Development of a unified open e-logistics standards diffusion model for manufacturing supply chain integrations

Abstract

The most respected manufacturing firms are those that have a tightly integrated, collaborative supply network. An important web technology which facilitates the integration of the supply chain is Open E-Logistics Standards (OELS). In OELS, the transmission and manipulation of data are governed by open data and process standards that define their format, structure, and the semantics of data flow between trading partners. Unlike traditional proprietary standards, OELS are developed by an open industrial consortium, use open standardized interfaces, and are built on the internet for communications and transactions among supply chain partners. OELS implementation facilitates electronic integration and information sharing in the supply chain, of which, the importance has been recognized by both manufacturing industries and the government. Despites OELS' importance, there remain concerns about OELS' slow development progress and low adoption rates. The potential failure of OELS represents a significant stumbling block for governments and supply chain practitioners who have envisioned a globalized supply chain network electronically enabled by OELS. This research is motivated by the following questions: What determines the adoption and diffusion of OELS, and how can OELS be successfully implemented in the manufacturing industry? OELS are highly complex in their development, and diffusion processes due to the hybrid and complex forms of network interactions and supply chain relationships. Despite its practical and theoretical significance, acknowledgement of the influence of network structures and inter-organizational relationships on OELS is not evident in the literature, which entails an empirical examination of a unified OELS adoption model incorporating various network and relational factors. Recognizing the significance of investigating network properties and inter-organizational relationships, this study, drawing on various theoretical frameworks including the structural embeddedness theory, the relational view of the firm, and organizational ambidexterity theory, proposes a research model to examine the influences of two categories of network-level properties: exchange structure (content of exchange, i.e., product complexity and specificity, context of exchange, i.e., market turbulences and technological turbulences) and tie architecture (structural strength and relational strength). In addition, this study also investigates two relational mechanisms -bridging (i.e., process adaptability and relationship flexibility) and bonding (i.e., process coupling) as the full forces of OELS adoption. Based on a comprehensive literature review, two versions of questionnaires were designed to collect data from OELS current adopters and potential adopters respectively to investigate OELS actual adoption level and adoption intention. The sampling frame included the list of manufacturing firms belonging to the industry categories within Chinese Industrial Classification (CIC) codes 1311-4290. The findings reveal that the characteristics of exchange structure and tie architecture, the bridging mechanism (relationship flexibility and process adaptability), and the bonding mechanism (process coupling) influence OELS adoption intention and actual adoption level (internal assimilation and external diffusion) differently. Bonding and bridging mechanisms complement each other to facilitate OELS adoption and assimilation. The findings highlight the distinct roles of the network properties and relational mechanisms play in determining adoption intention among potential adopters and actual adoption among current adopters. It also shows that a firm will obtain greater financial and operational performance when it assimilates OELS to a greater extent internally and externally. The key contribution of this study is the development of a robust model to understand the adoption of OELS in manufacturing industries. This study theoretically develops two relational mechanisms pertinent to the context of OELS assimilation and provide the proxies to measure these two mechanisms. By surfacing the complementary effects between bonding mechanism and the two bridging mechanisms on OELS adoption, this study safeguards against the conventional belief that bonding and bridging are substitutes, and demonstrates how these two mechanisms are mutually reinforcing to facilitate the adoption intention and the actual assimilation of OELS. Although OELS is a key technology that provide values to manufacturers to achieve supply chain performance, there is still knowledge gaps with respect to how OELS can help in generating values. This study thus contributes to the inter-organizational systems literature by investigating how network-level properties, specifically, exchange structure and tie architecture, affect the actual OELS adoption level and adoption intention. By comparing different value preferences of potential adopters and existing adopters, this research shows that different diffusion models should be developed to study pre-adoption and post-adoption stages. The findings empirically confirm that OELS enable companies to enjoy durable competitive advantages to pursue higher-order performance by developing bonding and bridging capabilities to continually restructure supply chain processes and respond to external changes.