Digital Transformation: Moderating Supply Chain Concentration and Competitive Advantage in the Service-Oriented Manufacturing Industry

Abstract

One of the service-based manufacturing concepts emphasizes relationship orientation and building strong customer relationships, while Industry 4.0 enables companies to be proactive in the supply chain. However, to achieve digitally driven growth, service-based manufacturing requires a shift away from the traditional upstream and downstream hierarchy toward a collaborative model. In this study, service-oriented manufacturing companies in the packaging and printing industries are selected as case studies to examine the relationship between supply chain concentration, digital transformation, and corporate competitive advantage from the perspectives of power control and equilibrium. The results show that a high supply chain concentration harms firms’ competitive advantage, especially when power is unevenly distributed. Moreover, digital transformation plays a moderating role in this relationship, suggesting that it is possible to improve firms’ competitiveness and further equalize the power balance by applying digital technologies to supply chain processes. The study revealed significant heterogeneity within the group of companies in terms of ownership type, dual management roles, and company size. In summary, this study makes a unique contribution to the growing research field of supply chain digital transformation. It provides valuable insights from a power balance perspective for service-oriented manufacturing companies seeking to enhance their competitive advantage in a rapidly changing market environment.

Measuring the Broader Value Proposition of Digital Transformation in Supply Chains

“…Emerging technologies not only facilitate operational improvements but also foster innovation and competitive advantage. Tana & Chai (2023) highlight the role of digital transformation in enabling serviceoriented manufacturing industries to shift towards collaborative models, thereby enhancing their competitive positioning [2]. Similarly, Tsipoulanidis & Nanos (2022) emphasize the necessity for supply chains to leverage new business concepts and technologies to remain competitive in the marketplace [5].…”