A framework for sustainable management of the platform service supply chain: An empirical study of the logistics sector in China

https://doi.org/10.1016/j.ijpe.2021.108112Get rights and content

Highlights

  • Structural mapping of the platform service supply chain.

  • Triadic interaction nature of the platform service supply chain.

  • Mutual facilitation mechanism between platform and business ecosystem.

  • Strategic alignment of actors, activities, positions, and links.

  • Value co-creation, co-opetition, dynamic configuration for sustainable management.

Abstract

Platforms have become an effective means of innovation in the logistics sector. However, not all platform-based business models become a success. This research investigates how a platform strategy can lead to a sustainable managed platform service supply chain. Based on analysis of data collected within the logistics sectors in China, the research results propose a structural mapping of a platform service supply chain, which differs from the traditional service supply chain structure. This research develops a sustainable management framework for the platform service supply chain, including three key elements: mutual facilitation between platform and business ecosystem; strategic alignment among the structural elements; and a sustainable element including value co-creation, co-opetition and dynamic configuration. The paper also provides a summary of practical implications to guide practitioners in building a successful platform service supply chain and enacting effective management strategies.

Introduction

A platform strategy has been widely implemented in many areas, particularly new product development, and it is believed that a platform approach has radical impacts on the product development process or the entire innovation process (Clark and Fujimoto, 1991; Muffatto, 1999). Lately, the strategy has also been extended into the service design and development areas (Pekkarinen and Ulkuniemi, 2008; Simpson et al., 2006), while its implementation in the logistics sector has been increasing. With the support of rapidly developing Internet technologies and digital transformation, different types of logistics platform have increasingly been created (Cambra-Fierro and Ruiz-Benitez, 2009; Lapadusi and Caruntu, 2011; Rai et al., 2018; Robu et al., 2011; Váncza et al., 2010; Yang et al., 2009).

These logistics platforms have significantly transformed the operations and collaborations of the traditional logistics service supply chain (Geng and He, 2016; Tang, 2014; Wang et al., 2018). One of their expected advantages is the better matching of supply and demand for logistics services like transportation and warehousing (Li et al., 2014). However, more platforms are offering not only logistics services but also complementary services such as banking, accounting, and taxation. This means that more service providers rather than just logistics service providers are involved in the logistics platforms. For one thing, this is in line with the network effects of a platform that attracts more players from both the supply and the demand sides (Boudreau and Jeppesen, 2015; Xiao et al., 2020). For another, with more stakeholders involved, a business ecosystem is formed. This aligns with the argument that a platform strategy always leads to the creation of a business ecosystem (Rong et al., 2013; Rong and Shi, 2014), which is defined as a business community consisting of all stakeholders interacting with each other to achieve a shared common fate (Moore, 1993, 1996). It is believed that one condition of a successful platform strategy is that a healthy business ecosystem has been built (Rong et al., 2018). It has been proven that in the enterprise software sector, joining a business ecosystem helps to improve business performance for both software vendors and platform owners (Ceccagnoli et al., 2012). In the mobile payment area, ecosystems are formed along with platform-based innovative service development activities, which helps to achieve competitive advantages (Junying, 2015; Kendall et al., 2011).

In the current literature on the logistics sector, however, there is a lack of research on the impacts of a platform strategy on the development of a business ecosystem. Much of the literature has focused on logistics platforms, with particular emphasis on service design (Lin and Pekkarinen, 2011; Pekkarinen and Ulkuniemi, 2008), integrating a logistics service with an e-commerce platform (Barenji et al., 2019), or distributed logistics platforms adopting advanced technologies such as blockchain and Internet of Things (Rožman et al., 2019). Those services besides logistics are ignored in the current research. Furthermore, not all the new platform-based business models in the logistics sector have been a sustainable success. Those logistics platforms may also face many issues, such as high external costs and environmental concerns (Rai et al., 2018). Along with the wider application of a platform strategy in the logistics sector, more managerial guidelines are needed for their development and management.

We conducted this research to address those research gaps. In order to differentiate this context from that of the traditional logistics service supply chain and logistics platform, we define it as a platform service supply chain, which is a service supply chain with a platform providing not only logistics services as core offerings but also other complementary services that support the logistics services. This research aims to explore the nature and structure of the platform service supply chain, and to investigate its sustainable management mechanisms by integrating the two concepts of platforms and business ecosystems. Hence, the research question for this paper is:

RQ 1: How can a platform service supply chain be developed and sustainably managed in the logistics sector?

We conducted the research within the logistics sector in China. One of the reasons for this choice was that, from 2014 until the end of 2018, over 1000 platform-based logistics companies had entered the market (Cui, 2020). Meanwhile, the fast growth of platform-based businesses has also been encouraged by the “Internet Plus” strategy proposed by the Chinese government to promote innovation (Fu et al., 2018a). Many logistics companies tend to use technologies like cloud computing and radio-frequency identification to build their logistics service platforms (Sun et al., 2012; Wang et al., 2012), or logistics information sharing platforms (Li et al., 2014). However, many of them have struggled to meet their expectations of success after adopting a platform strategy (CFLP, 2020). This demands urgent research on the above-defined research question and fits our research purposes perfectly.

The research results contribute to the area of service supply chain management and platform strategy by proposing a structural mapping of the platform service supply chain and developing a sustainable management framework. The research also contributes to the area of platform strategies by bringing platforms and ecosystems together and revealing their mutually influencing mechanisms. It also provides practitioners with managerial and practical insights to guide them in building successful platform service supply chains and management strategies.

This paper is organized as follows. The next section reviews the current literature on platform strategy and business ecosystems. After that, the methodology section explains why the case studies were chosen and how they were conducted, particularly the data collection process and data analysis strategy. We then present and discuss the research results. Finally, we present a conclusion, which will cover the research contributions, research limitations, and future research directions.

Section snippets

Platforms for product and service design and development

The concept of a platform originated in the area of product development (Clark and Fujimoto, 1991; Muffatto, 1999). It can be broadly defined as a relatively large set of product components that are physically connected as a stable sub-assembly and are common to different final models (Meyer and Lehnerd, 1997). The implementation of a product platform helps in increasing product variety, reducing complexity, shortening design lead time, reducing cost, and increasing the level of customization (

Methodology

To address these contemporary phenomena and the research gaps, the present research adopted a case study methodology to answer the research question (Yin, 2013).

Findings and discussion

Based on the data analysis, this research derived several findings in relation to the research question. These include the structure of the platform service supply chain, the features of platform services, the facilitation mechanism between the platform and the business ecosystem, the digitalization and competition in the service platform and its ecosystem, and the sustainable management framework of the platform service supply chain. The rest of this section will discuss these findings in

Conclusions

This research has investigated the nature, development, and management of the platform service supply chain. Building on the extant literature and in-depth studies of three cases in the Chinese logistics sector, it has defined the concept and developed both a generic structure of the platform service supply and a sustainable management framework for it. Based on the results of the data analysis and discussion, this section summarizes the theoretical contribution of this research as well as its

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