Article
Logistical and Technological Differentiation As A Precondition of Supply Networking
Purpose – This paper seeks to understand the significance of the various forms of logistical and
technological differentiation as prerequisites for supply networking by introducing appropriate
conceptual models and illustrative cases.
Design/methodology/approach – By studying the patterns of structural changes in 25 industrial
companies, illustrated in four different positioning matrices, an empirical demonstration of the
differentiation of logistical and technological capabilities is provided and compared with the trends
observed in earlier studies of service industries and supply networks.
Findings – Considering the magnitude of changes of the logistical and technological capabilities
observed in the case studies, differentiation has to be considered a precondition for – as well as a goal of
– networking. More importantly, the conformance of the differentiation patterns of the capabilities and
services that are embedded in the manufacturing supply chains with those of pioneering companies in
service industries such as banking and retailing indicate that moves have been efficiency-enhancing for
both the individual companies and the portfolios of capabilities within the supply networks.
Practical implications – This paper proposes that companies in a supply network should focus first
on developing a division of capabilities and finding the appropriate scale and scope of technological and
organizational specialization through differentiation, and only then on building tighter inter-firm
collaboration by integrating operations and information systems. In that case integrative efforts in
inter-firm relations can produce chain-wide benefits discussed at length in management literature.
Originality/value – This paper contributes to our knowledge on motivations of and obstacles for
supply chain management by looking at the differentiation of capabilities relating to products and
service strategies as well as technological and organizational specialization. In fact, the paper starts
discussion at the junction where previous research has left off by concluding the need for focused
provision of specific elements and mutually complementary competencies and capabilities.
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