The Digital Transformation of the Manufacturing Industry : Metamorphic Changes and Value Creation in the Industrial Network

Abstract: The Industry 4.0 trend poses many challenges for the manufacturing industry and societies generally. The trend presents new challenges and opportunities related to industrial competitiveness and sustainability, as industrial firms adopt digital technologies to change how they interact and exchange data across their industrial network.  The introduction of digital technologies is resulting in a complex technological and organizational structural change process called digital transformation, which sees interfirm interactions, capabilities and identities changed across the industrial network. The digital transformation change process has remained relatively ill-defined, as most industries are yet to show the full potential of successful digital transformation. Firms within the manufacturing industry still have difficulties grasping the impact and costs of Industry 4.0 and of the digital transformation process. The prevailing assumption in the literature is that industries will achieve value creation simply by engaging with digital technologies, either in higher revenues, profitability or both if they are successful. The change process affects all aspects of industrial network, from the single product functionality and production process efficiency to interfirm business interactions, thus affecting in many regards value creation in the industrial network. By employing an Industrial Marketing and Purchasing approach, the dissertation analyzes the issues of interaction, change and value creation in the resource context of two large industrial networks undergoing complex digital transformations. This article dissertation will present four qualitative studies of two large manufacturing industrial network undergoing complex digital transformations with the interaction approach. This dissertation presents several findings and contributions specific to the digital transformation change process, including the presence of metamorphic irreversible and interactive changes challenging the status quo of interactions and value creation in the resource context, creating conflicts, controversies, and friction effects. It also underscores the importance of organizational elements of organizations for the digital transformation, and how a unique combination of changes across the resource context, from new roles to new ways of working allow the industrial network to create value beyond simple technological incremental innovations. The dissertation presents a theory of metamorphic change in the industrial network, to describe complex change processes like the digital transformation.