Collaboration in Value Constellations for Sustainable Production: The Perspective of Small Technology Solution Providers

Abstract

The rapid ongoing digital transformation creates new opportunities to generate value but also challenges companies in the manufacturing industry to adapt to the recent changes. Moreover, committing to sustainability is essential to maintain competitive advantages, build a more resilient company, and manage increasing societal demands and regulations. Referred to as a “twin transition”, the digital transformation can positively impact firms’ commitments to environmental sustainability. This paper explores challenges that small technology solution providers face on their path toward developing sustainable production solutions for their manufacturing customers. An empirical study was conducted in an industrial cluster of small and medium-sized companies (SMEs) providing innovative, tailor-made production technology solutions to manufacturing companies. As a result, a collaborative process model was suggested for such SMEs to overcome internal and external barriers to obtaining sustainability, thus better supporting the manufacturing companies, i.e., their customers, to strive towards more sustainable production.

1. Introduction

In general, there has been increasing pressure and need for companies in the manufacturing industry to consider sustainability and resilience in their business processes so that they can be competitive and manage increasing societal demands and regulations. Therefore, it can be argued that sustainability is becoming a source of value creation that companies need to invest in and prioritize [1]. Industrial small- and medium-sized enterprises (SMEs) are the driving force of economies in many European countries, and SMEs at large are the backbone of the economy in most countries [1]. However, it has been shown that SMEs contribute to negative environmental impact (64% within the European countries [2]). At the same time, research related to large companies indicates that SMEs may have a lower level of ecological awareness and resources, estimating that their environmental impact is insignificant [3].

Moreover, SMEs, especially within the manufacturing sector, face several critical challenges in managing customer demands. These include shortened time to market, increased customization and product complexity, and a stronger focus on resources optimization, resource circularity, and waste management. [4] These challenges are combined with rapid technological advances and digitalization [5], referring to digital transformation that implies a far-reaching strategic, organizational, and social adaptation to a world where digital technology is recognized as ubiquitous [6,7]. The digital transformation adds one more dimension and affects the conventional business process [8]. Altogether, this challenges SMEs in the manufacturing industry to manage rapid changes in the market, as well as rapid technological changes, increased circularity, and uncertain events in their businesses [9,10]. The “Industry 4.0” (I4.0) and “internet of things” (IoT) technologies need to be managed by the manufacturing companies from a technology and a business perspective, as well as including human and environmental aspects, as highlighted by the “Industry 5.0” concept [11,12]. These technologies have also come more into focus, requiring even faster implementation and management in times of turbulence and unpredictable events such as the COVID-19 pandemic [13,14] or other international crises as seen lately threatening industrial economies. Companies with higher digital maturity generally have higher flexibility and are thus more ready to respond to a crisis [6,14]. Moreover, the notion of “twin transition”, referring to an intertwined, simultaneous green and digital transition to reach a zero carbon and zero waste economy [15], as used by the EU, points in a direction that suggests that digital technologies could have positive impacts on small companies’ sustainability efforts and contribute to improved resilience [1,10,14]. However, the interconnection between digital transition and sustainability is discussed in a relatively small body of literature [1].

Digital technologies support sustainable changes in different parts of manufacturing companies [16]. These changes can improve companies’ sustainability in terms of green industry, zero-waste production, and production efficiency [17]. The challenges of adopting digital technologies, including I4.0, for SMEs in the manufacturing industry can be due to financial and operational limitations [4]. The lack of motivation from customers and collaborative partners, such as suppliers, and the fear of failure when implementing digital technologies including I4.0 for sustainable operations are observed as main challenges for SMEs in general, including the industrial sector [4]. Moreover, the adoption of digital technologies is complicated, with a long-term process to adapt, implement, operate, and optimize [18]. In this context, it is argued (c.f. [19]) that value constellations [20] for the implementation of digital technologies representing a network of technology solution providers (TSPs) and their customers, suppliers, and other partners in the manufacturing supply chain can result in long-term collaboration and co-create value for all actors. This conclusion is supported by Ramezani and Camarinha-Matos [21], who argue that creating inter-organizational collaboration ties might provide a platform for sharing competencies, improving organizations’ agility, sharing risks, and surviving unpredictable events. There is a need to manage different challenges related to digital technologies, sustainability, and production processes for SMEs in the manufacturing industry [4]. Furthermore, the potential changes in business processes due to digitalization [8] and the increased demand for sustainable automated production systems that can manage customized products [22] indicate a need for collaboration between stakeholders. Although prior literature has identified the need for collaboration and managing sustainability challenges, there is still a lack of knowledge of how companies in the manufacturing industry can collaborate in practice to develop sustainable production solutions, especially in this fast-paced situation of the ongoing digital transformation, where it has been observed that the manufacturing industry is among the laggards in terms of digital maturity [6].

In this context, technology solution providers (TSPs) providing tailor-made solutions based on the customer’s needs can play a crucial role in developing technology that improves sustainable solutions for industry [23] to achieve the digital and green twin transition [15]. This paper explores the challenges that such small TSPs face in developing a sustainable solution for production and, more specifically, how small TSPs can collaborate in value constellations in the digital transformation era to enable sustainability. Section 2 of this article provides a brief overview of prior literature on digital transformation and sustainability. Section 3 presents the details of the research method and the empirical study. Section 4 demonstrates the analysis of the data gathered through the literature and the empirical study. Section 5 provides conclusions and suggestions for further research.

2. Theoretical Framework

2.1. Twin Transition: Digital Transition and Sustainability

Sustainability is a crucial evolution path for companies in the modern economy [3]. Recently, there has been increasing pressure on companies to cope with the changing and uncertain conditions in the market [24]. Companies face several sources of market turbulence, e.g., globalization, new rules for environment protection, requesting quality standards, and rapid technological advancement [24]. Therefore, companies need to invest in and prioritize sustainability to create value [1]. Sustainability has been characterized as well-adjusted incorporation of human activities’ social, environmental, and economic performance to benefit current and future generations through a circular economy [25]. Environmental sustainability corresponds to simultaneously seeking human well-being, protecting needed resources, and ensuring that waste from human activities does not expand [26]. Yacob et al. [27] described sustainable green practices as “embrace the use of eco-friendly design, raw materials, packaging, distribution and even re-use/retreatment after the useful life of a product. It describes practices throughout the manufacturing process that are not harmful to the environment” (p. 3). Social sustainability is the ability of a company to ensure that every individual is treated equitably, and economic sustainability ensures continuously generating profit, welfare, and wealth while respecting the environment [28]. Sustainability can also be considered in developing business models that are environmentally and socially sustainable [22,29]. A sustainable business model can help companies beyond the essential reduction of waste, energy, and material consumption but also create financial and social values, mitigate risk, and improve resilience [30].

SMEs, in general, may have internal barriers to environmental sustainability commitments, such as having a lower level of ecological awareness and resources than larger companies and marking their environmental impact as insignificant [3]. Additionally, SMEs rarely refer to sustainability for improving their relationships with their customers or other stakeholders [3]. Neri et al. [31] summarized barriers to adopting sustainability for SMEs in the manufacturing industry into external and internal barriers. The external barriers include regulatory issues (legal requirements, bureaucracy, lack of incentives, and policy distortion), support (lack of external technical support, lack of consultancy), and market issues (customer not ready/lack of demand, uncertainty of future trend, distortion of price). Internal barriers are characterized as organization (lack of time, lack of staff, resistance to change/inertia, attitude/other priorities, communication, workplace and task, organizational system), management behavior (commitment/awareness and expertise), workers behavior (not trained/skilled, awareness, not involved, and incorrect behavior), information (lack of information and trustworthiness of information), innovation, and economics (limited access to capital, hidden costs, risk, investment cost, and pay-back time) [31]. They found that the external barrier regulatory issues and the internal barriers organization and economics are the main barriers in a sample of 26 SMEs in the manufacturing industry in Germany and Italy.

In recent years, significant technological developments have triggered an evolution in the digitalization of society and business [32]. This evolution resulted in an effective digital transformation affecting traditional roles and business models [33]. Vial [7] defined digital transformation as “a process that aims to improve an entity by triggering significant changes to its properties through combinations of information, computing, communication, and connectivity technologies” (p. 121). Digital transformation is not just about using individual technologies to improve operations, but is instead about aiming to transform the business using digital technologies [6]. The ongoing digital transformation can open up new opportunities to develop new digital products and services, digital business processes, or digital business models for organizations [8]. Digital transformation can enhance commitment to sustainability by transforming the conventional business with improved transparency, flexibility, agility, and customer relationships, reducing cost and energy consumption and improving overall efficiency and productivity [3,34,35]. However, such a twin transition [15,36] towards using digital technologies and, at the same time, committing the whole organization to sustainability can create new challenges for SMEs [3]. Kumar et al. [4] identified 15 challenges affecting the adoption of digital technologies and I4.0 in SMEs for sustainable value creation. The challenges of adopting I4.0 technologies for sustainability are summarized as (1) awareness about I4.0 contributions to sustainable production, (2) lack of management support, (3) high initial cost of technology adoption, (4) lack of funds for investment, (5) low awareness about government policies for I4.0 and sustainability, (6) low dedicated resources for research & development, (7) required long term planning on the adoption of I4.0 technologies for ethical and sustainable operations, (8) motivations from customers, (9) IT-based infrastructure, (10) trained workforce for sustainable production I4.0 technologies, (11) required collaboration among supply chain partners, (12) fear of job loss or decrease of the workforce, (13) fear of I4.0 technological failure, (14) lack of alternative solutions in case of technological breakdown, and (15) fear of uncertainty in demand because of market disruptions [4]. The rather technology-focused Industry 4.0 is currently being taken further to the ambitious concept of Industry 5.0 [11,12], focusing more on societal and ecological aspects, increasing the pressure on the manufacturing industry to invest in sustainable and resilient development with an even broader perspective, taking even more aspects into account.

Kumar et al. [4] mentioned the lack of coordination and collaboration among supply chain partners as a challenge. However, although collaboration can be challenging, it can help SMEs overcome some challenges of adopting digital technologies. According to Kane et al. [6], collaboration is a part of the digital transformation culture in digitally mature companies. We further discuss the importance of collaboration in the following section.

2.2. Collaboration for Sustainability

Collaboration can correspond to a durable and profound relationship between separated groups or organizations to achieve a mutual purpose [37]. Patel et al. [38] defined collaboration as follows: “Collaboration involves two or more people engaged in an interaction with each other, within a single episode or series of episodes, working towards a common goal” (p.1). In another definition by Hartono & Holsapple [39], collaboration among business partners is “an interactive, constructive, and knowledge-based process, involving multiple autonomous and voluntary participants employing complementary skills and assets, with a collective objective of achieving an outcome beyond what the participants’ capacity and willingness would allow them to individually accomplish” (p. 20).

Establishing collaborative relationships with other companies can help SMEs strengthen their market position or exploit new opportunities [40]. “Collaborative” refers to a set of processes planned to create harmony among parties who may disagree about the issue [37]. Collaboration enables companies to access the resources and capacities of their collaborative partners that they may lack in-house [41]. Furthermore, companies can benefit from inter-organizational collaboration to reinforce skills, mitigate resource challenges, share knowledge, foster innovation, and explore new business channels or exploit existing channels [42]. Two primary outcomes for inter-organizational collaboration discussed in the literature are mainly innovation and performance [43], where innovation outcomes differ in product, process, service, marketing, and organizational innovation. Performance outcomes include survival, competitive advantages, sales growth, and profitability [43].

Sustainability is not discussed directly in the summarized outcome of the collaboration by Zahoor and Al-Tabbaa [43]. In fact, in previous literature, collaboration for sustainability and the circular economy has been a somewhat neglected field [44]. Nevertheless, environmental and social sustainability can be viewed from innovation and performance outcomes perspectives. Green product and process innovation are two main topics in literature considering sustainability as an innovation outcome. Green product innovation aims to mitigate environmental impacts in a product’s life cycle and satisfy customer needs by creating new products or improving existing products [45]. Furthermore, green product innovation includes using nontoxic and biodegradable materials in product design, improving the durability and recyclability of products, and modifying product design to reduce energy consumption during usage [45]. Green process innovation aims to reduce energy and resource consumption and use pollution-control equipment, recycled material, and environmentally friendly technologies [45]. Collaborative circular-oriented innovation is an emerging area of research in sustainable-oriented innovation that requires a high level of collaboration among collaborative partners [44,46]. The need for collaboration can increase when a company’s strategy toward sustainability transfers from a product focus and operational optimization to organizational transformation and system building for positive social changes [46].

Brown et al. [44] defined the collaborative process as “the purposeful decisions and actions within and between organizations and the collaborative network of organizations engaged in this process” (p. 2). According to Brown et al. [44], it has the following phases:

• Identify the need and articulate the intent to collaborate

• Identify and select partners

• Align partners on a shared purpose

• Develop structural and procedural governance

• Define a collaborative value capture mode

In comparison, Reilly [37] defined similar phases of identification path, formation, implementation, engagement or maintenance, resolution, and evolution for a collaborative path. We defined the phases of a collaborative process based on the discussed phases in Reilly’s [37] and Brown et al. [44] research as follows:

• Identify the need for collaboration

• Identify and select partners

• Set up a collaborative strategy development and collaborative actions

• Define collaboration resolution and collaboration evolution

The above-mentioned collaborative process descriptions do not explicitly address sustainability. However, sustainability aspects can be regarded from a broad perspective and on all levels of the collaborative process. Sustainability can be seen as a critical value that can be achieved by collaboration in a value constellation. Moreover, a collaborative process among different actors of the value constellation can be perceived from a sustainability and resilience perspective [24]. Notably, the partner selection can be a delicate issue, and specifically which criteria to use. This has been widely discussed in the literature, mainly with regards to collaboration type, e.g., joint venture or strategic alliance (c.f. e.g., [47,48,49,50]). Strategic supplier selection for sustainability and resilience has come into focus with new light due to the pandemic affecting global supply chains, as studied by e.g., Badulescu et al. [51]. Different supplier selection criteria might apply as political conflicts or other unpredicted events appear, that change the world market situation, highlighting the need for prioritization of sustainability and resilience.

2.3. A Value Constellation to Implement Digital Technologies

In manufacturing industries, the competition has shifted over the past decades from reducing costs to creating high-added-value, i.e., high customization, new business models and human capital, service dimension, and creating sustainable value [52]. Manufacturing industries can have intrinsic and extrinsic motivations to use digital technologies in their production process to create values [53,54]. Digital technologies, often under the label I4.0, include, e.g., additive manufacturing, robotics and automation, big data, augmented reality, simulation, digital twins, IoT, cybersecurity, and cloud computing [54]. From a value chain perspective, using digital technologies impacts the whole manufacturing supply chain, including the process of organizing design, production, sale, and delivery to the customer [32]. The adoption of digital technologies can create the following values for the supply chain of manufacturing industries [55]:

• Improving financial performance,

• Increasing resource efficiency,

• Identification and traceability of raw materials,

• Individualized or simulation-based technology products,

• Improving overall equipment performance,

• Increasing production flexibility, and

• Creating new business models for interaction between customer and producer.

Many actors play a role in implementing digital technologies in the manufacturing industries’ supply chain, including TSPs delivering customer-oriented products and services based on digital technologies. TSPs are companies developing solutions to facilitate the implementation of digital technologies in various industries. The TSP and their collaborating companies can form a value constellation to co-create values by using digital technologies with the manufacturing supply chain [55]. The value constellation [20] represents a network of companies focusing on collaborating and receiving support from other companies or related individuals to co-create values and improve the competitive advantages of each other. Co-created value results from interactions among entities in a complex business system—a constellation—connecting knowledge and redesigning relationships [20]. The proposed value involves technical, social, economic, and emotional resources that cannot be deployed individually [56]. The illustration of the possible value constellation and created values presented in [55] are shown in Figure 1.

2.4. Sustainable Production through Digital Transformation

Sustainable production for a manufacturing industry corresponds to adopting strategies, actions, and activities that meet the current needs and necessities of the company while protecting, sustaining, and enhancing resources that will be needed in the future [57]. The sustainable production output aims to use non-polluting, energy-efficient, economically viable, safe, and healthful processes and production systems for employees, communities, and consumers [57,58]. Sustainability goals can range from energy efficiencies and resilience to considering new forms of value related to products such as recycling and remanufacturing and product development in a resource-constrained world using a significantly lower amount of material and energy [59].

Sustainable practices should extend to all phases of a product’s life cycle and to all stakeholders in the production value chain to achieve sustainability goals [28]. To achieve these goals, the manufacturing companies may need to change production and consumption profiles, economic structure, production technologies, institutions, and organizational arrangements [60]. Incremental improvements to existing technologies may not achieve these changes and often cannot happen without all stakeholders’ conscious, united, and focused efforts to strategically and systematically tackle the issue [60]. A value constellation perspective on sustainability practices can consider the required collaboration among stakeholders to co-create some extent of sustainability goals and perform required changes together.

3. Research Methodology and the Empirical Study

Methodologically, this research is exploratory and empirically based on case studies. Empirical data for this article was gathered and archived in a structured way by case study methodology [61,62]. The case companies are 15 small companies operating in an industrial cluster where member companies provide automation solutions. The information about the number of employees, turnover (million euros), core competencies, products and customers, and collaboration with other SMEs at the cluster were analyzed. A summary of the focal company information is presented in Table 1.

The studied TSP companies (A-M), in the Southern part of Sweden, have customers in different manufacturing industries, such as different materials, e.g., polymer, wood, or different sectors, e.g., automotive or medical technology, and are often partnered with one (exclusive) or several robot suppliers. The manufacturing companies (N, O), in the same geographical region, are also members of the cluster and use advanced automation solutions in their production.

3.1. Data Collection

The interviews for primary data collection were prepared beforehand by studying two different secondary data resources: (1) information about the company’s financial data (e.g., turnover, profit, KPIs) collected from the Retriever Business™ database and (2) the website of the company, often containing movie clips of the studied TSP’s installed solutions and its offering to its customers. The website for several studied case companies could serve as a virtual study visit to become familiarized with the company before an interview. The interviews were conducted between fall 2020 and spring 2021. The interviews were held online via the Zoom application with experts at companies knowledgeable about the company’s processes and management; in most cases, this was the managing director and, in a few cases, the person responsible for technology sales with customer contact and market responsibilities. The interview sessions started with an introduction of the participants explaining the aim of the interview. Each interview lasted approximately 30 to 40 min and was recorded with the participant’s permission. Three guiding questions were asked about their key collaborative partners, explaining their core competencies and two key challenges they face in developing automation solutions. Interviews were conducted in Swedish, and the main author transcribed the data collected first into Swedish and then translated the data into English. Two of the co-authors conducted the interviews and reviewed the translation.

Additional data were collected during two workshops with participants from 29 different companies: the TSPs and manufacturing companies representing their customer category. These workshops had the purpose of collecting data regarding the use of digital technologies and innovative practices in the focal companies (the TSPs) and their manufacturing customers. Each workshop was around three hours long, and data was gathered through polls, discussion, and open questions.

3.2. Data Analysis: Thematic Analysis

The data collected through the individual interviews were analyzed through thematic analysis. The thematic analysis technique is a common qualitative data analysis approach used to analyze interview studies [63]. The thematic analysis offers a structured process of identifying themes emerging from data through six phases ([63]). These phases are explained in the following.

• Phase 1, becoming familiar with the data: The authors read and discussed the transcribed interviews several times to become familiar with the data set.

• Phase 2, generating initial codes: The initial codes were developed after reading the collected data in an excel file. The excel file was used to summarize the collected data in a structured way. Initial codes were created based on the main categories of collaborative partners (strategic suppliers, customers, strategic partners, and service providers), core competencies, and challenges.

• Phase 3, searching for themes: In the next step, initial themes were identified by combining relevant codes.

• Phase 4, reviewing themes: The initial themes were reviewed to find the possibilities of merging themes into one or dividing one theme into subthemes.

• Phase 5, defining and naming themes, and phase 6, producing the report: The identified themes were defined in a structured way. The analysis results are presented in empirical findings, linking the quotes from interviews to defined codes and relevant themes.

• Phase 6, producing a report that relates back to the research questions.

In the following section, the empirical findings are presented as a result of an analysis applying the six phases.

3.3. Empirical Findings

Based on the transcription of the collected data from the semi-structured interviews with respondents from the 15 companies representing both automation solution providers and manufacturing SMEs selling advanced manufacturing as a service, the data set was organized and analyzed thematically. The three main thematic areas that were identified during the analysis of the collected data were (1) core competencies, (2) challenges, and (3) business collaboration models.

First, the thematic analysis related to core competencies is presented in Table 2.

We categorized TSPs’ core competencies based on four main themes: technical capabilities, flexible solution development process, collaboration, and sale performance. The technical capabilities were the main discussed core competency from the TSPs perspective. TSPs have a variety of in-house technical capabilities in designing products, hardware, and software development. They can also outsource the hardware and software development to their collaborative partners. TSPs can play the role of a system integrator to provide a whole solution to their customers.

In Table 3, the thematic analysis related to challenges for TSPs is summarized based on the 15 semi-structured company interviews. According to the interviews, finding a competent workforce to develop automation solutions is a primary challenge for TSPs. Moreover, managing large projects with large customers or having various projects in parallel is challenging for TSPs due to many adjustments being required to develop a tailor-made automation solution.

In Table 4, the thematic analysis related to the type of collaboration is presented. Collaboration motivations are mainly regarded as sharing knowledge and resources among TSPs and their collaborative partners. Moreover, offering a complete solution is an essential motivation for TSPs to create value for their customers.

In Table 5, the perspective of TSPs on sustainability and the important aspects for them are summarized. We found diverse themes, including sustainable partner selection, economy, and sustainable business model, regarding environmental sustainability to reduce pollution, waste management and recycling, and energy consumption.

4. Analysis

4.1. TSPs’ Challenges and Internal Barriers toward Digital Transformation and Sustainability

As Kumar et al. [4] mentioned, some of the challenges surrounding adopting I4.0 technologies for sustainability might be related to a lack of collaboration and coordination in the supply chain. Moreover, the SMEs in the manufacturing industry may not have dedicated resources for research and development. Based on the empirical findings, we argue that although collaboration can be challenging, collaboration with TSPs can help the SMEs in the manufacturing industry to overcome some challenges of adopting digital technologies. However, even TSPs face challenges regarding adopting digital technologies (see Table 6). Still, their core business, which is to develop automated solutions for manufacturing companies, contributes to the customers’ needs and transition towards a more digitalized manufacturing system. In the empirical findings, it was shown that TSPs have broad and deep skills in hardware and software technologies as well as high experience in project management, with the ability to integrate customer needs with the supply chain and the development of automated production system solutions. The findings indicate that TSPs can be a key partner in a value constellation when providing critical competencies for the manufacturing company. Moreover, based on the interviews, finding competent people to employ, managing large projects, or having multiple projects in parallel is challenging for TSPs. Therefore, TSPs can benefit from identifying and collaborating with different partners to share resources and knowledge to mitigate human resource management problems.

As Neri et al. [31] classified, industrial SMEs may hardly consider sustainability for improving their relationships with their customers or other stakeholders. The internal barriers of TSPs, based on their [31] classification, can be summarized in three aspects of the organization, management and workforce behavior, and innovation and economics. Based on the empirical findings, TSPs have an ambition toward sustainability, but we did not observe an organizational system to support the desire for contributing to sustainable production in SMEs in the manufacturing industry. One organizational reason can be limited staff and lower priorities for managers due to lack of demand from customers. We found few actions toward a more sustainable workplace at the TSPs, such as installing solar cells on the company’s roof and recycling waste. We mostly interviewed the managers and observed sustainability awareness among them in their management behavior. Regarding the innovation and economic barriers, TSPs have high staff costs, and they are also under pressure for the final product price, usually the developed automation solution. Therefore, the economics of commitment to sustainability is essential for them. For example, one of the respondents mentioned that a supplier who can offer a sustainable solution that does not add much extra cost could be prefered for supplier selection. In addition, we observed that the market could play an important part in TSPs’ commitment to sustainability for external barriers. Currently, the ambition for sustainability can be observed in large customers on the stock exchange, but it is not an explicit demand from their customers yet. Their customers are mostly interested in the financial perspective in terms of sustainability. The summary of internal and external barriers related to practice sustainability by a TSP is presented in Table 7.

In summary, we found in the empirical study that TSPs had not expressed that sustainability has a high priority in their project management process during the interviews. They face challenges in terms of a lack of staff, economic aspects of sustainable business, and low demands for sustainability from their customers. However, even with low demand from customers, TSPs try to provide energy-efficient solutions for their customers. Therefore, there is a potential to increase their commitment to sustainability by motivating a higher demand from customers in the value constellation. As shown in Figure 2, the demand for sustainable production solutions, shown with a dotted line, is lacking in manufacturing industries. Therefore, TSPs implicitly provide sustainable solutions that will not cost extra for their customers.

The value constellation perspective considers the required collaboration among a network of companies to co-create values. Sustainability can be considered as an essential co-created value from interactions among a constellation of TSPs and technology consumers, i.e., companies in the manufacturing industry. A value constellation for sustainability can help TSPs and manufacturing industries improve beyond the essential reduction of waste, energy, and material consumption, creating financial and social values, mitigating risk, and improving resilience.

4.2. A Conceptual Collaborative Process for Sustainable Tailor-Made Solution Development

Collaboration in the proposed value constellation can solve some challenges that TSPs and manufacturing companies are facing in resource limitation, financial motivation, and lack of demand. However, how the TSPs and manufacturing companies can successfully collaborate to achieve sustainability needs to be discussed. Therefore, we developed a conceptual collaborative process model for sustainable tailor-made solution development based on the empirical findings and reviewed literature, shown in Figure 3.

In the first step, the need for collaboration for sustainability should be identified by TSPs. The proposed model highlights the need for social, environmental, and economic sustainability along with collaboration performance and innovation outcomes. As Brown et al. [44] discussed, the motivation and cultural elements are as important as technical capabilities in collaboration for sustainability.

In the next step, the collaborative partners can be selected in accordance with the collaboration strategy. Collaboration strategy is defined based on the attributes discussed for the collaborative approach and collaboration arrangement in [19]. The collaboration approach can be explorative (exploring new collaborative relations) or exploitative (improving the current collaboration) [19]. The partner selection step focuses on finding new collaborative partners based on the collaboration strategy in an explorative strategy. Hence, in an exploitative strategy, the emphasis is on strengthening the relationship with the current partners.

Moreover, in the literature, partner selection criteria have been mostly discussed regarding collaboration type, e.g., joint venture or strategic alliance [47,48,49,50]. Therefore, in the proposed model, we considered the partner selection step connected with the collaborative type, i.e., strategic alliances, joint ventures, licensing, outsourcing, and a collective research organization. In addition, we further extended the partner selection step in the collaborative process presented in [44] to consider all three pillars of economic, environmental, and social sustainability compared to conventional partner selection that mainly focuses on economic aspects discussed in detail in [51].

After developing the sustainable collaboration strategy, collaborative actions can be practiced to create values, as discussed in [19]. The created values can include a wide range of associational and transferred resources, interaction, and synergetic values. Based on the empirical findings, synergetic values of combining knowledge and specialized skills from different segments, sharing knowledge, and sharing resources are essential in collaborative actions.

The proposed model also extended the collaborative process presented in Brown et al. [44] by considering two critical steps of collaboration resolution and evolution steps inspired by Reilly [37]. The collaboration resolution step aims to solve possible conflicts and improve collaborative relationships between partners. We argue that collaboration resolution is critical in assuring the success of the collaborative process for sustainability. In the collaboration evolution step, the collaboration strategy can evolve based on joint goals achievements to improve the process continuously.

4.3. Collaborative Process Model as a Means to Facilitate TSPs’ Challenges

By the suggested collaborative process model (Figure 3), sustainable production solutions can be developed in value constellations, combining skills and resources from different TSPs and their suppliers concerning the themes in Table 2, Table 3, Table 4 and Table 5. We highlight the importance of collaboration in managing the discussed challenges for TSPs in Table 2, Table 3, Table 4 and Table 5 (Technical capabilities, Challenges, Business collaboration and Sustainability) either inhouse, within their organization, or through a strategic value constellation collaboration:

• Technical capabilities

  • ဝ. Inhouse: TSPs have high skills in designing hardware, automation programming, mechanical design, problem identification about what to automate, and skills to support the manufacturing customer in how the product can be redesigned for a more efficient assembly.

  • ဝ. Value constellation: Through strategic collaboration, technical capabilities can be in-sourced, i.e., from suppliers skilled in tool design and software. Moreover, if several TSPs collaborate on a joint project, an external project manager can act as a collaborative communication resource to the manufacturing customer. Furthermore, by strategic collaboration in a value constellation, understanding customer needs, integration of new technologies, and interaction with learning organizations such as universities, the TSPs are on the competitive edge for developing sustainable production solutions.

• Challenges for TSPs

  • ဝ. Inhouse: TSPs manage to develop tailor-made solutions that satisfy the manufacturing customers’ needs, but it can be challenging to reach proper profitability, especially when the production solutions are so dependent on supplying companies’ deliverables.

  • ဝ. Value constellation: Resource management is a challenge since the business developing sustainable production solutions demands highly skilled employees. Here, a strategic collaboration through a value constellation can be the key to successful competitiveness for TSPs. However, this demands a collaboration built on trust, a long-term collaboration with the educational organizations on all levels, and a work environment that attracts the right skills.

• Business collaboration

  • ဝ. Inhouse: As a TSP, it is possible to add value to the manufacturing customers by adapting or upgrading existing machines to future needs and being flexible in managing customer needs. Furthermore, a TSP can offer service and maintenance to its customers.

  • ဝ. Value constellation: Through a strategic collaboration, a TSP can motivate collaboration to reach synergic values through a combination of knowledge and specific skills, sharing knowledge between stakeholders and sharing resources collaboratively.

• Sustainability

  • ဝ. Inhouse: The awareness about sustainability and the ability to offer sustainable production solutions are in place, but the challenge is related to the willingness to pay for sustainable production solutions from the manufacturing customers explicitly. Still, the manufacturing customers are mostly interested in the financial perspective. Meanwhile, the TSPs themselves implement different sustainable solutions within their organizations.

  • ဝ. Value constellation: By implementing a strategic collaboration between different stakeholders, e.g., industrial companies, the public sector, standardization institutes etc., TSPs can ramp up the capabilities in offering sustainable production solutions according to the transition in society, and here the ongoing digital transition can be crucial for the manufacturing customers to manage. Through strategic collaboration in a value constellation, it can be possible to facilitate a faster transition towards a willingness to pay for sustainable production solutions in the future.

However, as summarized in Table 7, there are still barriers to managing sustainability for TSPs, especially related to customer demands, needs, and willingness to pay for sustainable solutions. Linking this to the ongoing “twin transition” [15], which focuses on a simultaneous digital and green transition combination, the TSPs can support the twin transition by combining their inhouse resources with a strategic collaboration in a value constellation. However, there is still a need for customer acceptance and willingness to make the investments.

5. Conclusions and Future Research

This paper explored challenges that technology solution providers (TSPs) face while developing sustainable production solutions for manufacturing customers during the ongoing digital transformation. Collaboration in value constellations has been explored as a potential way to manage the identified challenges that the TSPs face.

The findings of this study shed light on value constellations to implement sustainable production solutions between TSPs as suppliers and manufacturing companies as customers. In the setting of a digital transformation, both technology solution providers, i.e., TSPs, and technology solution consumers, i.e., manufacturing companies (buying industrial services from the TSPs), together can contribute to the development of sustainable production solutions. However, our results show that sustainability requirements from the customers are often vague or not explicitly paid for. Nonetheless, the TSPs have been shown to possess the capabilities to contribute to sustainable solutions supported by digitalization utilization, such as developing automated solutions interacting with the manufacturing companies’ information infrastructure.

This paper suggests a collaborative process model (Figure 3), highlighting that collaboration can facilitate TSPs in their efforts and needs to share resources and build long-term relationships with different stakeholders. The model aims to support TSPs in strategically identifying partnerships for collaborative projects. By utilizing the model, challenges that TSPs face related to the ongoing digital transformation in society might be managed as they participate in the development of sustainable production solutions. Furthermore, identifying collaborative partners in a value constellation can help TSPs provide efficient project management in large multi-organizational projects, including implementation, operation, and optimization of a production solution at the customer site by utilizing the ongoing digital transformation. This trend of more complex, integrated and digitalized production solutions demands a competent workforce managing the emerging technologies, which could be identified for collaboration strategically through a value constellation.

The results from our studies, showing that manufacturing customers still prioritize financial parameters over sustainability aspects, while investing in production solutions, correspond with Brown et al. [44], who indicated that collaboration for sustainability and circular economy had been a neglected field. Therefore, we further elaborated the collaborative process presented in [44] by considering two critical collaboration steps in the suggested collaboration model (see Figure 3): resolution, with the ambition to improve relationships between stakeholders, and evolution, with the aim of developing a collaborative strategy for reaching joint goals. Furthermore, the suggested collaborative process model included how sustainability perspectives can be addressed during the collaboration.

In this study, we empirically explored the challenges of the technological transition of industries towards a greater focus on sustainability from the perspective of TSPs. The perspective of technology consumers, i.e., manufacturing industries, can also be investigated empirically in future research. This study proposes a conceptual model of a collaborative process as an attempt to offer a practical solution toward sustainability in value constellations. Further research is needed to highlight the advantages and risks of collaboration in providing a tailor-made technological solution for sustainable production. The proposed collaborative process is not presented as definitive; instead, it presents a foundation for further empirical research to implement the process in future studies. Future research can test the effectiveness of the process or its relevance to other types of SMEs.

Author Contributions

Conceptualization, H.R., K.J., L.L. and A.Ö.R.; methodology, H.R., K.J., L.L. and A.Ö.R.; writing—original draft preparation, H.R.; writing—review and editing, H.R., K.J., L.L. and A.Ö.R.; visualization, H.R. and K.J. All authors have read and agreed to the published version of the manuscript.

Funding

Authors acknowledge the cluster establishment funding by the European Regional Development Fund and cluster partners. Furthermore, the authors acknowledge the SPARK research environment at Jönköping University, funded by the Knowledge Foundation in Sweden, and the Swedish national program Produktion2030, funded by Vinnova, Sweden’s Innovation Agency and the Swedish Energy Agency, for partly financing this research.

Institutional Review Board Statement

Not applicable.

Data Availability Statement

Not applicable.

Acknowledgments

The authors would like to thank the cluster and the participating companies for their engagement in workshops, interviews, and company visits. The authors would also like to acknowledge the anonymous reviewers that helped us improve the paper substantially.

Conflicts of Interest

The authors declare no conflict of interest.

Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Figures and Tables

Figure 1. Value constellation for implementation of digital technologies adopted from [55].

Figure 2. Illustration of demand flow from manufacturing companies and sustainable production solution development by TSPs. Dotted arrows indicate the lacking demand from manufacturing companies and consequently lack of providing an explicit sustainable solution from TSPs an an extra cost.

Figure 3. Suggested collaborative process model for developing sustainable production solutions, further developed from Rahmana et al. [19] (p.4) with inspiration from Brown et al. [44] (p. 12).

Table 1

Information on the case study companies collected through interviews (i), workshops (w), and the Retriever Business ™ database for financial data, fiscal year 2019 (1 Euro appr 10 SEK).

Company A–M	Number of Employees	Turnover (Million €)	Type of Data Collection	Products and Customers
A	10	2	iw	Design and manufacture special machines or robot cells and vision of inspection systems.
B	14	1.6	iw	Manufacture and assemble tools and production cells. Developed special machines and offered automation solutions.
C	126	20.7	iw	Design and supply robotic solutions. Provide maintenance, automation, and machine service.
D	13	6.4	i	Supply automatic data capture technologies and factory automation for manufacturing, retail, transportation, and healthcare.
E	65	34.6	i	Supply tools, protection and equipment for the construction and industrial sector. Delivering machinery and automation solutions Providing service and maintenance.
F	11	2.1	iw	Design, supply, and provide services for process automation and robotics.
G	8	2.8	iw	Design and provide services for end-to-end robot solutions.
H	49	27.4	i	Design, develop, and manufacturing automation equipment.
I	5	1.6	iw	Design and supply tailor-made automation solutions.
J	3	1.3	iw	Design and produce smart feeding, welding and insertion press systems.
K	23	4.0	iw	Design, supply, and provide automation equipment services and build new machinery process facilities.
L	19	3.6	iw	Design and manufacture press tools, solutions for industrial automation and special machines.
M	56	9.7	iw	Design and supply automation equipment.
N	42	9.7	iw	Design and production of parts for automotive, defense, MedTech, and marine industries.
O	50	10.1	i	Producing plastic products for B2B.

Table 2

Thematic analysis of the core competencies.

Quotes	Codes		Themes
“We have high competence in electrical design, assembly and PLC programming.”	Design	Inhouse	Technical capabilities
“We are responsible for the actual programming and mechanical design.”
“We can help customers design these products and then assemble them.”
“We work with automation solutions in the form of smart production lines and in combination with industrial robots.”	Hardware development
“We build the designed machine from the smallest screw to finished product.”
“We have two legs in the business, partly that we act as toolmakers blackmail and development tools in various forms and the other leg is just automation and Special machine.”
“We are the manufacturer of special manufacturing machines.”
“We have an automation control system, automation programming and engineering knowledge.”	Software development
“We outsource almost all manufacturing of components.”	Hardware development	Outsourced to collaborative partners
“The competence is mechanics, so movements and if we continue to collaborate with our toolmakers, we have very good precision. The idea is also to build machine automation solutions with the same basic philosophy. We have an incredibly broad knowledge of different technologies and many different things precisely.”
“We work with big companies to provide high technical software.”	Software development
“We are responsible for the actual programming and mechanical design.”
“We are actually a complete provider of mechatronics solutions.”	System integrating		Project management
“We have expert project managers such as mechanics, designers or programmers, electricity and automation to provide the whole solution.”
“Our organization is customer-oriented and flexible in delivering intelligent machines that are simple to handle.”	Customer-oriented organization
“We are competing in a market where there are many who manufacture equipment for making pallets, but they are not so user-friendly, not as automated as we work with robots.”
“We can do a lot of rebuilds on the machines and in that way maybe buy a standard product, but then adapt it to the customers and the customers’ needs.”
“We have a stable position in the market. We are the leading player in technical solutions and customers in Scandinavia in large part of the automotive industry.”	Strong market position
“We have a good collaboration with toolmakers, customers and companies who write a program with us.”	Collaborative partners		Collaboration
“We want to deepen our collaboration with universities to research the future of production systems more.”

Table 3

Thematic analysis of the challenges.

Quotes	Codes	Themes
“The difficulty is to automate so many adjustments and many projects that do not get off because there are too many components. We have to re-configure the machine in a year and a half or two years.”	High level of adjustments	Tailor-made solution development
“We struggle the most on the profitability of the tailor-made solution development.”	Profitability
“Another challenge is also the price pressure. We have staff costs in Sweden that are too expensive.”
“In the project, if one of our suppliers drops out, the project will be greatly delayed.”	High reliance on suppliers
“Well skilled workforces are difficult to find due to lack of knowing the Swedish language.”	Workforce skill	Resource management
“Finding a competent person is a challenge, and we are trying to collaborate with schools to overcome that.”
“Finding automation engineers are a huge challenge.”
“The biggest challenge is to both retain and be able to add staff with the right skills.”
“To attract young people and attract the right young people.”
“Working with a big project and large company is difficult due to less profitability.”	Project management

Table 4

Thematic analysis of the business collaboration models.

Quotes	Codes	Themes
“We create value by adapting the machine and then adding our partners, tools, and further service and maintenance to ensure we have a complete solution.”	Offering a complete solution	Motivations for collaboration
“The basic idea is that we can keep our three automation companies and have variously knowledgeable and specialized skills in three pointed segments.”	Synergetic values of combining knowledge and specialized skills
“We work quite a lot with partners who may have knowledge in our field.”	Sharing knowledge
“We are three companies that we cooperate with together. When we need real key competence or someone who is very good at something, then we can borrow between the companies.”	Sharing resources

Table 5

Thematic analysis of TSPs’ perspective on sustainability.

Quotes	Codes	Themes
“I think that if you can choose between a supplier who can offer a sustainable solution and it does not cost much extra, it is preferable.”	Sustainable partner selection	Sustainability
“We internally talk about economic and social sustainability, but they are not easy to implement. We cannot easily purchase them”.	Economy
“In terms of sustainability, customers are most interested in the financial perspective. As little waste as possible is part of this, and then an efficient production facility is a key to an actual and standardized routine.”
“Sustainability usually comes down to consumption. Consumption of more electricity, water, hydraulics, and cooling.”	Energy consumption
“We build energy-efficient, automation solutions. For example, we try to avoid compressed air, which is quite expensive energy. It is an expensive energy source that uses a lot of energy to produce compressed air.”
“We plan to install solar cells on the entire roof of our company.”
“We are looking at a new carpool that the whole company is going through.”	Pollution
“For green sustainability, we re-use 98 percent of the left-over materials and recycle the waste.”	Recycle
“Despite a customer that works with the sustainability issue, it is incredibly low on the agenda. In principle, we never have any demands from customers on that topic.”	Customer demand
“The ambition for sustainability is probably there, especially with the large customers who are on the stock exchange.”
We highlight some environmental aspects on our website, but we believe that we need to have a sustainable business model.”	Sustainable business model

Table 6

Challenges of developing and implementing digital technologies from empirical findings.

TSPs’ Challenges
Challenges of developing and implementing digital technologies for TSPs	High level of adjustments to provide a tailor-made production solution
	The complicated long-term process to adapt, implement, operate, and optimize digital technologies
	Finding a competent workforce for tailor-made solution development
	Managing large projects of updating current technology or installing new ones

Table 7

Summary of external and internal barriers to sustainability among TSPs.

Sustainability Barriers for TSPs
External	Market	Lack of motivation and demand from customers and collaborative partners.
Internal	Innovation and economic	Cost of high-skilled staff,
		High pressure for the product price,
		Lack of profitability and financial motivation for a sustainable solution.
	Organizational	Lack of a supporting organization for sustainability due to limited staff and lower priorities.
	Management and workforce behavior	Low priorities for managers due to lack of demand from customers.

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