Global manufacturing value networks: assessing the critical roles of platform ecosystems and Industry 4.0

Abstract

PurposeThe purpose of this paper is to synthesize a manufacturing value network for digital multinationals that combines the global reach of multinationals, the power of platform business models and digitalization. Toward this, the authors assess the critical roles platform ecosystems, and Industry 4.0 play in resolving the key challenges associated with asset specificity, location specificity and information asymmetry, inherent in the conventional business models of manufacturing multinationals.Design/methodology/approachThe authors take an exploratory approach in reviewing industry literature and analyzing implementations of digital technologies in manufacturing and supply chain processes at four large manufacturing multinationals from diverse industry sectors, from electronics to packaged food production. The authors also identify how value-creation activities are relocated, and how players collaborate to create and capture value. Consequently, the authors abstract a framework for global value network of manufacturing multinationals.FindingsWith changing definitions of industry, competition and organizations, the authors’ framework for manufacturing value network establishes the ways digitalization can be integrated in the global businesses of manufacturing multinationals, realizing the combinatorial effect of Industry 4.0 and platform ecosystems. The transformation redefines the ways multinationals have been leveraging their ownership-location-internalization (OLI) advantages. The authors recognize that the multinational orchestrator plays a critical role in creating shared goals for platform participants and governing the dynamics. In addition, the participants' propensity to trust the platform and the perceived trustworthiness of the orchestrator shape the scope and boundaries of the platform.Originality/valueThe authors raise critical questions about the role of multinational orchestrator and trust dimensions. In addition, the OLI-platform paradigm that incorporates the combinatorial effect of platform ecosystem and Industry 4.0 explains how multinationals create and capture value in new ways.

Relationship between social culture, industry 4.0, and organizational performance in the context of emerging economies

“…Industry 4.0 technologies, therefore, contribute to digital transformation. Some examples have been finding in the manufacturing (Das & Dey, 2021;Sophie et al, 2020) and energy (Borowski, 2021) sectors, but they have been more evident in the automotive and service industries (Demeter et al, 2020;Ghobakhloo, 2018). Although they have been developing in industrialized nations, this study, which covers many large and medium-sized companies from various sectors of economic activity, also demonstrates their effectiveness in emerging economies.…”

“…Another example is the recent findings of multinational manufacturing companies. They have recognized the effect that Industry 4.0 has on digital transformation, redefining how these companies have taken advantage of their ownership-location-internalization benefits (Das & Dey, 2021). Although there is no method by which manufacturing companies can select a large number of improvement projects (Sophie, Pellerin, Bellemare & Perrier, 2020) because studies tend to focus on the evaluation and implementation of a single technology, while the transformation of an intelligent plant requires the consolidation and coordination of many initiatives to achieve a global goal.…”

Guest editorialRethinking international manufacturing in times of global turbulence

“…Third, four papers attempt to discuss manufacturing network and supply chain simultaneously, namely Cheng et al (2021), Das and Dey (2021), de Borja Reis (2021) and Thakur-Weigold (2021). Among them, Das and Dey (2021), de Borja Reis (2021) and Thakur-Weigold (2021) indicate the need to rethink and redefine international manufacturing operations when firms change their business model to embrace servitisation/digitalisation or relocate to focus on preferential markets. Specifically, Das and Dey (2021) aim to synthesise a manufacturing value network for digital multinationals that combines the global reach of multinationals, the power of platform business models and digitalisation.…”

“…Among them, Das and Dey (2021), de Borja Reis (2021) and Thakur-Weigold (2021) indicate the need to rethink and redefine international manufacturing operations when firms change their business model to embrace servitisation/digitalisation or relocate to focus on preferential markets. Specifically, Das and Dey (2021) aim to synthesise a manufacturing value network for digital multinationals that combines the global reach of multinationals, the power of platform business models and digitalisation. Similarly, de Borja Reis (2021) combines global value chains, international manufacturing networks and cost management literature to investigate if the world top manufacturing corporations' cost structures are moving from tangible to intangible activities, in other words, increasing the share of services in their portfolios.…”

“…Furthermore, inspired by Engelseth et al (2021), Das and Dey (2021), de Borja Reis (2021) and Thakur-Weigold (2021), the holistic view of manufacturing network and supply chain might need to be further extended to cover other functions or even the entire value chain. In many cases, the internationalisation of manufacturing is not an end, but a starting point followed by the internationalisation of other value chain activities (e.g.…”