Effects of customer’s investment in ICT on partners’ decisions through the supply chain: an empirical study of the manufacturing industry in Thailand

The Role of Leader and the Effect of Customer’s Smart Factory Investment on Firm’s Industry 4.0 Technology Adoption in Thailand

“…Five items were used to measure transformational leadership as the self-perception of leadership behaviors, with scale values from 1 to 5 (1 = Not at all, 2 = Once in a while, 3 = Sometimes, 4 = Fairly often, and 5 = Frequently). The effect of a customer's smart factory investment construct was measured using a 4-point Likert scale based on the one applied by Intalar and Jeenanunta (2019), ranging from 0 to 3 (0 = No, 1 = Little, 2 = Somewhat, and 4 = Much). Technology adoption was measured by 12 items for 2 dimensions: a firm's OT adoption and a firm's IT adoption.…”

“…Nguyen's (2009) study about the impacts of internal and external forces on IT adoption shows that customer pressure positively affects the IT adoption of manufacturers, especially SMEs. Similarly, Intalar and Jeenanunta's (2019) research has confirmed the positive influence of a customer's information and communication technology (ICT) investment on a supplier's ICT adoption. Thus, this study includes the effect of a customer's smart factory investment as another empirical factor.…”

“…In other words, Industry 4.0 makes customers and suppliers or partners work closely through real-time data sharing (Alam and Noor, 2009). By upgrading an ICT system, many customers request their suppliers to improve their business transactions and operation management (i.e., control, monitor, and exchange information) (Intalar and Jeenanunta, 2019). Customers encourage their suppliers to adopt compatible technologies in order to enhance the efficiency of information communication and increase their reliability (Youssef et al, 2012).…”

“…A previous study on the Japanese automotive supply chain network (Sako, 2004) has explored the coordination between customers and the next-tier suppliers in procurement and joint research and development (R&D) activities. Customers may influence their suppliers to make a strategic planning decision on a particular technology investment related to their customer investment plan (Intalar and Jeenanunta, 2019). Therefore, it is crucial to investigate the role of customer pressure in the technology implementation by suppliers.…”

“…This study focuses on digitization and automation. Customers' smart factory investments refer to customer investments in Industry 4.0 technologies, both hardware and software, to improve business transactions, information processing capacity, production efficiency, automation in processes, and abilities to monitor/control the service and product value chain (Youssef et al, 2012;Intalar and Jeenanunta, 2019;Berawi, 2020). According to an important role of customer pressure in the supply chain, the effect of a customer's smart factory investment is defined as the pressure exerted by the customer in influencing his/her suppliers to invest in and adopt technologies related to Industry 4.0/a smart factory.…”