The Combined Effects of Digitalization and Servitization on Manufacturing Enterprise Performance:A Fuzzy-set Qualitative Comparative Analysis
With the emergence and development of a new generation of digital technologies,such as artificial intelligence,the Internet of Things,big data,cloud computing,and blockchain,more and more manufacturing companies are going digital,i.e.,using digital tech-nologies to transform organizational processes,create new value,and generate new economic growth.At the same time,the increas-ingly service-oriented economy has led many manufacturing com-panies to go service-oriented,i.e.,the process of bundling services with products,creating new value for customers.and generating revenue streams from these services.Although digitalization and servitization are different transformational directions,they are com-plementary in nature from a value creation perspective,and many manufacturing companies are therefore driving both digitalization and servitization at the same time.Although a few scholars have paid attention to the linkage between digitization and servitization on firm performance,the literature has viewed digitization and servitization as a holistic concept and has mainly used marginal analysis techniques such as regression analysis to explore them.In fact,digitization often involves dif-ferent processes in a firm's operations,and the types of services provided by the firm are diverse.According to the Supply Chain Operations Reference Model(SCORM),there are five main areas of business process management:planning,purchasing,manufac-turing,delivery,and returns.Digitization is not simply the use of digital technology;it is a radical change to a company's existing management processes,helping it to redefine its value proposition and organizational identity.Therefore,digitization should involve all business processes within the enterprise.Furthermore,the ser-vice-oriented logic suggests that basic and advanced services are the two main types of service-oriented manufacturing firms.While basic services provide functional support for manufactured prod-ucts mainly through transactional agreements,advanced services are more customer-centric and go beyond basic product functional support.In order to gain further insights into the linkage effects of digitization and servitization on firm performance and overcome the limitations of marginal analysis techniques,this paper will take a grouping perspective and attempt to answer the following research questions:Which digitization and servitization segmentation di-mensions constitute groupings that impact the high and non-high performance of manufacturing firms?Based on the supply chain operations reference model and the service-dominant logic,we explore the combined effects of dif-ferent sub-dimensions of digitalization and servitization on firm performance.Using the fuzzy-set qualitative comparative analyses approach to analyze survey data from 272 Chinese manufactur-ing companies,we find the only path that allows manufacturing companies to achieve high firm performance,that is,high levels of delivery process digitalization,basic services,and advanced ser-vices as core conditions,and high levels of planning,procurement,and manufacturing process digitalization as peripheral conditions.In contrast,although there are two paths that lead to non-high firm performance,both paths are sharing the same core conditions,that is,the non-high levels of manufacturing,delivery,return process digitalization,and advanced service.We contribute to the existing literature by revealing how the combinations of different dimen-sions of digitalization and servitization generate distinct impacts on high and non-high firm performance from a configurational per-spective.This paper has good theoretical value and practical significance.At the theoretical level,firstly,the existing digitalization literature mainly investigates the impact of the use of different digital tech-nologies or the overall digitalization strategy on firm performance from the perspective of strategic information systems.In contrast,this paper is based on the supply chain operation reference model and innovatively reveals the differences in the impact of digitiza-tion of different management processes on enterprise performance,which enriches the existing digitization literature.Second,existing studies have primarily explored the interplay between digitization and services,as well as the impact of their binomial interaction on firm performance.Instead of those kinds of studies,this one shows how different aspects of digitization and servitization are connect-ed in many ways.This helps us understand how digitization and servitization affect each other more deeply.Third,in contrast to studies that use marginal analysis techniques to explore the impact of digitization and servitization on firm performance,this paper re-veals that the linkage effect of digitization and servitization on firm performance is causally asymmetric,i.e.,the grouping that leads to high firm performance cannot be used to explain non-high firm performance,which contributes to a richer understanding of digiti-zation and servitization-related phenomena.At a practical level,the findings of this paper can help manufac-turing companies re-examine their current digitalization and ser-vitization strategies.Firstly,in order to stand out in a competitive marketplace,manufacturing companies,especially small and medi-um-sized ones(SMEs),must ensure that they walk on two legs,i.e.,achieve synergistic development of digitization and servitization.In terms of digitization,SMEs should prioritize their investments in the digitization of the delivery process,as they have limited finan-cial resources.This is because digitization of the delivery process can greatly enhance the customer experience,increase customer stickiness and satisfaction,and ultimately help companies achieve performance improvement.In terms of servitization,small and me-dium-sized manufacturing enterprises need to further increase dif-ferentiated premium services while providing reliable basic services to attract more customers.To this end,small and medium-sized manufacturing enterprises can assist customers in quickly trouble-shooting and repairing product problems through a 3D visualization virtual factory management platform.Secondly,while digitization of the delivery process and improvement of basic and premium ser-vices can help SMEs stand out from the competition,focusing on the above three aspects alone is not enough.This is because the lack of digitization in the manufacturing process and the return process can lead to poor performance for SMEs.To this end,small and me-dium-sized manufacturing enterprises must enhance their digital capabilities in the manufacturing process by establishing intelligent factories,focusing on manufacturing,process management,and other individual aspects of information technology systems.This is achieved by building a dynamic and transparent traceability system that covers the entire process.Additionally,these enterprises must improve the digital management of the return process.Thus,small and medium-sized manufacturing enterprises can consider adopting blockchain technology for inspection and confirmation of pending returns or logistics,thereby improving the efficiency of returns,im-proving customer satisfaction,and enhancing customer stickiness.
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