Transformation of supplier digital absorptive capacity management: an engaged research perspective

Purpose The purpose of this study is to explore how supplier digital absorptive capacity can be assessed as a component of a supplier evaluation system and to identify the accompanying supplier development (SD) mechanisms that support suppliers in learning and adopting this important capability. Design/methodology/approach The authors used engaged scholarship methods to observe and measure change as Rolls-Royce deployed Model-Based Definition/Enterprise (MBD/E) digital technology across its global supply chain. Data was collected from two tiers of the supply chain through interviews, workshops and documentation. Findings This analysis supports the relationship between SD activities as a means for improving the transfer of digital knowledge between buyers and suppliers. An important insight from our research is that suppliers’ ability to absorb digital knowledge from buyers relies on measures of digital progress and regular reviews. These activities are underpinned by establishing a digital minimum standard for assessing the rate of supplier improvement. Research limitations/implications This longitudinal study took place over three years of on-site observations of SD activities. Because the analysis was context specific, the findings of this study may not apply to all organisations undergoing digital transformation. However, the AC framework provides a foundation for future research in different industries, which may enhance its generalisability. Originality/value This novel study provides an assessment of how supplier digital absorptive capacity can be empirically captured as a component of a supplier evaluation system. The findings contribute to broader theories on absorptive capacity (AC) and provide practical implications for supplier managers adopting new digital technologies.