The Impact of Industry 4.0 on Supply Chain Coordination in Engineer-To-Order Companies

Companies operating with an Engineer-to-Order (ETO) fulfilment strategy deliver highly customized products, which makes downstream supply chain coordination critical for their success. Recent studies have shown that Industry 4.0 technologies can facilitate supply chain coordination. However, it is still unclear how they could support downstream coordination in ETO companies. The purpose of this paper is to start to fill in such gap. To do so, we conducted a multiple case study research, encompassing 12 ETO Italian companies from the machinery, shipbuilding, and aerospace industries. By integrating the results of the case studies with the extant literature on supply chain coordination, we classify downstream coordination mechanisms in ETO contexts according to three axes: the typology (standards, schedules and plans, mutual adjustments, and teams), the product life-cycle phase (pre-project, design, manufacturing, and after-sales), and the type of technology adopted (if any). Then, we focus on the coordination mechanisms enabled by Industry 4.0, discussing the critical success factors for their implementation and their impact on supply chain performance. Therefore, from a theoretical perspective, this research builds upon and expands the literature on supply chain coordination mechanisms in ETO contexts by enriching the frameworks from the literature with the after-sales phase as well as discussing how Industry 4.0 technologies can support downstream supply chain coordination. Moreover, insights on the differences among sectors are presented. From a practical perspective, our results may guide managers of ETO companies in the choice of the downstream coordination mechanisms, according to their expected benefits and challenges, as well as in understanding how Industry 4.0 can support them in coordinating with their customers.