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.