Customizing Customization in a 3d Printing-Enabled Hybrid Manufacturing Supply Chain

At-scale manufacture of customized products often requires both traditional processes and additive manufacturing that is enabled through 3D printing (3DP). Such 3DP-enabled hybrid manufacturing supports two forms of customization. First, customizing the mix of traditional and 3DP processes determines the degree of customization in the manufacturing process. Second, customization of the 3DP-enabled supply chain configuration. This work thus explores the relationship between the degree of customization and the supply chain configuration strategies for 3DP customization and its implications on profitability. We consider a two-echelon manufacturer-retailer supply chain that distributes customized products online and offline based on customers’ channel preferences. In our research, the Stackelberg Game model is used to study decision-making in a non-cooperative game mode between the leader (manufacturer) and the follower (retailer). By analyzing two models: the centralized manufacturer-customized model (Model M) and the decentralized retailer-customized model (Model R), it is found that under certain conditions, it is optimal for the manufacturer/retailer to offer consumers fully-customized 3DP products rather than products manufactured using traditional customization technology. In addition, we show that irrespective of Model M or Model R, an increase in consumers’ offline channel preference will lead to a drop in overall profits for the manufacturer/retailer. Finally, we found that under the R model, the retailer should pay attention to both its own 3DP production cost and the manufacturer's cost. Our findings have practical relevance for firms seeking to gain a competitive advantage by deciding on the degree of customization and channel strategies for 3DP manufacturing