Chapter 3 How is production changing?

The unprecedented Covid-19 crisis revealed the scale and scope of a new type of economy taking shape in front of our very eyes: the digital economy. This book presents a concise theoretical and conceptual framework for a more nuanced analysis of the economic and sociological impacts of the technological disruption that is taking place in the markets of goods and services, labour markets, and the global economy more generally. This interdisciplinary work is a must for researchers and students from economics, business, and other social science majors who seek an overview of the main digital economy concepts and research. Its down-to-earth approach and communicative style will also speak to businesses practitioners who want to understand the ongoing digital disruption of the market rules and emergence of the new digital business models. The book refers to academic insights from economics and sociology while giving numerous empirical examples drawn from basic and applied research and business. It addresses several burning issues: how are digital processes transforming traditional business models? Does intelligent automation threaten our jobs? Are we reaching the end of globalisation as we know it? How can we best prepare ourselves and our children for the digitally transformed world? The book will help the reader gain a better understanding of the mechanisms behind the digital transformation, something that is essential in order to not only reap the plentiful opportunities being created by the digital economy but also to avoid its many pitfalls

ROLLS-ROYCE: A Circular Economy Business Model Case

This report presents the case study of Rolls-Royce’s ‘TotalCare’ business model for widebody aircraft aero engines. It was chosen due to the commercially successful development of a whole lifecycle, servitised value proposition and associated business model. Insights for business guidelines This case study highlights the following key insights relevant to companies in similar industries or sharing a similar context: Revenue mechanisms that align interests between a company and its customers can create powerful circular business models. Although Rolls-Royce engines are sold to the aircraft owner, the TotalCare service package means Rolls-Royce retains responsibility for ensuring the product performs to customer requirements. The power-by-the-hour charging mechanism (revenues generated per engine flight hour) keeps incentives aligned by rewarding Rolls-Royce when the product is working as needed, and penalising it when it is not. This mechanism and alignment between the OEM and its customers encourages continuous improvement and collaboration. This also drives the extension of asset lifetime while optimising/reducing repair and maintenance costs. This results in reduced waste, increased resource efficiency, and enhances the asset’s value over its lifetime. Service-focused offerings that enable manufacturers to gain insight and intelligence on the use and performance of their products can lead to better customer service, improved product/service design, and resource efficiency. TotalCare provides opportunities for constant insight and learning around customer requirements. This insight is enabled by the collection of engine usage and performance data, as well as through deep customer relationships. This produces ongoing improvements and evolution of the value proposition itself as well as expansion of value added services. This means that the customer is no longer buying ‘just’ a product, but gaining expanded value addressing a suite of needs and requirements. This provides greater flexibility for manufacturers to manage the underlying asset within a service contract, focusing on outcomes for the customer. Servitised performance-based models can be important enablers for ‘Resource Recovery’ as well as ‘Re-condition’ / ‘Re-make’ circular business model patterns. In the example of TotalCare, Rolls-Royce’s service contract includes the provision of maintenance services which it has the responsibility and flexibility to deliver in an optimal way. This ensures that the ‘life’ and utility of the engine product is kept at the right level over its lifetime. Furthermore, the service contract gives the manufacturer visibility of the product throughout its lifecycle. This is especially relevant at the end-of-cycle where it creates an opportunity for product take-back and recovery of high value materials through close-loop recycling. When transitioning from a product-focused to a service-focused business model, the installed base becomes a key asset and driver of revenue and profitability. In product-focused business models, revenue is driven by the product sales price, and potentially some recurring revenue from maintenance services and sale of consumables and add-ons. In a service-focused business model, the installed base of products in use can become the drive

Sustainability in the Aerospace, Naval, and Automotive Supply Chain 4.0: Descriptive Review

The search for sustainability in the Supply Chain (SC) is one of the tasks that most concerns business leaders in all manufacturing sectors because of the importance that the Supply Chain has as a transversal tool and due to the leading role that it has been playing lately. Of all the manufacturing sectors, this study focuses on the aerospace, shipbuilding, and automotive sectors identified as transport. The present study carries out a descriptive review of existing publications in these three sectors in relation to the sustainability of the Supply Chain in its 4.0 adaptation as an update in matters that are in constant evolution. Among the results obtained, Lean practices are common to the three sectors, as well as different technologies focused on sustainability. Furthermore, the results show that the automotive sector is the one that makes the greatest contribution in this sense through collaborative programs that can be very useful to the other two sectors, thus benefiting from the consequent applicable advantages. Meanwhile, the Aerospace and Shipbuilding sectors do not seem to be working on promoting a sustainable culture in the management of the Supply Chain or on including training programs for their personnel in matters related to Industry 4.0

Additive Manufacturing Technology for Spare Parts Application: A Systematic Review on Supply Chain Management

Additive manufacturing (AM) is gaining interest among researchers and practitioners in the field of manufacturing. One major potential area of AM application is the manufacturing of spare parts, which affects the availability of the operation and supply chain. The data show that the application and adoption of AM has contributed to a reduction in lead times and inventory, which also contributes to a reduction in holding costs. This paper provides a review of recent work on the application of AM technology specifically for spare parts. The review shows that there are supply chain opportunities and challenges to the adoption of AM in spare parts within various application sectors. Our research reviews both the quantitative and qualitative models used for analysis to meet the emerging needs of the industry. The review also shows that the development of technology and its application is still emerging; therefore, there will be further opportunities to develop better spare parts supply chains to support AM applications. This paper concludes with future research directions. 2022 by the authors. Licensee MDPI, Basel, Switzerland.Acknowledgments: This study was made possible by the Qatar University grant# M?QJRC?2020?6. The APC was made possible through student grant #QUST?1?CENG?2022?302. The findings of this study are solely the responsibility of the authors.Scopus2-s2.0-8512929378

A review of composite product data interoperability and product life-cycle management challenges in the composites industry

A review of composite product data interoperability and product life-cycle management challenges is presented, which addresses “Product Life-cycle Management”, developments in materials. The urgent need for this is illustrated by the life-cycle management issues faced in modern military aircraft, where in-service failure of composite parts is a problem, not just in terms of engineering understanding, but also in terms of the process for managing and maintaining the fleet. A demonstration of the use of ISO 10303-235 for a range of through-life composite product data is reported. The standardization of the digital representation of data can help businesses to automate data processing. With the development of new materials, the requirements for data information models for materials properties are evolving, and standardization drives transparency, improves the efficiency of data analysis, and enhances data accuracy. Current developments in Information Technology, such as big data analytics methodologies, have the potential to be highly transformative

The impact of direct digital manufacturing on supply chain operations, cost and environmental performance in an aerospace application

Industry 4.0 concepts, such as direct digital manufacturing (DDM), are expected to change the world, the society and the industry within the coming decades. This study explores the potential implications of DDM on supply chain operations by performing a case study. It assesses the impact of distributed production capabilities enabled by additive manufacturing (AM) on the life cycle cost and environmental impact in an aerospace application. It builds on a previous life cycle assessment (LCA) conducted by GE to compare the environmental impacts of using fuels nozzles produced via additive and conventional manufacturing over a future period of 30 years. Here, simulation models are developed to represent the aftermarket of the LEAP engine based on current and forecasted airline fleets for US and Canadian airline operators. Three supply chain operation scenarios are considered: (1) conventional manufactured at a central GE manufacturing plant at a high volume; (2) additive manufactured, high-volume at the same plant; and (3) de-centralized, low-volume, additive manufactured at 7 identified demand locations. 648 experiments were run to capture all relevant combinations of service levels, electricity mix, carbon pricing, and electric truck adoption. Production, distribution, and energy consumption were simulated based on information from publicly available sources. Environmental impacts on resource availability, climate change, human health and ecosystem quality were assessed using an integrated hybrid LCA model developed by the United States (US) Department of Defense (DOD). Data-envelopment analysis was used to benchmark the supply chain operation systems based on their cost, environmental and supply chain performance. Both additive production systems show stronger efficiencies than the traditional manufacturing system. The de-centralized system benefits from its flexibility and locations that already contain high amounts of renewable energy highlighting the significance of the site selection process. The centralized system requires inventory to be competitive but shows benefits due to economies of scale and strategic investments that would not be justified for smaller facilities. The applied methodology has shown plausible results over all experiments and can therefore be recommended for decision makers from private and public sectors for benchmarking their alternatives when considering cost and environmental criteria

Selection of obsolescence resolution strategy based on a multi criteria decision model

A component becomes obsolete when it is no longer available from its original manufacturer in its original form. Component obsolescence is a significant problem in the electronics industry. There are different strategies employed to address this problem, for example, using an alternative part, life time buy, redesign etc. Often, techniques used in industry select one of these options based on the most economical solution as determined by minimizing direct costs. However, there are factors other than cost, such as the number of suppliers, time constraints, reliability of the solution etc., which may play a crucial role in determining an overall best decision. In addition, there are multiple stakeholders like design, operations, manufacturing, sales, service etc., who might have different opinions when it comes to obsolescence management. This research provides a multi criteria decision model that will consider the trade-offs among multiple factors and provide the decision maker solution that will be acceptable to a wide variety of stakeholders as well as being viable from the company\u27s perspective. The model is based on multi attribute utility theory. It will provide the stakeholders a platform to express their preferences and experience in the decision process. And, based on the overall utility value, the most suitable obsolescence resolution strategy for a specific application will be provided. The research provides a hypothetical case study in order to illustrate the application and usage of the model

Investigating contingent adoption of additive manufacturing in supply chains

PurposeThe purpose of this research is to investigate the contingent adoption of Additive Manufacturing (AM) and propose a typology to evaluate its adoption viability within a firm's supply chain.Design/methodology/approachBy conducting semi-structured interviews of practitioners with deep knowledge of AM and supply chains from diverse industries, this research explores the contingent factors influencing AM adoption and their interaction.FindingsWhile the AM literature is growing, there is a lack of research investigating how contingent factors influence AM adoption. By reviewing the extant literature on the benefits and barriers of AM, we explain the underlying contingencies that enact them. Further, we use an exploratory approach to validate and uncover underexplored contingent factors that influence AM adoption and group them into technological, organizational and strategic factors. By anchoring to a selected set of contingent factors, a typological framework is developed to explain when and how AM is a viable option.Research limitations/implicationsThis study focuses on specific industries such as automotive, machine manufacturing, aerospace and defense. Scholars are encouraged to explore the contextual factors affecting AM adoption in particular industries to expand our findings. The authors also acknowledge that the robustness of their framework can be enhanced by integrating the remaining contingent factors.Practical implicationsThe developed typological framework provides a pathway for practitioners to see how and when AM can be useful in their supply chains.Originality/valueThis is the first paper in the supply chain management literature to synthesize contingent factors and identify some overlooked factors for AM adoption. The research is also unique in explaining the interaction among selected factors to provide a typological framework for AM adoption. This research provides novel insights for managers to understand when and where to adopt AM and the key contingent factors involved in AM adoption.</jats:sec

Additive Manufacturing in After-Sales Service Supply Chains

Additive Manufacturing (AM, also known as 3D printing) is developing into a powerful complement to more conventional manufacturing (CM) methods. In comparison to CM methods such as milling, drilling, casting and forging, AM technologies build complete parts by adding materials layer upon layer without using any dedicated tooling. The resulting ability to produce complex structures without lengthy and expensive setup procedures could turn out particularly valuable for the low-volume spare parts business. Short AM lead times are likely to significantly improve the balance between spare parts inventory investment and system downtime. Generic AM processes could relax the dependence on suppliers and therefore decrease risks and costs associated with supply disruptions. Ultimately, AM could even enable the implementation of a decentralized production concept that holds the promise of increased supply chain responsiveness at low costs. However, it is necessary to deconstruct these concepts and to separate the hype from reality to leverage the potentials of AM technology in after-sales service supply chains. In this dissertation, we aim to contribute to this undertaking by offering a scientific perspective on how and to what extent after-sales service supply chains can benefit from AM technology. To that end, we develop and apply techniques from the field of Operations Research to learn from the various case studies that were conducted at different organizations throughout this research

Data-driven review of additive manufacturing on supply chains: Regionalization, key research themes and future directions

Additive manufacturing (AM) has the potential to greatly impact supply chains in a number of positive ways, particularly in regional and remote locations. This study aimed to identify the impact and application of AM on regional supply chains (RSCs) and address the associated challenges while promoting the sustainable use of this technology. Therefore, this study implemented a streamlined evaluation text mining method that employed Latent Dirichlet Allocation (LDA)-based modeling for robust content analysis. Over the past 19 years (2004–2022), there has been a significant increase in the number of journal articles that center on AM in supply chains. Through an extensive analysis of 341 published papers, five main research themes were identified: manufacturing, environment, costs, logistics, and maintenance. The identification of a gap in research in regional locations is significant as they often face unique challenges in their supply chains, such as limited access to technology and required infrastructure and the availability of resources. These challenges may have a different impact on the implementation of AM. Further, the possible impact of using AM in the recovery of RSCs after the COVID-19 pandemic is substantial and can bring about several positive sustainable changes, including increased responsiveness to changing demands, shorter production lead times, lower material usage and waste, customizability, localized production, energy efficiency, and reduced carbon dioxide and gas emissions