Characterisation of the digital transformation in manufacturing

Abstract

Digital transformation (DT) is ushering in significant technological advancements that are set torevolutionize the manufacturing industry. As the impact of DT extends beyond enhancing operationalperformance, its correct application necessitates a comprehensive re-evaluation of long-termstrategic business models (BMs). In detail, DT prompts a profound overhaul of how value is created,delivered, and captured within firms, necessitating a process known as business model innovation(BMI). This shift moves beyond incremental improvements traditionally favored in manufacturing,where existing technologies are simply improved or optimized. Instead, today's industry demandsmore radical and structural changes driven by rapid technological progress, shorter product lifecycles,and increasing environmental concerns. These changes require manufacturing innovations that notonly adapt but also transform production systems to ensure competitiveness and sustainability: i.e.,production research must focus not only on technology, but also, and especially on its application.Traditionally, technical literature and innovation-related literature have developed in separate silos,focusing on technical solutions and their market strategies independently. This division is furtherworsened by a lack of proper utilization of the business model (BM) concept, which impedes effectiveintegration between these two critical areas. Recent academic efforts have begun to integrate BMconsiderations into descriptions of the Manufacturing DT process (MDT). However, these discussionsoften focus narrowly on value-capturing mechanisms, such as pay-per-use, subscription, andownership models. A more holistic understanding of the BM, which encompasses all elements of afirm’s strategy and operations, remains relatively underexplored. Addressing this challenge,manufacturing researchers need a framework that allows them to understand and incorporate aholistic business model (BM) approach into their analyses. This is crucial for capturing the fullspectrum of strategic and operational elements of innovation.This dissertation aims to bridge this gap by adopting a broader BM perspective in line with innovationand operational management studies. Through a descriptive analysis of BM components and theirinteractions within the context of DT, this research develops a blueprint that encapsulates how MDTaspects are integrated into the holistic BM and BMI processes. By examining the existing literatureand real-life DT projects in manufacturing companies, this study provides a comprehensiveframework that assists scholars and practitioners in aligning manufacturing strategies with theoverarching components of the BM, facilitating effective navigation through the complexities of BMItriggered by DT.

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