Digital Transformation in Manufacturing Ecosystems: A Case of Integration Decoupling

Data are becoming a critical asset for building competitive advantage in an increasing number of sectors. But how can traditional, not born-digital firms successfully leverage this new kind of assets? Traditional manufacturing industries have usually been structured around product system integration, with the firms manufacturing core components holding superior knowledge and supply network integration, and thus an overall control over the product system. Yet, “digital transformation” can potentially renew the firms’ roles in knowledge and manufacturing, thus affecting the whole structure of the ecosystem. In this study we focus on the drivers and mechanisms underlying this process. Through a longitudinal qualitative study of Dallara, an Italian motorsport firm that underwent a process of digital transformation, our research uncovers how the firm managed to process and leverage external data to successfully become a key knowledge and a supply network integrator, while surprisingly remaining in a marginal manufacturing role. At the ecosystem level, this corresponded to a decoupling of the digital product integration (i.e., in a virtual, simulated environment) from the physical product integration (i.e., the actual outsourcing and manufacturing), redefining the role of both suppliers and OEMs. We advance a model explaining how digital transformation allows this important decoupling. Implications for theory and practice are discussed.