4.1. Hypothetical supply chain
Downloaded by [University of Louisville] at 18:13 10 February 2015
In order to compare the performance of different supply
chain configurations, a case study is conducted. Figure 7
shows the hypothetical supply chain designed for analys-
ing the 3 scenarios. The supply chain has an OEM at
Carson, CA, which uses a conventional manufacturing
facility. The OEM supplies spare parts to the MRO,
which has 2 RDCs, located at Seattle, WA (RDC1) and
Torrance, CA (RDC2), respectively. Within the MRO,
RDC1 supplies to 4 SLs, located at Broomfield, CO
Figure 7. A hypothetical aircraft spare parts supply chain.
1175
(SL1), Phoenix, ZA (SL2), Austin, TX (SL3) and Bur-
bank, CA (SL4), respectively. RDC2 also supplies to 4
SLs, located at Chicago, IL (SL5), Albuquerque NM
(SL6), Fort Lauderdale, FL (SL7) and Atlanta GA (SL8),
respectively.
Six (6) parts are considered for production using AM
technology. The basic information (part name, billet
weight and part weight) of these six parts were taken
from Allen (2006). Additional information, i.e. make
cycle time using conventional manufacturing (CM) and
AM were assumed by taking into account part complex-
ity and weight. Specifically, the EOS M270, a direct
metal laser sintering machine is assumed for AM produc-
tion. The output of this machine is 40H/kg or
0.055 months/kg (Allen 2011), which is used to calculate
the make cycle time for each part based on part weight.
The information is shown in Table 1. The make cycle
times in Table 1 are mean cycle times. It is assumed that
each make cycle time follows a normal distribution with
a standard deviation that is 20% of the mean.
The logistic lead time for sourcing and delivering a
part from one location to another is determined by taking
into account travel distance and administrative time
(which is assumed to be the same for each of the 6
parts). The mean logistic lead times from the OEM to
 1176 P. Liu et al.

Table 1. Information of parts considered for AM production (modified from Allen 2006).

Part Name Billet weight (kg) Part weight (kg) Mean CM cycle time (Month) Mean AM cycle time (Month)
1 Intercase 182.00 30.00 8.000 1.650
2 Simple duct flange 1 67.00 11.14 3.000 0.613
3 Simple Duct Flange 2 67.00 7.66 2.000 0.421
4 Complex duct flange 1 149.00 7.65 1.500 0.421
5 Complex duct flange 2 206.60 10.28 7.000 0.565
6 Large blisk 810.00 97.00 9.000 5.335

Table 2. Logistic lead time (in month) information.

RDC1 RDC2 SL1 SL2 SL3 SL4 SL5 SL6 SL7 SL8
OEM 0.140 0.070 – – – – – – – –
– – – – – –
Downloaded by [University of Louisville] at 18:13 10 February 2015

RDC1 0.162 0.148 0.157 0.136

RDC2 – – – – – – 0.196 0.187 0.239 0.217

Table 3. Demand (in unit of part per month) information.

Part SL1 SL2 SL3 SL4 SL5 SL6 SL7 SL8

1 80 50 50 79 47 61 64 41
2 489 475 477 502 504 491 511 512
3 297 290 319 299 297 318 296 292
4 147 116 141 170 132 144 153 172
5 121 124 116 113 120 123 112 129
6 24 25 24 23 30 23 26 25

the two RDCs and from the two RDCs to the eight SLs
are shown in Table 2. It is assumed that the logistic lead
time follows a normal distribution with a standard devia-
tion that is 20% of the mean. The mean demands of
these six parts at the SLs are shown in Table 3. It is
assumed that the demand at each SL follows a normal
distribution with a standard deviation that is 80% of the
mean.
4.2. Safety inventory comparison
Safety inventory is calculated as follows
ss ¼ FS1 (CSL)  rL
where σL, the standard deviation of demand during
replenishment lead time, is calculated as
qffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
rL ¼ Lr2D þ l2D r2E
where
L is the mean replenishment lead time (in month),
σE is the standard deviation of replenishment lead
time,
μD is the mean demand (in month) and
σD is the standard deviation of demand
Under the as-is scenario, demands from SLs are
aggregated in RDCs and demands from RDCs are aggre-
gated in the OEM. The demands are assumed to be inde-
pendent. The aggregated demands at the two RDCs and
the OEM are calculated as shown in Table 4. The replen-
ishment lead time at a SL is simply the logistic lead time
from the RDC that supplies the SL; the replenishment
lead time at a RDC is simply the logistic lead time from
the OEM to the RDC; whereas the replenishment lead
time at the OEM is the CM make cycle time.
(1) Under the centralized scenario, demands from SLs
are still aggregated in RDCs; but there are no longer
demands of AM produced parts at the OEM. In other
words, the OEM does not need to hold any inventory for
such parts. The replenishment lead time at a SL is still
(2) the logistic lead time from the RDC that supplies the
SL; but the replenishment lead time at a RDC is now the
AM make cycle time. Under the distributed scenario,
there is no longer demand aggregation and thus no
inventory holding requirement, either at the OEM or at
the RDCs. Inventory is held only at the SLs. The
 Production Planning & Control 1177

Table 4. Aggregated demand (in unit of part per month) at RCDs and the OEM.

Demand at RDC1 Demand at RDC2 Demand at OEM

Part Mean Standard deviation Mean Standard deviation Mean Standard deviation
1 259 106.26 213 86.56 472 137.05
2 1943 777.39 2018 807.31 3961 1120.75
3 1205 482.31 1203 481.47 2408 681.50
4 574 231.65 601 241.53 1175 334.66
5 474 189.72 484 193.85 958 271.24
6 96 38.42 104 41.80 200 56.77

Table 5. Required safety inventory (in unit of part) under different scenarios.

Scenario Part SL1 SL2 SL3 SL4 SL5 SL6 SL7 SL8 RDC1 RDC2 OEM Total
As-Is 1 60 36 37 54 39 49 59 36 94 54 1975 2493
Downloaded by [University of Louisville] at 18:13 10 February 2015

2 368 342 353 346 418 397 468 447 688 501 7139 11,468
3 224 209 236 206 246 257 271 255 427 299 3170 5800
4 111 83 104 117 109 117 140 150 205 150 1258 2545
5 91 89 86 78 99 100 103 113 168 120 3539 4585
6 18 18 18 16 25 19 24 22 34 26 926 1145

Centralized 1 60 36 37 54 39 49 59 36 375 306 – 1051

2 368 342 353 346 418 397 468 447 1521 1579 – 6239
3 224 209 236 206 246 257 271 255 765 764 – 3434
4 111 83 104 117 109 117 140 150 367 383 – 1683
5 91 89 86 78 99 100 103 113 354 362 – 1475
6 18 18 18 16 25 19 24 22 315 342 – 816

Distributed 1 201 126 126 198 118 153 161 103 – – – 1185
2 726 705 708 745 748 729 759 760 – – – 5881
3 363 355 390 366 363 389 362 357 – – – 2946
4 180 142 172 208 161 176 187 210 – – – 1437
5 172 177 165 161 171 175 159 184 – – – 1364
6 119 124 119 114 149 114 129 124 – – – 993

Figure 8. Supply chain–safety inventory under different scenarios.

replenishment lead time at a SL is now the AM make Figure 8 shows the supply chain–safety inventory for
cycle time. The required safety inventories under these the six parts under different scenarios. We can see that
three scenarios are calculated as shown in Table 5. for all six parts, the as-is scenario has the highest supply
 1178 P. Liu et al.

chain safety inventory. In other words, the use of AM 4.3. Sensitivity analysis
technology by the MRO allows us to reduce supply In the case study, the standard deviation of the demand
chain–safety inventory compared to the use of CM tech- is assumed to be 80% of the mean. Here, we conduct a
nology by the OEM. For parts 1 and 6, the safety inven- sensitivity analysis by varying the standard deviation
tory under the centralized AM scenario is lower than from 10 to 100% of the mean. The result is shown in
that under the distributed scenario. These two parts have Figure 9. As expected, when demand standard deviation
low demand and longer make cycle time. On the other increases, the required supply chain–safety inventory
hand, parts 2, 3, 4 and 5 have relatively high demand increases for all three scenarios. However, the rate of
and shorter make cycle time; they require less safety increase is different for different parts under different
inventory under the distributed AM scenario. scenarios. When the demand standard deviation is low

3000 14000
Part 2
As-IS Part 1 As-Is
Centralized 12000 Centralized
2500 Distributed Distributed
10000
Downloaded by [University of Louisville] at 18:13 10 February 2015

Safety Inventory
2000
Safety Inventory

8000

1500 6000

1000 4000

2000
500

0
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1
Standard Deviation Standard Deviation

Part 3 Part 4
7000 As-Is 3000 As-Is
Centralized Centralized
6000 Distributed Distributed
2500
Safety Inventory

5000
Safety Inventory

2000
4000
1500
3000

1000
2000

1000 500

0 0
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1
Standard Deviation Standard Deviation

1300
As-Is Part 5 As-Is Part 6
5000
Centralized 1200 Centralized
Distributed Distributed
1100
4000
Safety Inventory
Safety Inventory

1000

3000 900

800
2000
700

1000 600

500
0
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1
Standard Deviation Standard Deviation

Figure 9. Sensitivity analysis by varying demand standard deviation.

 Production Planning & Control 1179

2600 12000
As-Is Part 1 As-Is Part 2
2400 Centralized 11000 Centralized
2200 Distributed Distributed
10000
2000
9000
Safety Inventory

Safety Inventory
1800
8000
1600

1400 7000

1200 6000

1000 5000
800
4000
600
3000
0.89 0.90 0.91 0.92 0.93 0.94 0.95 0.96 0.97 0.98 0.99 1.00 0.89 0.90 0.91 0.92 0.93 0.94 0.95 0.96 0.97 0.98 0.99 1.00
CSL CSL

As-Is Part 3 2600 As-Is Part 4

6000 Centralized Centralized
Downloaded by [University of Louisville] at 18:13 10 February 2015

2400
Distributed Distributed
2200
5000
Safety Inventory

Safety Inventory
2000

1800
4000
1600

1400
3000
1200

1000
2000
800

0.89 0.90 0.91 0.92 0.93 0.94 0.95 0.96 0.97 0.98 0.99 1.00 0.89 0.90 0.91 0.92 0.93 0.94 0.95 0.96 0.97 0.98 0.99 1.00

CSL CSL

5000 1200
As-Is Part 5 As-Is Part 6
4500 Centralized 1100 Centralized
Distributed Distributed
4000
1000
3500
Safety Inventory

Safety Inventory

900
3000
800
2500
700
2000
600
1500

1000 500

500 400
0.89 0.90 0.91 0.92 0.93 0.94 0.95 0.96 0.97 0.98 0.99 1.00 0.89 0.90 0.91 0.92 0.93 0.94 0.95 0.96 0.97 0.98 0.99 1.00
CSL CSL

Figure 10. Sensitivity analysis by varying CSL.

(i.e. 10 or 20% of the mean), distributed AM has the higher level of safety inventory for part 6 than the as-is
lowest required safety inventory for all six parts. How- scenario. On the other hand, centralized AM is still able
ever, when the demand standard deviation reaches 30% to reduce the required safety inventory for part 6 when
of the mean, centralized AM requires less safety inven- compared to the as-is scenario even when the demand
tory for parts 1 and 6 than distributed AM. For part 6, a standard deviation is several times of the mean.
part with very low demand, its required safety inventory We then analyse the influence of CSL by varying its
under the distributed AM scenario increases quickly as value from 0.90 to 0.99 while keeping the demand
the demand standard deviation increases. In fact, when standard deviation at 80% of the mean. The result is
the demand standard deviation increases to 120% of the shown in Figure 10. Again, as expected, the required
mean (not shown in Figure 9), distributed AM requires a supply chain–safety inventory increases for all three
 1180 P. Liu et al.
scenarios when CSL increases. The rate of increase
seems to be quite stable for different parts under differ-
ent scenarios. The best performing supply chain scenario
does not change for any of the six parts. Therefore, CSL
is not deemed a sensitive factor in the analysis of the
required safety inventory under different supply chain
scenarios.
5. Conclusion
This paper outlined the effects of AM in the aircraft
spare parts supply chain. Three supply chain scenarios
were presented and their performance analysed in terms
of the required safety inventory. The factors taken into
consideration include demand characteristics, manufac-
turing lead time, logistics lead time and CSL. It is
Downloaded by [University of Louisville] at 18:13 10 February 2015
clearly demonstrated that AM has the potential to change
the conventional configuration of the aircraft spare parts
supply chain to achieve safety inventory reduction; thus
cutting inventory holding cost across the entire supply
chain.
AM technology can be introduced into different
stages of the aircraft spare parts supply chain. The cen-
tralized AM supply chain is more suitable for parts with
low average demand, relatively high demand fluctuation
and longer manufacturing lead time. The distributed AM
supply chain is suitable for parts with high average
demand. It is also suitable for parts with very stable
demand, because in this case the benefit of demand
aggregation in a centralized distribution centre is greatly
diminished. It can also be used for parts with very short
manufacturing lead time even if their demand is low and
unpredictable; because such parts can be produced
on-demand.
This study only focuses on total safety inventory in
the aircraft spare parts supply chain. Note that when AM
technology is used by the MRO, the OEM does not need
to hold any safety inventory. However, the MRO needs
to hold a higher level of safety inventory when com-
pared to the conventional supply chain scenario. Its
inventory holding cost will increase. This may be offset
by the decrease in part cost because of the benefit of
AM technology. However, deploying AM technology
requires substantial initial investment so a full return on
investment analysis is necessary.
In summary, this paper explores the idea of introduc-
ing AM technology into the aircraft spare parts supply
chain. The impact of AM technology on the reduction of
supply chain safety inventory is analysed quantitatively.
The analysis clearly demonstrates the potential of AM
technology to make the aircraft spare parts supply chain
more efficient. Due to the lack of cost data, the analysis
is limited and at an aggregated level. It is unclear
whether the OEM or the MRO or both can benefit from
the use of the AM technology. Most likely the OEM and
the MRO have to develop a strategic partnership in order
to truly realise the potential of AM technology in the air-
craft spare parts industry. The best solution may be for
the OEM to be responsible for AM production and
inventory management at the MRO’s facility. In this
way, the OEM maintains its manufacturing business and
reduces the level of its safety inventory; whereas the
MRO can focus on its core competency.
Notes on contributors
Peng Liu is an Associate Professor at the
Department of Industrial Engineering, Jilin
University, Changchun, P.R. China. He
received the B.S., M.S., and PhD. degrees
in Mechanical Engineering from Jilin
University in 2002, 2006. and 2010,
respectively. Dr Liu’s research focuses on
manufacturing processes and systems, and
engineering education. He has received
several research grants from the National High Technology
Research and Development Program of China and other
agencies.
Samuel H. Huang is a Professor at the
School of Dynamic Systems, the University
of Cincinnati. He was previously Assistant
Professor of Industrial Engineering at the
University of Toledo and Systems Engineer
at EDS/Unigraphics (now Siemens PLM
Software). He received the B.S. degree in
Instrument Engineering from Zhejiang
University, Hangzhou, P. R. China, in 1991
and the M.S. and PhD. degrees in Industrial Engineering from
Texas Tech University, Lubbock, Texas, in 1992 and 1995,
respectively. Dr Huang has been awarded five grants from the
National Science Foundation for his research in healthcare
analytics and manufacturing research and education.
Abhiram Mokasdar is a Master of Science
Graduate in Mechanical Engineering, from
the School of Dynamic Systems, University
of Cincinnati, in December 2012. He
received the Bachelor of Technology degree
in Mechanical Engineering in 2010
from Visvesvaraya National Institute of
Technology, a prestigious university in
India. His research interest includes additive
manufacturing and supply chain management.
Heng Zhou is an Master of Science student
in Mechanical Engineering in the School of
Dynamic Systems at the University of
Cincinnati. He received the B.S. degree in
Mechanical Engineering from Shanghai
Maritime University, Shanghai, P.R. China,
in 2011. His reserch interests are in
development and use of mathematical
optimization tools to solve complex supply
chain management problem.
 Production Planning & Control
Liang Hou is a Professor and Director of
Mechanical and Electrical Engineering,
Xiamen University, China. He received his
PhD. from Tianjin University, China, in
2002, and then worked as a postdoctoral in
Zhejiang University. His research interests
include design methodologies and new
product R&D management for mechanical
equipment, including product family and
platform design and optimization. His researches have been
applied in the R&D activities in the enterprises of machine tool,
engineering machine, and electrical product. He supervised 5
PhD. and more than 30 MS students. He has published more
than 80 papers and has been awarded 15 patents.
Reference
Downloaded by [University of Louisville] at 18:13 10 February 2015
Allen, J. 2006. “An Investigation into the Comparative Costs
of Additive Manufacture vs. Machine from Solid for Aero
Engine Parts.” http://www.dtic.mil/cgi-bin/GetTRDoc?
AD=ADA521730
Allen, J. 2011. “The Potential for Aero Engine Component Man-
ufacture using Additive Layer Manufacturing.” http://www.
cdti.es/recursos/doc/eventosCDTI/Aerodays2011/1D2.pdf
ASTM. 2010. “Standard Terminology for Additive Manufactur-
ing Technologies.” http://enterprise.astm.org/filtrexx40.cgi?
+REDLINE_PAGES/F2792.htm
ATKINS. 2007. “ATKINS: Manufacturing a Low Carbon Foot-
print.” http://www.atkins-project.com/pdf/ATKINSfeasibili-
tystudy.pdf
Baumers, M., C. Tuck, D. L. Bourell, R. Sreenivasan, and
R. Hague. 2011. “Sustainability of Additive Manufacturing:
Measuring the Energy Consumption of the Laser Sintering
Process.” Proceedings of the Institution of Mechanical Engi-
neers, Part B: Journal of Engineering Manufacture 225:
2228–2239. doi: 10.1177/0954405411406044.
Christy, D. P., and J. R. Grout. 1994. “Safeguarding Supply
Chain Relationships.” International Journal of Production
Economics 36: 233–242. doi: 10.1016/0925527394000247.
Feng, C. M., P. J. Wua, and K. C. Chia. 2010. “A Hybrid
Fuzzy Integral Decision-making Model for Locating
Manufacturing Centers in China: A Case Study.” European
Journal of Operational Research 200 (1): 63–73. doi:
10.1016/j.ejor.2008.12.004.
Ferguson, B. R. 2000. “Implementing Supply Chain Manage-
ment.” Production and Inventory Management Journal 41
(2): 64–67.
Hasan, S., and A. E. W. Rennie. 2008. “The Application of
Rapid Manufacturing Technologies in the Spare
Parts Industry.” http://edge.rit.edu/edge/P10551/public/SFF/
SFF% 202008%20Proceedings/Manuscripts/2008-50-Hasan.
pdf
Holmstrom, J., J. Partanen, J. Tuomi, and M. Walter. 2010.
“Rapid Manufacturing in the Spare Parts Supply Chain:
Alternative Approaches to Capacity Deployment.” Journal
of Manufacturing Technology Management 21 (6):
687–697. doi: 10.1108/17410381011063996.
View publication stats
1181
Huang, S. H., S. K. Sheoran, and H. Keskar. 2005. “Computer-
assisted Supply Chain Configuration Based on Supply
Chain Operations Reference (SCOR) Model.” Computers
&Industrial Engineering 48: 377–394. doi: 10.1016/j.
cie.2005.01.001.
Li, L., Q. Su, and X. Chen. 2011. “Ensuring Supply Chain
Quality Performance Through Applying the SCOR Model.”
International Journal of Production Research 49 (1):
33–57. doi: 10.1080/00207543.2010.508934.
McCue, T. J. 2012. “3D Printing Industry will Reach $3.1 Bil-
lion Worldwide by 2016.” http://www.forbes.com/sites/
tjmccue/2012/03/27/3d-printing-industry-will-reach-3-1-bil-
lion-worldwide-by-2016/
Naesens, K., L. Gelders, and L. Pintelon. 2007. “A Swift
Response Tool for Measuring the Strategic Fit for Resource
Pooling: A Case Study.” Management Decision 45 (3):
434–449. doi: 10.1108/00251740710745061.
Reeves, P. 2008. “How the Socioeconomic Benefits of Rapid
Manufacturing can Offset Technological Limitations”.
Paper presented at RAPID 2008 Conference and Exposi-
tion, Lake Buena Vista, FL, May 20–22.
SCC. 2012. “What is SCOR?” http://supply-chain.org/scor
SCW. 2012. “What is a Supply Chain?” http://www.wisegeek.
com/what-is-a-supply-chain.htm
Towill, D. R. 1991. “Supply Chain Dynamics.” International
Journal of Computer Integrated Manufacturing 4 (4):
197–208. doi: 10.1080/09511929108944496.
Tuck, C., R. Hague, and N. Burns. 2007. “Rapid
Manufacturing: Impact on Supply Chain Methodologies
and Practice.” International Journal of Services and
Operations Management 3 (1): 1–22. doi: 10.1504/
IJSOM.2007.011459.
Tzafestas, S., and G. Kapsiotis. 1994. “Coordinated Control of
Manufacturing/Supply Chains Using Multi-Level Tech-
niques.” Computer Integrated Manufacturing System 7 (3):
206–212. doi: 10.1016/0951-5240(94)90039-6.
Verdouw, C. N., A. J. M. Beulens, J. H. Trienekens, and J. G.
A. J. van der Vorst. 2011. “A Framework for Modelling
Business Processes in Demand-driven Supply Chains.”
Production Planning & Control: The Management of
Operations 22 (4): 365–388. doi: 10(1080/09537287).
2010.486384.
Voudouris, V. T. 1996. “Mathematical Programming Techniques
to Debottleneck the Supply Chain of Fine Chemical Indus-
tries.” Computer and Chemical Engineering 20 (1):
S1269–S1274. doi: 10.1016/0098-1354(96)00219-0.
Wall, B., H. Jagdev, and J. Browne. 2007. “A Review of
eBusiness and Digital Business – Applications, Models and
Trends.” Production Planning & Control: The Management
of Operations 18 (3): 239–260. doi: 10.1080/
09537280601127245.
Walter M., J. Holmstrom, and H. Yrjola. 2004. “Rapid Manu-
facturing and its Impact on Supply Chain Management”.
Paper Presented at Logistics Research Network Annual
Conference, Dublin, Ireland, September 9–10.
Zhou, H. G., W. C. Benton, D. A. Schilling, and G. W. Milli-
gan. 2011. “Supply Chain Integration and the SCOR
Model.” Journal of Business Logistics 32 (4): 332–344.
doi: 10.1111/j.0000-0000.2011.01029.x.