The interplay between digital transformation and governance mechanisms in supply chains: evidence from the Italian automotive industry

PurposeThis paper aims to investigate the effect of specific subsets of digital technologies and governance mechanisms (i.e. relational and contractual) on the efficiency of the automotive supply chain (SC).Design/methodology/approachBuilding on the Transaction Costs Economic (TCE) theory, and on the literatures on the governance and Digital Transformation of SCs, the research employs a multi-respondent survey on a sample of 101 Italian automotive suppliers. It analyses the interplay between investments in network and physical–digital interface technologies and buyer–supplier relationship governance models in a joint product development effort. The related effects on costs, from the automotive suppliers' perspective, are considered.FindingsThe results confirm the TCE assumptions on governance mechanisms being appropriate to enhance cost performance, but in particular show that digital technologies shape the governance of buyer–supplier relationships with different patterns. The features of synchronisation and accessibility, as ensured by network technologies, are found to strengthen the impact of contractual governance, while the adoption of physical–digital interface technologies, and their enhanced features of virtualisation and traceability, further enhance the impact of relational governance on the efficiency improvements of suppliers.Practical implicationsSC actors need to recognise the importance of long-term collaboration and superior coordination through investments in specific subsets of digital technologies, to ensure a higher product and production data codifiability, transparency and thus integration at both an intra- and an inter-firm level.Originality/valueThis study is one of the first to have considered Digital Transformation in SCs from the suppliers' perspective and its implications on the efficiency of relationship governance with buyers.

Spatial Clustering of Foreign Direct Investment: The Case of Japanese Automotive Suppliers in Mexico

The arrival of Japanese investment in the Mexican automotive industry has caused an increase in the economic dynamism of the Bajio region, especially since the entry into force of the Mexico-Japan Economic Partnership Agreement in 2005. Previous research has been conducted from different perspectives explaining the spatial distribution and agglomeration of Japanese enterprises in host countries; however, studies that employ measurements of spatial clustering for Japanese firms are still scarce. For the present research, a unique spatial georeferenced database of Japanese automotive suppliers was created to identify the clustering patterns of firms. The results suggest that Japanese automotive supplier firms in Mexico favor spatial proximity. The use of spatial measurements of concentration provides evidence to further understand the presence of agglomeration of Japanese firms in the automotive industry.

Environmental sustainability and reshoring in the automotive industry: a multiple cases study

Reshoring – the reversal of offshoring strategies – referring to a firm’s decision to bring previously offshored manufacturing activities back or close to the home country has become a key theme in the industrial location literature. This thesis investigates the interdependence between reshoring, environmental sustainability and supply chain reconfiguration through a multiple case study in the automotive suppliers sector. The purpose is to explore the perception of environmental sustainability, to investigate reshoring decision-making and to analyse the need for supply chain reconfiguration in the context of environmental sustainability. Research is far from reaching an in-depth understanding of how reshoring decision-making takes place concerning environmental sustainability particularly in the automotive supplier sector. The thesis gathers qualitative data from 17 interviews with experienced managers from nine internationally-active, mainly Tier-1 automotive suppliers. The level of influence of environmental sustainability on reshoring decisions is not near to the top but on the rise. Issues such as cost and quality, efficiency of operations and qualified employees are more important than environmental sustainability to strengthen competitive advantage. The conventional idea of reshoring does not apply very well to Tier-1 automotive suppliers, since a key concern is bringing manufacturing sites closer to the OEM or to other suppliers in the supply chain regardless of the supplier’s home country. The findings from the study are used to develop models and frameworks of both reshoring and the relationship between reshoring and environmental sustainability. This contribution to knowledge is used to develop propositions for further research. The findings are linked to management theories such as Transaction Cost Economics and the Resource-Based View to deepen the contribution to theory. Some of the models and frameworks, such as the drivers and barriers for reshoring and environmental sustainability, together with the decision-making process and decision criteria for supply chain reconfiguration, have been developed so they can be used by practitioners to assist them with reshoring and supply chain management activities.

Differences Between Supplier Development Programme of Foreign and Local Malaysian Automotive Suppliers

Research into supplier development has raised issues on the buyer’s relationship with the supplier. A buyer with collaborative relationship would have more interest in supplier development. From the viewpoint of the suppliers, buyers who provided assistance could help the suppliers in developing their capability, a situation that might be particularly relevant in developing and emerging countries. The automotive manufacturers have implemented supplier development programmes for their suppliers, both in developed and developing countries. This raises a question on supplier development programmes in developing countries: How do supplier development programmes differ between a local (Malaysian) supplier and a foreign (non-Malaysian) supplier for Malaysian automakers (buyers)? In this research, interviews were conducted at three supplier organisations, of which one was Australian and two were Malaysian, where all three were suppliers for a Malaysian automaker. This study found that the Malaysian and Australian suppliers differed in supplier categories, customisation versus standardised products and buyer involvement. The study suggests that buyer differences with regard to supplier relationship, supplier commitment, type of product and size of supplier organisation play a role in supplier development.

Achieving automotive suppliers’ mass customization through modularity

Purpose Previous literature tends to combine postponement and modularity or view them as parallel factors to achieve mass customization (MC) while ignoring the sequence of a firm to design and implement operations and supply chain strategy. Based on a customer-oriented strategy and theories of organizational information processing theory, three-dimensional (3D) concurrent engineering and resource dependency, the purpose of this paper is to propose a sequential model reflecting the sequence of practices as well as an overview picture for a firm to achieve MC. Design/methodology/approach The model links three company antecedents – postponement orientation, operational alignment and information sharing, to three company supply chain practices – product and process modularity and supplier segmentation. These practices, in turn, lead to the company’s MC capabilities. The proposed model is tested with a data set collected from automotive suppliers in China and in the USA. Structural equation modeling is used to analyze the data and test the model. Findings The results suggest that, for suppliers to achieve MC, postponement orientation and operational alignment are vital antecedents. The results also reveal the important responsibility and role of information sharing practices in coordinating suppliers’ modularity practices. Originality/value This research provides three findings that are of value to both academicians and practitioners of supply chain management. First, this study originally proposed and empirically tested that a postponement orientation is an antecedent of product and process modularity and supplier segmentation to achieve MC in the automotive sector, contrary to the traditional view of parallel relationships for both. Second, it developed and verified measures of operational alignment and supplier segmentation for future research use. Third, the vital role of information sharing to coordinate internal and external supply chain practices to achieve MC is empirically supported.