Co-creation of digitalised aftermarket service model: A case of trucks tyres

Keywords:

Abstract:

Gerpisa research proposal
30th International Colloquium of Gerpisa

Co-creation of digitalised aftermarket service model:
A case of trucks tyres

Purpose
Sharing data throughout the automotive value chain is expected to create various benefits. This paper examines challenges of the data sharing and how they can be addressed, taking up the case of the truck tyre aftermarket. To improve truck operations' efficiency and cope with the driver shortage and regulatory requirements, truck operators are introducing various digital technologies such as fleet management system.

These digital technologies benefit truck operators and drivers and have the potential to help truck parts suppliers and service channels that provide after-sales services to improve their operational efficiency and reduce their workload by utilising vehicle operation data. On the other hand, there are various issues to be considered in providing vehicle operation data to the downstream of the supply chain. For example:

1. Are truck operators willing to share vehicle operation data with parts suppliers?
2. How the infrastructure for sharing vehicle operation data be built?
3. Who bears the cost of building the infrastructure for data sharing?
4. How are vehicle operation data sharing realised when truck operators have several brands to choose from and service channels handle multi auto parts brands as tyres?

In the truck tyre aftermarket, there are many brand choices. In some markets, such as the United States and Europe, the main service channels for tyre replacement and maintenance are multi-brand, with relationships with multiple tyre suppliers, while in other markets, such as Japan, the service channel is affiliated with a specific tyre manufacturer. Currently, tyre suppliers are proposing various new services using digital technology individually. Therefore, we believe that it is crucial to study the approaches of each tyre supplier to truck operators, how these approaches are deployed in the service channel, and the responses of the tyre service channel.

This research will provide valuable insights into the future direction of digitalisation across the entire value chain. The purpose of this paper is to identify challenges and possible solutions for tyre suppliers in cooperation with multi-brand carrying truck operators and service channels that use and handle truck operation data.

Design
Based on publicly available information, tyre suppliers' tyre digitalisation activities are summarised to understand what value they aim to provide for the parties involved in the value chain. This paper then provides an overview of the benefits and drawbacks for truck operators and tyre service channels.

The tyre suppliers' approach will be evaluated and confirmed through interviews with Japanese truck operators and tyre service channels. In addition, similar precedents from other industries will be used as a reference in investigating possible responses by tyre suppliers.

As a theoretical framework, we focus on firm-specific resources and capabilities, including market orientation capabilities and knowledge-absorptive capability, related to the resource-based theory. We refer to capability theory, which addresses how these resources affect the firm's boundaries. We then suggest future directions for tyre suppliers by adopting a game theory approach to competition that emphasises creating a favourable industry structure that is conducive to achieving the company's goals.

Findings
In the automotive aftermarket parts supply chain, where replacement and maintenance are service-based and users have multiple choices of brands, the benefits of the data sharing are significant. However, the challenges of the data-sharing and building data-sharing infrastructure are too much for a single parts supplier. Furthermore, the efforts of a single parts supplier may be limited in building a mechanism for data sharing for individual parts brands due to the multi-brand carrying circumstances of users and service channels. Therefore, co-creation across the value chain and involving competitors will be necessary to break through this situation.

Practical and theoretical implications
We have identified the issue of the data sharing in downstream of the value chain when users and service channels have multiple brand choices. The firm’s capability to generate co-creation across the value chain and cooperation with competitors will be effective in building a favourable industrial structure that is difficult for a single company to build.

In the next step, we would like to verify our hypothesis by testing our research questions in the U.S. truck tyre market, where the multi-branding of automotive parts has become more widespread, and the handling of multi-brand products is more prominent in both truck operators and service channels.
(Text 711 words)

Keywords: Automotive parts, aftermarket, digitalisation, data-sharing, firm-specific resources and capabilities, game theory approach