Duke Fuqua Insights: To Stock or Not to Stock? 3D Printing and the Future of Spare Parts

Duke Fuqua Insights: To Stock or Not to Stock? 3D Printing and the Future of Spare Parts


(bright music)
– [Narrator] Spare
parts manufacturers need
plenty of parts on hand
in case something breaks.
That’s their business model.
But no one knows what will break and when
so they have to stock a variety of parts
in large quantities.
That’s expensive and inefficient.
The rise of on-demand 3D
printing means that in theory
those manufacturers could soon print parts
only once they’re needed.
But Jeannette Song, an
operations professor
at Duke University’s
Fuqua School of Business
found it’s not quite that simple.
3D printing takes time,
which means not having parts on hand
exactly when they’re needed.
That’s a problem.
Utility companies, for
example, use a lot of parts
and need them fast when power goes out.
They have huge warehouses in every market
to guarantee a responsive part supply
and is not feasible for them to wait
for a part to be printed.
Song found a hybrid approach
having some parts on hand and
printing others when needed
works best for most companies.
Abandoning all inventory is too risky,
but printing some parts
on demand can save money.
What’s difficult is knowing which to print
and which to stock.
So Song created a mathematical model that
for a given firm, can
calculate which parts
are likely to be needed more often
and should be kept in stock
and which parts can be printed
on demand without diminishing
a firm’s ability to function effectively.
In most cases, Song
found most manufacturers
would not even use the 3D printing much,
but can save a lot of money.
Ultimately, a little
flexibility goes a long way.
(bright music)

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