Formation of Demand-Driven Collaborations between Suppliers in Industry 4.0 Production Networks

Trends for rapidly changing demands across the supply chains of manufacturing companies have resulted in increased collaboration activities involving companies of all sizes, from small to medium-sized enterprises (SMEs) to large OEMs. Industry 4.0 puts forward expectations that these collaborations are formed rapidly to respond to fast changing market needs and small lot sizes. Current information technologies can support such short-term, demand-driven collaborations to utilize excess capacities and quickly respond to existing business opportunities, yet a number of concerns still impede such collaborations. To explore the factors behind the uptake of demand-driven collaborations, we have surveyed a sample of companies from a major European association of aerospace suppliers. Our analysis reveals that competitive pressures, switching costs, information asymmetry, privacy, and path dependencies prevent the uptake of demand-driven collaborations. We use thematic analysis of collected responses to identify existing collaboration barriers throughout the virtual enterprise life-cycle and derive recommendations as to how to address these barriers and support such collaborations. The research findings discussed in this paper can be applied by OEMs developing manufacturing strategies in Industry 4.0 scenarios.