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

Emilio Paolucci (Department of Management and Production Engineering, Politecnico di Torino, Turin, Italy)
Elena Pessot (Institute of Intelligent Industrial Technologies and Systems for Advanced Manufacturing, National Research Council of Italy, Milan, Italy)
Riccardo Ricci (Department of Management and Production Engineering, Politecnico di Torino, Turin, Italy)

International Journal of Operations & Production Management

ISSN: 0144-3577

Article publication date: 19 July 2021

Issue publication date: 8 September 2021

1270

Abstract

Purpose

This 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/approach

Building 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.

Findings

The 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 implications

SC 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/value

This 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.

Keywords

Acknowledgements

The authors want to acknowledge ANFIA and the Chamber of Commerce of Turin for their collaboration. This work has been partially supported by “Ministero dell'Istruzione, dell'Università e della Ricerca”, Award “TESUN-83486178370409 finanziamento Dipartimenti di Eccellenza CAP. 1694 TIT. 232 ART. 6”

Citation

Paolucci, E., Pessot, E. and Ricci, R. (2021), "The interplay between digital transformation and governance mechanisms in supply chains: evidence from the Italian automotive industry", International Journal of Operations & Production Management, Vol. 41 No. 7, pp. 1119-1144. https://doi.org/10.1108/IJOPM-09-2020-0672

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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