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Economic implications of equipment sharing under cloud manufacturing

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  • Hu, Jiahong
  • Wang, Kangzhou
  • Liu, Yongkui

Abstract

In the development of new information and communication technologies, cloud manufacturing (CMfg) has emerged as a novel and collaborative manufacturing model that enables original equipment manufacturers (OEMs) and clients to share their manufacturing equipment with other clients who do not own equipment. This study focuses on business-to-business (B2B), OEM-to-business (O2B), and B2B&O2B sharing scenarios under CMfg and develops an analytical framework to explore the implications of equipment sharing on retail price, ownership, usage, and environment. Compared with the traditional selling model, the three sharing scenarios result in either higher or lower retail price, ownership, usage, and environmental impact depending on clients' operation cost. Specifically, the higher the operation cost, the lower the retail price. In the B2B scenario, higher ownership, usage, and environmental impact appear only if the operation cost and platform service level are synchronously high/low. Meanwhile, higher ownership and lower usage and environmental impact in B2B&O2B only come with low operation cost. O2B and B2B&O2B surprisingly have the same sharing implications as they involve the same number of equipment units, usage, and environmental impact. Furthermore, this study explores the influence of other crucial factors, such as commission fee, which has opposite effects on ownership in B2B and B2B&O2B, and sharing's effect on the disparity of ownership between heterogeneous clients.

Suggested Citation

  • Hu, Jiahong & Wang, Kangzhou & Liu, Yongkui, 2022. "Economic implications of equipment sharing under cloud manufacturing," International Journal of Production Economics, Elsevier, vol. 254(C).
    • Handle: RePEc:eee:proeco:v:254:y:2022:i:c:s0925527322002092
    DOI: 10.1016/j.ijpe.2022.108627
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    References listed on IDEAS

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    2. Jun Pei & Ping Yan & Subodha Kumar & Xinbao Liu, 2021. "How to React to Internal and External Sharing in B2C and C2C," Production and Operations Management, Production and Operations Management Society, vol. 30(1), pages 145-170, January.
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    4. Apostolos Filippas & John J. Horton & Richard J. Zeckhauser, 2020. "Owning, Using, and Renting: Some Simple Economics of the “Sharing Economy”," Management Science, INFORMS, vol. 66(9), pages 4152-4172, September.
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    Keywords

    Cloud manufacturing; Sharing economy; OEM; B2B; O2B;
    All these keywords.

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