Digital Supply Chain of the Future: Applications, Implications, Business Models
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Item Magnetic Strategy of Proprietary Software Vendors: Leveraging Service Market to Compete with Open-Source Software in the AI-Driven Software Arena(2025-01-07) Wang, Zerong; Wei, Xueqi; Qu, ZheIn the digital economy, the role of the service market is increasingly important. It is the services that not only add value to software products but also drive competitive strategies. For example, artificial intelligence (AI), offers a big arena in the relationship of software and services for the competition between proprietary software (PRS) and open-source software (OSS). This study discusses the role of service market in the competition and how proprietary software vendors (PRVs) tailor its quality strategy under the influence of service market. Specifically, we find that PRVs would adopt the “Magnetic Strategy”, that is, when the quality of OSS is below certain threshold, the quality of PRS and OSS “attract” each other; when the quality of OSS exceeds the threshold, the quality of PRS “repel” that of OSS. Furthermore, we also show that a decreasing service development efficiency would motivate PRVs to improve the quality of PRS.Item The Progression of IoT Business Model Types: Implications for Supply Chain Management(2025-01-07) Toorajipour, RezaThe current study investigates the progression of Internet of Things (IoT) business models and their implications for supply chain management (SCM). It reviews the existing literature to gain new insights, and through a systematic process identifies three distinct IoT business model types: connectivity, servitization, and data ecosystems. The study delineates how these models leverage IoT to form new business models and what SCM implications can be realized. The connectivity type focuses on data-driven monitoring and connection between devices, users, and firms; the servitization type shifts focus from product to service offerings to enhance the core offerings and operational flexibility, and the data ecosystem type addresses interconnectedness and collaborative innovation. The findings contribute to the theoretical views on the intersection of business models and SCM, particularly in the context of IoT. It also offers insights for businesses aiming to utilize IoT technologies to transform their business models and improve their SCM.Item Free Shipping Beyond the Platforms: The Case of Extended MFS Programs(2025-01-07) Sun, Geng; Cavusoglu, Huseyin; Raghunathan, SrinivasanOnline retail platforms, which facilitate transactions between consumers and sellers, have transformed the shopping experience across various product categories. Addressing the challenge of the shipping burden associated with online purchases, many platforms have introduced membership-based free shipping (MFS) programs over the last decade, and these programs have been widely embraced by consumers. Recently, some platforms have extended these programs to encompass outside sellers, enabling member consumers to get free shipping even when purchasing from external sources. While this extension offers the potential for additional revenue in the form of ``logistics-as-a-service" (LaaS), it also pits platform sellers against external counterparts, potentially cannibalizing platform sales analogous to a manufacturer experiencing a decline in sales of existing products while extending his product line. The implications of the extended MFS program on the platform, sellers, and consumers remain uncertain. In this paper, we examine the impacts of introducing the extended MFS program using a game-theoretic model. Contrary to common belief, our findings suggest that the extended MFS program can enhance the platform's core business by bolstering its profitability. It may increase the commission revenue and/or reduce the fulfillment costs related to member consumers' purchases on the platform. Moreover, all stakeholders in the platform ecosystem -- the platform, internal and external sellers, and member consumers -- can stand to benefit from the extended MFS program, albeit at non-member consumers' expense. Furthermore, the platform may incur a loss from LaaS itself but still derive overall benefit from the extended MFS program. Our results underscore the nuanced implications of the extended MFS program, challenging the notion of viewing it solely as a LaaS for expanding business and generating additional profit. Instead, it represents a strategic approach with profound ramifications that are distinct from those associated with product line extension.Item Change Detection for Sustainable Redevelopment of AI Identified Brownfields from Satellite Imagery Using Statistical and Clustering Techniques - A Case Study on Supply Chain Location Analysis(2025-01-07) Dürrbeck, Konrad; Gollapalli, Sai Kiran Srivatsav; Reich, Daniel; Sk, Obaidullah; Veres-Homm, Uwe; Fischer, RolandIn the area of Supply Chain Network Design and Location Analysis, it is critical to find an optimal geographic location for production and logistics with a desired area size, usually a large piece of land near the industrial estates or urban settlements, to develop it into a distribution center or a warehouse etc. The reasons may include ease of access to the potential end customers or other business partners for vertical integration of their supply chains. Considering United Nations Sustainable Development Goal 11 and other existing urban planning regulations, it may not always be feasible to locate a suitable greenfield site. One approach to address this problem is by identifying the existing brownfields using high resolution satellite and aerial images. A Machine Learning (ML) based image classification algorithm is being developed which can make a classification on all available land parcels into brownfields or other active sites with the help of these high-resolution images. However, these high-resolution images are expensive and difficult to be frequently collected. An economically affordable alternative are more frequently available low resolution images which can be used to validate the classification with an appropriate change detection method. This paper introduces a detailed method for detecting changes in brownfield sites. The process includes initial classification with DOP21 (high resolution digital orthophoto captured around 2021) imagery, enhancement using SPOT21 and SPOT23 (Satellite pour l’Observation de la Terre) images for low resolution analysis and a series of steps. The experimental outcome shows the effectiveness of the proposed method to distinguish physical changes within the areas of interest, demonstrating substantive applicability in large-scale analysis.Item Supply Chain & Digital Twins - Mature Enough?(2025-01-07) Prockl, Günter; Bouras, Yanis; Jensen, ThomasSupply chain management (SCM) is constantly in search of new ways to improve operations. Actors in supply chains have digitized their operations to a large extent. Theories have already suggested that the concept of digital twins (DTs) has promise as a means to improve SCM, from digitizing operations to sharing updated/real-time digital information about the objects within them. In practice, however, the implementation of DTs is typically limited to those shadowing past events; thus, DTs have not yet provided the proposed opportunities. We claim that the enabling technology for DTs may be mature and available, but the individual partners in the supply chain may not be sufficiently mature to use it. We propose a maturity model to evaluate stakeholders’ DT capability maturity. On a more theoretical level, our study leads to a more generic requestioning of whether SCM is compatible with the use of DTs.Item Bytes & Bodies: Balancing Product Quality, System Efficiency, and Personal Privacy in a Digital Customer Twin-Based Demand Management Approach(2025-01-07) Oehlschläger, Dominik; Glas, Andreas; Eßig, MichaelThis study investigates the trade-offs customers make between product quality, system efficiency, and personal privacy in adopting a digital customer twin-based demand management approach. By using a conjoint analysis methodology, embedded in a laboratory experiment, participants are exposed to a smartphone-based measurement system for apparel sizing. Findings indicate that product quality is the most critical determinant for customer decision-making. Privacy concerns are particularly pronounced among customers preferring traditional shopping methods over digital ones. The study not only provides new insights into customer priorities in digital commerce but also advocates for a shift towards more effectiveness-driven supply chains. Furthermore, a new theoretical framework is proposed that matches customer demands and supply chain characteristics with customer integration through digital twins.Item Introduction to the Minitrack on Digital Supply Chain of the Future: Applications, Implications, Business Models(2025-01-07) Bodendorf, Freimut; Chen, Haozhe; Prockl, Günter; Pflaum, Alexander