Ng, Irene C. L., Scharf, Kimberly A., Pogrebna, Ganna and Maull, Roger (2015) Contextual variety, internet-of-things and the choice of tailoring over platform : mass customisation strategy in supply chain management. International Journal of Production Economics, Volume 159 . pp. 76-87. doi:10.1016/j.ijpe.2014.09.007 ISSN 0925-5273.

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Abstract

This paper considers the implications for Supply Chain Management (SCM) from the development of the Internet of Things (IoT) or Internet Connected Objects (ICO). We focus on opportunities and challenges stemming from consumption data that comes from ICO, and on how this data can be mapped onto strategic choices of product variety. We develop a simple analytical framework that illustrates the underlying mechanisms of a product supplier/producer’s choice between (i) producing multiple product varieties as a way of meeting consumer demand (a “tailoring strategy”), and (ii) offering a flexible and standardised platform which enables consumers’ needs to be met by incorporating personal ICO data into various customisable applications (a “platform strategy”). Under a platform strategy, the ICO data is independently produced by other providers and can
be called on in both use and context of use. We derive conditions under which each of the strategies may be profitable for the provider through maximising consumers’ value. Our findings are that the higher the demand for contextual variety, the more profitable the platform strategy becomes, relative to the tailoring strategy. Our study concludes by considering the implications for SCM research and practice with an extension to postponement taxonomies, including those where the customer, and not the supplier, is the completer of the product, and we show that this yields higher profits than the tailoring strategy.

Item Type:	Journal Article
Subjects:	H Social Sciences > HD Industries. Land use. Labor
Divisions:	Faculty of Science, Engineering and Medicine > Engineering > WMG (Formerly the Warwick Manufacturing Group)
Library of Congress Subject Headings (LCSH):	Business logistics, Internet of things
Journal or Publication Title:	International Journal of Production Economics
Publisher:	Elsevier
ISSN:	0925-5273
Official Date:	January 2015
Dates:	Date Event January 2015 Published 30 September 2014 Available 3 September 2014 Accepted 8 October 2013 Submitted
Volume:	Volume 159
Page Range:	pp. 76-87
DOI:	10.1016/j.ijpe.2014.09.007
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Open Access (Creative Commons)
Date of first compliant deposit:	28 December 2015
Date of first compliant Open Access:	28 December 2015
Funder:	Research Councils UK (RCUK), Leverhulme Trust (LT)
Grant number:	EP/K039911/1 (RCUK), EP/K003542/1 (RCUK)

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