Supplier interfaces in digital transformation: an exploratory case study of a manufacturing firm and IoT suppliers

Journal article, 2023

Purpose: The purpose of this paper is to characterize the interfaces between manufacturing companies and the Internet of Things (IoT) suppliers involved in their digital servitization. Design/methodology/approach: This paper builds on an explorative case study of a manufacturing firm and its IoT suppliers. This paper relies on the Industrial Network Approach to study interfaces between buying firms and their suppliers. Findings: This paper identifies three distinct types of supplier interfaces: connected, digital and digital-physical. They all contain technical resource interfaces with additional organizational and/or technical complexities that need to be managed. Connectivity, an Agile approach to software development and strong technical dependence emerged as key factors that impact the interactions between manufacturing firms and IoT suppliers and how their resources are combined. Practical implications: This paper offers managerial implications regarding the importance of internal organization (such as appropriate cross-functional teams) to manage the dynamics of collaborations required by digital technologies, maintain interactions with IoT suppliers and identify and manage interdependences between IoT suppliers. Building close relationships with suppliers of crucial infrastructure (e.g. IoT cloud platform and data security systems) can also be beneficial for manufacturing firms to reduce risks. Finally, attention should be given to IoT technology strategy, which impacts both digital and digital-physical supplier interfaces. Originality/value: In digital servitization, manufacturing firms are heavily reliant on external resources for IoT technology. Despite this, few studies have investigated the characteristics of their interfaces with IoT suppliers, how these can be managed and how resources are combined.