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www.elsevier.com/locate/procedia

The 12th International Conference Interdisciplinarity in Engineering

The 12th International Conference Interdisciplinarity in Engineering

Value
Value Co-Creation
Co-Creation between
between Manufacturing
Manufacturing Companies
Companies and and
Customers.
Manufacturing The Role
Engineering of
Society Information
International Technology
Customers. The Role of Information Technology CompetencyJune
Conference 2017, Competency
MESIC 2017, 28-30
2017, Vigo (Pontevedra), Spain
a, a
Andreea
Andreea Barbu
Barbua, *,
*, Gheorghe
Gheorghe Militaru
Militarua
Costing models for capacity optimization in006042,
Industry 4.0: Trade-off
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University POLITEHNICA
a
of Bucharest, 313, Splaiul Independentei, Bucharest, Romania
University POLITEHNICA of Bucharest, 313, Splaiul Independentei, 006042, Bucharest, Romania
between used capacity and operational efficiency
Abstract
Abstract A. Santanaa, P. Afonsoa,*, A. Zaninb, R. Wernkeb
Through technology, customers have access a
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their activities. Thus, clients have started to want to express their opinions, come up with new ideas, and contribute to the process
of value creation. This paper examines the mediating role of information technology competency on the value co-creation
of value creation. This paper examines the mediating role of information technology competency on the value co-creation
between manufacturing firms and the customer. The objective of this exploratory study is to understand how customers can
between manufacturing firms and the customer. The objective of this exploratory study is to understand how customers can
participate in the process of creating value, based on the fact that customers are playing two roles of value creators and
participate in the process of creating value, based on the fact that customers are playing two roles of value creators and
Abstract simultaneously.
consumers
consumers simultaneously.
Under the concept of "Industry 4.0", production processes will be pushed to be increasingly interconnected,
© 2018
© 2018
2019 The The Authors.
The Authors. Published
Authors. Published
Published byby
by Elsevier Ltd.
Elsevier Ltd.
Ltd.
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information based onarticle
a real timeElsevier
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(https://creativecommons.org/licenses/by-nc-nd/4.0/)
(https://creativecommons.org/licenses/by-nc-nd/4.0/)
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of CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/)
maximization, contributing also Interdisciplinarity
for organization’sin
Selection
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and peer-review
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Selection and peer-review under responsibility of the 12th International Conference Interdisciplinarity in Engineering.
Indeed, lean management and continuous improvement approaches suggest capacity optimization instead of
Keywords: manufacturing
maximization. companies;
The study value co-creation;
of capacity manufacturers;
optimization information
and costing technology
models is an competency;
important sustainable
research manufacturing.
topic that deserves
Keywords: manufacturing companies; value co-creation; manufacturers; information technology competency; sustainable manufacturing.
contributions from both the practical and theoretical perspectives. This paper presents and discusses a mathematical
model for capacity management based on different costing models (ABC and TDABC). A generic model has been
1. Introduction
developed and it was used to analyze idle capacity and to design strategies towards the maximization of organization’s
1. Introduction
value. The trade-off capacity maximization vs operational efficiency is highlighted and it is shown that capacity
Value co-creation
optimization canoperational
might hide be applied to emphasize the efficiency, productivity by eliminating the several types of
Value co-creation can be appliedinefficiency.
to emphasize the efficiency, productivity by eliminating the several types of
wastages. Lean
© 2017 TheLean manufacturing
Authors. providesB.V.
Published by Elsevier continuous impediment as well as eliminating waste. Co-creation can be
wastages. manufacturing provides continuous impediment as well as eliminating waste. Co-creation can be
done through
Peer-review the
under participation of customers in two ways:
of thecustomers can Engineering
contribute by sharing their views with the
done through theresponsibility
participationofofthecustomers
scientific committee
in two ways: Manufacturing
customers Society
can contribute by International
sharing Conference
their views with the
manufacturing
2017. company or they can be directly involved in the main manufacturing processes.
manufacturing company or they can be directly involved in the main manufacturing processes.
Keywords: Cost Models; ABC; TDABC; Capacity Management; Idle Capacity; Operational Efficiency

1. Introduction
* Corresponding author. Tel.: +4-0720-460-785.
* Corresponding
The cost
E-mail author.
of idle
address: Tel.: +4-0720-460-785.
capacity is a fundamental information for companies and their management of extreme importance
andreea.barbu2901@upb.ro
E-mail address: andreea.barbu2901@upb.ro
in modern production systems. In general, it is defined as unused capacity or production potential and can be measured
in several© ways:
2351-9789 2018 Thetons of production,
Authors. available
Published by Elsevier Ltd. hours of manufacturing, etc. The management
of the idle capacity
2351-9789
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the CC BY-NC-ND 253 604 741
license (https://creativecommons.org/licenses/by-nc-nd/4.0/)
Selection
E-mail address: under responsibility
psafonso@dps.uminho.pt of the 12th International Conference Interdisciplinarity in Engineering.
Selection and peer-review under responsibility of the 12th International Conference Interdisciplinarity in Engineering.

2351-9789 © 2017 The Authors. Published by Elsevier B.V.

Peer-review
2351-9789 © under
2019responsibility
The Authors. of the scientificbycommittee
Published Elsevier of the Manufacturing Engineering Society International Conference 2017.
Ltd.
This is an open access article under the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0/)
Selection and peer-review under responsibility of the 12th International Conference Interdisciplinarity in Engineering.
10.1016/j.promfg.2019.02.323
1070 Andreea Barbu et al. / Procedia Manufacturing 32 (2019) 1069–1076
2 Andreea Barbu and Gheorghe Militaru / Procedia Manufacturing 00 (2018) 000–000

Technology does not have intrinsic value but obtaining a competitive advantage from it requires dynamic
capability and the ability to apply appropriate resources such as information technology.
The purpose of this paper is to study the relationship between the sustainable development of manufacturing
companies, IT competency and customer co-creation value. The authors want to test the mediating role of
information technology competency on the co-creation value between manufacturing firms and customers. This
study offers a new perspective on value co-creation and sustainable development in manufacturing companies.

2. Theoretical background

2.1. Customer co-creation

Decades ago, companies and customers had separated roles of production and consumption. Nowadays,
customers are playing two roles of value creators and consumers simultaneously. Therefore, we can talk about co-
creation. This co-creation is about the joint creation of value by the company and the customer, allowing the
customer to co-construct the service experience to suit its context [1]. According to Stauss et al [2], co-creation is
represented by the process that allows individual customers to influence the design of future services or products,
developing experiential marketing.
The concept of co-creation of value reflects the fact that value is not created exclusively by companies but from
their interaction with different actors including the customer [3]. Co-creation is also associated with the Service-
Dominant Logic, this appearing when customers use the products or the services of a company in order to meet their
needs [4].
When it comes to customers’ motives of engaging in co-creation processes, unfortunately, it can be said that a
common reason why customers interact with a company consists in their dissatisfaction with the companies’
products or services. Besides customers complaints, other motives could be curiosity about participating, sharing
their own idea, receiving monetary rewards, learning and also intrinsic interest in co-creation [5].
Customers use new forms of communication, service and learning mechanisms in order to make value. This
value is co-created with companies and customers when customers are able to personalize their experience using the
companies’ products or services, an experience that contributes to improving companies’ value by raising revenues,
productivity, developing new products/services or achieving a superior brand loyalty [6]. Most of the time, when
they want their needs and desires to be implemented by a company, customers use different Internet websites, e-
mail, and social networks to submit their ideas about branded products, brand promotion, products’ packaging or
corporate social responsibility [7].
Until now, there have been conducted a lot of studies about co-creation, most of them analysing the relationship
between consumer co-creation and new product development [8] [7] [1], but also lean co-creation [6] for enhancing
productivity. In his paper, Hoyer et al. [8] presented the major stimulators and impediments to the co-creation
process, the impact of co-creation at each stage of the new product development process, and the various firm-
related and consumer-related outcomes. The results of Filieri’s paper [7] show that involving customers in the first
part of developing a new product may lead to effectively and rapidly matching emerging and latent
customers’needs. The customers’ ideas may be original, new and feasible, being highly valuable for companies’
innovation activities.

2.2. Information technology competency

Any company needs internal and external information about their financial situation, production costs, the
effectiveness of their products, competitors, customers, suppliers, and so on, in order to know their customers, their
needs, to satisfy them and gain sustainable competitive advantages [9]. According to Tippins and Sohi (2003), the
way companies use technology to manage their information effectively can be represented by a single construct-
Information technology (IT) competency [10]. The term IT competency refers to the way that technology is used to
satisfy the companies’ information needs [11]. IT competency can be analysed by 3 dimensions in order to
understand and use information about markets and customers: IT Knowledge, IT operations and IT infrastructure
[10]. IT knowledge refers to the degree to which a company understands the capabilities of existing and emerging
 Andreea Barbu et al. / Procedia Manufacturing 32 (2019) 1069–1076 1071
Andreea Barbu and Gheorghe Militaru / Procedia Manufacturing 00 (2018) 000–000 3

IT, IT operations refers to the IT-related methods, processes and techniques that may be needed if these technologies
are to create value, while IT infrastructure refers to resources and tools that contribute to the acquisition, processing,
storage, dissemination and use of information [12].
During the last twenty years, the implementation of information technology was analysed in many research
papers, studying the way it can increase productivity [13] [14], company performance [11] [12], knowledge
management processes [15] or innovation [16].

2.3. Sustainable development of manufacturing companies

Sustainability is one of the problems that companies have begun to face in recent times, also being an important
concept to survive in a competitive environment [17]. Manufacturing companies have also begun to take into
account sustainability in their strategies and activities, starting to establish measures in order to improve their
sustainable manufacturing performance. Sustainability can now be found in manufacturing management domains
such as lean manufacturing [18], product development [19] or supply chain management [20].
Jovane et al. [21] argue that sustainable manufacturing should respond to environmental, economic, and social
challenges, where environmental performance is considered to be the most important indicator in evaluating
sustainable manufacturing performance [22].

3. Conceptual framework

In Figure 1 it is presented the conceptual framework for this paper, which shows the relationship between the
sustainable development of manufacturing companies, the value created by customer co-creation process and
information technology competency. The independent variable is represented by sustainable development, the
dependent variable is represented by customer co-creation, the intervening variable that links the independent and
dependent variables being information technology competency. The control variables are: the age of the company,
the size of the company (measured through the number of employees), and the domain of activity.

Fig. 1: Conceptual Framework

4. Research design and methodology

The study develops hypotheses and tests them using survey data. This quantitative approach uses the perception
of respondents. Using cross-section data from a sample in Romania, we empirically investigated the mediating
effects of information technology competency on the relationship between the sustainable development of
manufacturing companies and customer contribution to value co-creation. The authors developed a questionnaire
containing 28 items, measuring the perceptions of the respondents. The data were collected in June, the
questionnaire being addressed to students from the master programs of the University POLITEHNICA of Bucharest,
people working in manufacturing companies in Romania.
4 Andreea Barbu and Gheorghe Militaru / Procedia Manufacturing 00 (2018) 000–000
1072 Andreea Barbu et al. / Procedia Manufacturing 32 (2019) 1069–1076

Hypothesis 1 (H1): Sustainable development of manufacturing companies will positively affect the level of value
created by the customer co-creation process.

By using special practices in order to reduce emissions and wastes, improve resources utilization, quality, costs,
delivery process and flexibility, and also the relationship with employees and customers, companies should increase
the customer co-creation value, customers who can contribute to these practices, either directly or indirectly. Thus,
the authors considered that by increasing the sustainable development of manufacturing companies, the customer
co-creation value will be increased too.

Hypothesis 2 (H2): A high level of information technology competency will positively affect the level of sustainable
development of manufacturing companies.

The authors wanted to test if improving the level of IT knowledge, operations and infrastructure will increase the
level of sustainable development, marked by using various methods and practices to reduce emissions and wastes,
improve resources utilization, quality, costs, delivery process and flexibility, and also the relationship with
employees and customers.

Hypothesis 3 (H3): A high level of Information Technology Competency determines an increase in customer co-
creation value.

Increasing the level of IT knowledge, operations and infrastructure of a manufacturing company, customers will be
able to contribute more easily to the process of value co-creation by using social media platforms, the company's
website or any other links that can facilitate the relationship between customers and company via Internet and
computer systems. According to Kratzer et al. (2004), social media may reduce the cost of communication among
members and enable a higher number of members to add to a specific co‐creation activity [23].
In order to test these hypotheses, the main constructs were identified and represented as it can be seen in Table 1
and Table 2.

Table 1. Variables used to determine the main constructs

Constructs Items Variables and Codes

IT knowledge (ITK) ITK1 ITK2 ITK3

IT competency
IT operations (ITO) ITO1 ITO2 ITO3 ITO4
(ITC)
IT infrastructure (ITI) ITI1 ITI2 ITI3 ITI4
Environmental performance (SEN) SEN1 SEN2 SEN3
Sustainability
development Economic performance (SEC) SEC1 SEC2 SEC3 SEC4
(S) Social performance (SSP) SSP1 SSP2
New ideas CC1
Value co-creation Promotion CC2
(CC) Suggestions CC3
Social responsibility CC4

The authors used a part of the way that Susana Pérez-López and Joaquin Alegre [12] measured the information
technology competency (ITC), by analysing IT knowledge (ITK), IT operations (ITO) and IT infrastructure (ITI),
each of these variables being also measured by 3 or 4 items (as it can be observed in Table 2).
For analysing the sustainability development (S), the authors utilized a part of the key performance indicators
that were used by E. Amrina and S. M. Yusof in order to analyse the Sustainable Manufacturing Evaluation in
Automotive Companies. Thus, sustainability development was measured by studying different aspects of
environmental performance (SEN), economic performance (SEC) and social performance (SSP) [22].
 Andreea Barbu et al. / Procedia Manufacturing 32 (2019) 1069–1076 1073
Andreea Barbu and Gheorghe Militaru / Procedia Manufacturing 00 (2018) 000–000 5

Table 2. Measuring Variables

Environmental performance (SEN)
SEN1 The company uses various pollution reduction practices.
SEN2 The company uses various practices to reduce energy, water, fuel, or other material resources.
SEN3 The company uses various waste reduction practices.
Economic performance (SEC)
SEC1 The company places great emphasis on the quality of products, processes, and services.
Sustainable
development SEC2 The company uses various practices to reduce costs.
S SEC3 For the company, it is important that the products and services are delivered on time.
SEC4 The company is flexible in terms of the volume of manufactured products, the processes undertaken or the
technology used.
Social performance (SPP)
SPP1 The company is concerned about the well-being, development and employees' satisfaction.
SPP2 The company is concerned with developing supplier relationships.
IT knowledge (ITK)
ITK1 Overall, our technical support staff is knowledgeable when it comes to computer-based systems.
ITK2 Our firm possesses a high degree of computer-based technical expertise.
ITK3 We are very knowledgeable about new computer-based innovations.
IT operations (ITO)
ITO1 We routinely utilize computer-based systems to access information from outside databases.
Information ITO2 We use computer-based systems to analyse customer and market information.
Technology We utilize decision-support systems frequently when managing customer information.
ITO3
Competency
ITC ITO4 We have set procedures for collecting customer information from online sources.

IT infrastructure (ITI)
ITI1 Our company has a formal MIS department.
ITI2 Our firm employs a manager whose main duties include the management of our information technology.
ITI3 Our firm’s members are linked by a computer network.
ITI4 Our firm creates customized software applications when the need arises.

CC1 Customers use social platforms to offer ideas for new products, ingredients or recipes.
CC2 Customers use social platforms to provide reviews and to express their feelings about the experience with the
Customer Co- company.
creation CC3 Customers use social platforms to provide ideas about design, shape, size, or materials used to improve various
CC products.
CC4 Customers use social platforms to be aware of or engage in corporate social and environmental responsibility
actions.

For customer co-creation construct (CC), the authors adapted information from the way Raffaele Filieri [7]
described how customers can contribute to co-creation process, through submitted ideas into different categories:
branded products, brand promotion, products’ packaging, corporate social, and environmental responsibility. In this
case, for measuring customer co-creation construct, 4 items were utilized: using social platforms to offer ideas for
new products, ingredients or recipes (CC1); provide reviews and express their feelings about the experience with the
company (CC2); provide ideas about design, shape, size, or materials used to improve various products (CC3); be
aware of or engage in corporate social and environmental responsibility actions (CC4).
Individual measures were averaged to obtain a simple value for each variable. The control variables were: CV1-
age of the company; CV2- size of the company (measured through the number of employees); CV3- domain of
activity. Except for the control variables, all the variables were measured on a 5-point Likert-type scale ranging
from 1 (strongly disagree) to 5 (strongly agree).
1074 Andreea Barbu et al. / Procedia Manufacturing 32 (2019) 1069–1076
6 Andreea Barbu and Gheorghe Militaru / Procedia Manufacturing 00 (2018) 000–000

5. Results

For this study, data were analysed using SPSS 20.0 software and interpreted using the Evans’ guide [24] for the
absolute value of R-values. The number of respondents for this analysis was 35, which is why this study should be
treated as an exploratory one, where 91.4% of the respondents said that the manufacturing companies where they
work use information technology more than often.
In Table 3 it can be observed that there are strong positive relationships between IT knowledge and IT operations
(R=0.778, p<0.01), IT knowledge and IT infrastructure (R=0.747, p<0.01), IT operations and IT infrastructure
(R=0.856, p<0.01). Also, IT knowledge, IT operations and IT infrastructure strongly influence the IT competency
(R=0.891, R=0.951; R=0.942, p<0.01).
Table 3: Correlation matrix among variables

Construct SEN SEC SSP S ITK ITO ITI ITC CC

SEN -
SEC 0,370* -
SSP 0,162 0,391* -
S 0,796** 0,706** 0,667** -
ITK 0,068 0,399* 0,447** 0,364* -
ITO 0,214 0,249 0,342* 0,360* 0,778** -
ITI 0,071 0,173 0,357* 0,257 0,747** 0,856** -
ITC 0,130 0,284 0,405* 0,348* 0,891** 0,951** 0,942** -
CC 0,506** 0,367* 0,322 0,565** 0,297 0,462** 0,390* 0,419* -
Note. N=35; *p <0.05, **p<0.01

Environmental performance (SEN), economic performance (SEC) and social performance (SSP) are in a strong
positive relationship with sustainability development (S) (R=0.796, R=0.706; R=0.667, p<0.01).
The variables CC1, CC2, CC3 and CC4 influence the level of the value obtained through co-creation process
only in a moderate way, the Pearson coefficients being between 0.390 and 0.462 with at least 95% level of
confidence.

6. Study limitations and conclusions

Considering Evans’ paper [24], the absolute value of R-values can determine “a very weak correlation” for
values between 0.00 and 0.19, “a weak correlation” for values between 0.20 and 0.39, “a moderate correlation” for
0.40 - 0.59; “a strong correlation” for 0.60 - 0.79 and “a very strong correlation” for values between 0.80 and 1.00.
This study presents a framework to improve the co-creation process in manufacturing firms. The results provide
support for H1 and also for H3, meaning that sustainable development of manufacturing companies will positively
affect the level of value created by customer co-creation process (Hypothesis H1: R= 0.565, p<0.01) and a high
level of Information Technology Competency will determine an increase in customer co-creation value. (Hypothesis
H3: R=0.419, p<0.05).
The results partially provide support for Hypothesis H2, where a high level of sustainable development of
manufacturing companies will positively affect the level of information technology competency (R=0.348, p<0.05).
It is argued that the ability to create value and improve the manufacturing process enables a company to generate
a competitive advantage. The information technology competency partially mediates the effect of co-creation value
and performance of manufacturing company.
The results of this study present that sustainable development realised through environmental performance
(SEN) determines a higher growth in customer co-creation value than using practices to contribute to economic
performance (R=0.506, p<0.01 vs. R=0.367, p<0.05). Also, this increase in customer co-creation value is more
influenced by IT knowledge and IT infrastructure than IT operations (R=0.462, p<0.01 vs. and R=419, p<0.05 vs.
R=0.390, p<0.05). Finally, the authors observed that sustainable development realised through social performance
 Andreea Barbu et al. / Procedia Manufacturing 32 (2019) 1069–1076 1075
Andreea Barbu and Gheorghe Militaru / Procedia Manufacturing 00 (2018) 000–000 7

determines a high level of IT competency (R=0.405, p<0.05).

The results pointed out that sustainable development in manufacturing companies will positively affect the co-
creation value. Our findings indicate that IT competency played a partially mediating role acting as a significant
intermediate variable between sustainable development and customer co-creation value. The IT competency can also
positively affect the sustainable development, while a high level of IT competency will positively affect the
customer co-creation value.
This study is an exploratory one, with only 35 manufacturing companies that completed our survey.
Unfortunately, the results of this study could be influenced by some limitations.
Firstly, in order to choose the companies analysed in our exploratory study, the authors used as respondents a
part of the students who graduated in 2018 from the University POLITEHNICA of Bucharest and who work for the
manufacturing companies. The majority of the respondents works in companies with more than 250 employees
(65.7%), these companies having more than 10 years since their founding (62.9%).
Secondly, only the perceptions of the employees from manufacturing companies were surveyed in this study,
88.6% having executive positions in the firm. Therefore, it would be helpful if future researchers examine
perspectives only of employees with a management position in the manufacturing company.
Thirdly, the results of this study were based only on a few companies in the manufacturing sector: furniture
manufacturers, jewellery companies and chemical companies (8.6% each), clothing manufacturers, window
manufacturers and tobacco companies (5.7% each), building materials companies (11.4%), electrical and electronic
equipment manufacturers (31.4%), and vehicle manufacturing companies (14.3%).
In the future, the authors will conduct more studies about the relationship between information technology
competency, sustainable development of manufacturing companies and customer contribution to value co-creation
by analysing a larger group of manufacturing companies from Romania and other types of relationships between
identified items that represent the main constructs from this study in order to see if our exploratory study is a
representative one.

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