The impact of digital manufacturing on business models of craft SMEs
Keywords:
Digital manufacturing, business models, craft SMEs, distributed manufacturing.Abstract
Industry 4.0 in general and Digital Manufacturing (DM) in particular are expected to lead to radical reconfigurations of value chains, threatening to disrupt long-established players in those chains. This study aims to shed a light on a particular aspect of this issue: what value chain reconfigurations – and traditional supplier disruption – can arise as result of the introduction of digital manufacturing in the dental prosthesis industry, and what factors can explain the continued relevance of such suppliers in the reconfigured value chains.
Given that the matter is a very complex one, involving numerous issues that could impede this shift towards a new production paradigm, our research focused on an “ideal case” – the dental prosthesis industry – where circumstances are particularly favorable to such a shift.
The main takeaway is that the transformation is far from straightforward. In particular, we show that DM leads to the emergence of various value chains, with a variable impact on incumbent suppliers’ positions. We also shed light on various factors (investment, the transformation of processes and organizations, profitability issues, resources and capabilities, economies of scale) and their effects on the emergence (or non-emergence) of different value chains and their associated impacts. Typically, the profitability of the internalization of digital manufacturing by downstream actors compared to their usual activities appears to be a structural shortcoming of internalization and thus protects the supplier position. We also find that, contrary to what previous research suggest, economies of scale affect the profitability of digital manufacturing, and thus its impact in terms of supplier disruption.
These findings provide new insights to the literature on digital manufacturing and its impact on value chains and supplier positions. We argue that the factors we identify should be considered more systematically when investigating this issue.
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