Servitization and supply chain integration: An empirical analysis

Syed Aamir Ali Shah, Muhammad Shakeel Sadiq Jajja, Kamran Ali Chatha and Sami Farooq

International Journal of Production Economics, 2020, vol. 229, issue C

Abstract: Supply chain literature highlights the importance of the role of supply chain partners in a manufacturer's journey towards servitization. However, there is scarce empirical research seeking to explain supply chain level factors that enable servitization. Using resource dependence theory, we argue that servitization orientation encourages organizations to enhance supplier, internal, and customer integration (three dimensions of supply chain integration) which in turn enhance servitization (basic and advanced service provision) ultimately affecting firm performance. Covariance-based structural equation modelling is applied to test the hypotheses using data of 307 manufacturing companies obtained from the sixth version of International Manufacturing Strategy Survey. Empirical examination provides evidence that servitization oriented firms enhance internal integration and the integration with key suppliers and customers. However, there is an uneven relationship between firm's integrative practices with suppliers and customers and the provision of basic and advanced services such that enhanced provision of basic services requires more supplier integration while enhanced provision of advanced services requires more customer integration. Also, the performance implications of different types of service provision are found to be unequal. These findings suggest that servitization oriented firms need to improve a specific dimension of supply chain integration to enhance a particular type of service provision. The paper makes an initial attempt to empirically explore the enabling role of supply chain integration in facilitating servitization.

Keywords: Servitization; Supply chain integration; Firm performance; Empirical research; International manufacturing strategy survey (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:229:y:2020:i:c:s092552732030147x

DOI: 10.1016/j.ijpe.2020.107765

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