Pathways to upscaling: aligning capabilities with supply chain design in automotive manufacturing

Abstract

Purpose: Taking innovation to scale and accelerating the development of new technologies puts pressure on manufacturers to perform frequent ramp-ups in increasingly volatile markets. Such pressures inevitably bring the role of supply chain right at the centre of the challenge to design supply chains that are ready to upscale. This research aims to explore how manufacturers can design their supply chain and deploy the required capabilities to respond to the upscaling demands.

Design/methodology/approach: Drawing on the dynamic capabilities (DCs) theory, this study develops a conceptual framework which is validated through multiple case studies. Data was collected and analysed from 14 upscaling projects in automotive manufacturing.

Findings: This study identified specific DCs (e.g. dynamic relational capabilities) that manufacturers deployed in their upscaling projects, explored their micro-foundations, showed how these are coupled with different supply chain designs (SCDs) and how those matches evolve over time. A distinctive finding is the need for automotive manufacturers involved in innovative and technological upscaling projects, to move away from the traditional binary SCD choice (i.e. modular vs integral) to a less rigid SCD which we called “evolving SCD” and proved to be particularly valuable for companies with limited resources and evolving market positions.

Practical implications: This research outlines actionable pathways for upscaling and offers guidance on aligning SCD with capabilities. The findings also illustrate how managers can leverage temporal configurational shifts to strategically address evolving priorities from initial market entry concerns like IP protection and capability access, to later-stage challenges around supplier reliability and volume capacity.

Originality/value: This study introduces the concept of the evolving SCD which is particularly suitable for start-up companies in meeting the upscaling requirements. This research enriches the understanding on how to manage upscaling projects by offering fresh empirical insights into how manufacturers can successfully upscale by streamlining the SCD with capabilities.