Digital supplier integration - Transaction 4.0 in buyer-supplier relationships

Within the context of Industry 4.0, firms increasingly focus on their core competences and use digital technologies for integrating value‐added partners. This process brings about the challenge of choosing a suitable way of integration for each supplier. Although digital supplier integration promises crucial benefits, it is currently not realized in most companies. It lacks a practical guideline that supports firms to integrate suppliers within the best balance between, costs, capabilities, and benefits depending on their supplier strategy. We close this gap by proposing the new concept of Transaction 4.0 capabilities for measuring the degree of implementation of Industry 4.0 regarding the exchange of products and information between a buyer and a supplier. Within a multiple case study, we provide an in‐depth analysis of Transaction 4.0 capabilities and supply chain performance impact in four different buyer‐supplier relationships and provide insights into different Industry 4.0 approaches at the buyer‐supplier interface. The principal‐agent theory offers an explanation why the chosen Transaction 4.0 approaches are typical of the respective buyer‐supplier relationships. As procurement managers might identify comparable sourcing situations within their supplier portfolio, this article provides practical suggestions for digitization measures at the buyer‐supplier interface.